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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on July 22, 2014

Registration No. 333-196808


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 2
To

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



NRG Yield, Inc.
(Exact name of registrant as specified in its charter)



Delaware
(State or other jurisdiction of
incorporation or organization)
  4911
(Primary Standard Industrial
Classification Code Number)
  46-1777204
(I.R.S. Employer
Identification No.)

211 Carnegie Center
Princeton, New Jersey 08540
(609) 524-4500

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)



David R. Hill
Executive Vice President and General Counsel
211 Carnegie Center
Princeton, New Jersey 08540
(609) 524-4500
(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies of all communications, including communications sent to agent for service, should be sent to:

Gerald T. Nowak, P.C.
Paul D. Zier
Kirkland & Ellis LLP
300 North LaSalle
Chicago, Illinois 60654
(312) 862-2000

 

Kirk A. Davenport II
Brandon J. Bortner
Latham & Watkins LLP
885 Third Avenue
New York, New York 10022
(212) 906-1200



Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

                   If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:    o

                   If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

                   If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

                   If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

                   Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý   Smaller reporting company o

 

 

 

 

(Do not check if a smaller reporting company)

 

 

CALCULATION OF REGISTRATION FEE

               
 
Title of Each Class of
Securities to be Registered

  Amount
to be
Registered(1)

  Estimated Maximum
Offering Price
per share(2)

  Estimated Maximum
Aggregate Offering
Price(2)(3)

  Amount of
Registration
Fee(3)(4)

 

Class A Common Stock, $0.01 par value per share

  12,075,000   $51.15   $617,636,250   $79,551.55

 

(1)
Includes 1,575,000 shares of Class A Common Stock that may be sold if the option to purchase additional shares granted by us to the underwriters is exercised in full.

(2)
Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(a) of the Securities Act of 1933, as amended, on the basis of the price of the registrant's Class A common stock on July 21, 2014, as reported by the New York Stock Exchange.

(3)
Includes the offering price of any additional shares of Class A Common Stock that the underwriters have the option to purchase.

(4)
$72,772 was previously paid in connection with the initial filing of this Registration Statement.

                   The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus dated July 22, 2014

PROSPECTUS

10,500,000 Shares

LOGO

NRG Yield, Inc.

Class A Common Stock



              We are offering 10,500,000 shares of our Class A common stock in this offering.

              Our Class A common stock is traded on the New York Stock Exchange under the symbol "NYLD." On July 21, 2014, the last reported sale price of our common stock was $51.15 per share.

              We are an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act of 1933, as amended, and, as such, we are allowed to provide in this prospectus more limited disclosures than an issuer that would not so qualify. In addition, for so long as we remain an emerging growth company, we will qualify for certain limited exceptions from investor protection laws such as the Sarbanes-Oxley Act of 2002 and the Investor Protection and Securities Reform Act of 2010. Please read "Risk Factors—Risks Inherent in an Investment in Us—We are an "emerging growth company" and may elect to comply with reduced public company reporting requirements, which could make our Class A common stock less attractive to investors" and "Summary—JOBS Act."

              Investing in our Class A common stock involves risks that are described in the "Risk Factors" section beginning on page 21 of this prospectus.



 
 
Per Share
 
Total

Public offering price

  $   $

Underwriting discount(1)

  $   $

Proceeds, before expenses, to us(1)

  $   $
(1)
We refer you to "Underwriting" beginning on page 82 of this prospectus for additional information regarding underwriter compensation and expenses of the offering.

              The underwriters may also exercise their option to purchase up to an additional 1,575,000 shares of our Class A common stock from us at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus.

              Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

              The shares will be ready for delivery on or about                                    , 2014.



BofA Merrill Lynch   Citigroup   Morgan Stanley

Barclays   Goldman, Sachs & Co.



Credit Suisse

  Deutsche Bank Securities   KeyBanc Capital Markets

MUFG   RBC Capital Markets



   

The date of this prospectus is                                    , 2014.


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TABLE OF CONTENTS

              You should rely only on the information contained in this prospectus, any free writing prospectus prepared by us or on our behalf or any other information to which we have referred you in connection with this offering. We have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

Forward-Looking Statements

  v

Summary

 
1

The Offering

 
14

Summary Historical and Pro Forma Financial Data

 
17

Risk Factors

 
21

Use of Proceeds

 
46

Capitalization

 
47

Price Range Of Our Class A Common Stock

 
48

Cash Dividend Policy

 
49

Unaudited Pro Forma Condensed Consolidated Combined Financial Statements

 
52

Security Ownership of Certain Beneficial Owners and Management

 
59

Certain Relationships and Related Party Transactions

 
64

Description of Capital Stock

 
65

Shares Eligible for Future Sale

 
73

Description of Certain Indebtedness

 
75

Material U.S. Federal Income Tax Consequences to Non-U.S. Holders

 
79

Underwriting

 
83

Legal Matters

 
89

Experts

 
89

Incorporation by Reference of Certain Documents

 
90

Where You Can Find More Information

 
90

Index to Financial Statements

 
F-1

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Notice to Investors

              Several of our subsidiaries are "public utilities" (as defined in the Federal Power Act ("FPA")) subject to the jurisdiction of the U.S. Federal Energy Regulatory Commission ("FERC") because they own or operate FERC-jurisdictional facilities, including certain generation interconnection facilities and various "paper" facilities, such as wholesale power sales contracts and market-based rate tariffs. The FPA requires us either to obtain prior authorization from FERC prior to the transfer of an amount of our Class A common stock sufficient to convey direct or indirect "control" over any of our public utility subsidiaries or to qualify for a blanket authorization granted under FERC's regulations for certain types of transfers generally deemed by FERC not to convey direct or indirect "control." We intend to conduct this offering in a manner consistent with FERC's guidance on "control" and the requirements for blanket authorizations granted under FERC's regulations. Additionally, our amended and restated certificate of incorporation prohibits any person and any of its associate or affiliate companies in the aggregate, "public utility" (as defined in the FPA), or "holding company" (as defined in the Public Utility Holding Company Act of 2005 ("PUHCA")) from acquiring, through this offering or in subsequent purchases other than secondary market transactions (as discussed under "Business—Regulatory Matters—FERC" and the "Regulatory Matters" section of our Annual Report on Form 10-K for the year ended December 31, 2013 (our "2013 Annual Report")), an amount of our Class A common stock sufficient to convey direct or indirect "control" over any of our public utility subsidiaries without the prior written consent of our board of directors. For the purposes of this offering, "control" is defined to be a direct and/or indirect voting interest of 10% or more in any of the public utility subsidiaries of our direct subsidiary, NRG Yield LLC ("Yield LLC"). Because Yield LLC indirectly owns as much as 100% of the voting interests in certain of these public utility subsidiaries, "control" of such public utility subsidiaries would be deemed to be present if the sum of (i) the percentage ownership of an individual investor and any of its associate or affiliate companies in the aggregate of NRG's voting securities multiplied by the percentage of our outstanding voting securities held, directly or indirectly, by NRG, plus (ii) such investor's percentage ownership of our Class A common stock multiplied by the percentage of our outstanding voting securities not held, directly or indirectly, by NRG, exceeded 10%. "Control" could also be present, and pursuant to our amended and restated certificate of incorporation, prior written consent of our board of directors would be required, if the aggregate direct and/or indirect voting interest in us held by an individual investor and any of its associate or affiliate companies together with a separate investment in another public utility subsidiary of ours not wholly-owned by Yield LLC exceeded the 10% threshold. This prospectus does not constitute an offer to sell any share of our Class A common stock to any person in violation of these or any other provisions of our amended and restated certificate of incorporation.

Industry and Market Data

              This prospectus includes industry data and forecasts that we obtained from industry publications and surveys, public filings and internal company sources. Industry publications and surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. Statements as to our market position and market estimates are based on independent industry publications, government publications, third-party forecasts, management's estimates and assumptions about our markets and our internal research. While we are not aware of any misstatements regarding the market, industry or similar data presented herein, such data involve risks and uncertainties and are subject to change based on various factors, including those discussed under the headings "Forward-Looking Statements" and "Risk Factors" in this prospectus.

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Trademarks and Trade Names

              We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. This prospectus may also contain trademarks, service marks and trade names of NRG and third parties, which are the property of their respective owners. Our use or display of third parties' trademarks, service marks, trade names or products in this prospectus is not intended to, and should not be read to, imply a relationship with or endorsement or sponsorship of us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the ®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, service marks and trade names. See "Certain Relationships and Related Party Transactions—Licensing Agreement" for a description of the licensing agreement pursuant to which we have been granted a license for the right to use the NRG name and logo in the United States and Canada, subject to certain exceptions and limitations.

Certain Terms Used in this Prospectus

              Unless the context otherwise indicates, references within this prospectus to:

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FORWARD-LOOKING STATEMENTS

              This prospectus, including the information incorporated into this prospectus by reference, contains "forward-looking statements," which involve risks and uncertainties. All statements, other than statements of historical facts, that are included in or incorporated by reference into this prospectus, or made in presentations, in response to questions or otherwise, that address activities, events or developments that we expect or anticipate to occur in the future, including such matters as projections, capital allocation, future capital expenditures, business strategy, competitive strengths, goals, future acquisitions or dispositions, development or operation of power generation assets, market and industry developments and the growth of our business and operations (often, but not always, through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "projection," "target," "goal," "objective" and "outlook"), are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. We believe these factors include but are not limited to those described under "Risk Factors" in this prospectus and "Risk Factors" of our 2013 Annual Report, which is incorporated herein by reference. These factors, risks and uncertainties include, but are not limited to, the following:

              Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a

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result of new information, future events or otherwise. The foregoing review of factors that could cause the Company's actual results to differ materially from those contemplated in any forward looking statements included in this prospectus should not be construed as exhaustive. Although we may elect to update these forward-looking statements at some point in the future, we and our management specifically disclaim any obligation to do so, even if new information becomes available in the future or as a result of future events, changes in assumptions or otherwise. We qualify all of our forward-looking statements by these cautionary statements.

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SUMMARY

              The following summary contains basic information about us and this offering, but does not contain all the information that may be important to you. This summary is not complete and does not contain all information you should consider before investing in our Class A common stock. For a more complete understanding of this offering, we encourage you to read carefully this entire prospectus and the documents incorporated by reference in this prospectus, including the financial statements and related notes thereto, and the information set forth under the headings "Risk Factors" in this prospectus, and "Risk Factors" in our 2013 Annual Report, which is incorporated herein by reference, before deciding to invest in our Class A common stock. In addition, certain statements in this prospectus and the documents incorporated herein by reference are forward-looking statements which involve risks and uncertainties. See "Forward-Looking Statements." Unless otherwise specifically indicated, all information in this prospectus assumes the underwriters' option to purchase additional shares of our Class A common stock is not exercised. Unless the context provides otherwise, references herein to "we," "our," "the Company" and "Yield" refer to Yield Inc., together with its consolidated subsidiaries, including Yield LLC and Yield Operating LLC.

About NRG Yield, Inc.

              We are a dividend growth-oriented company formed to serve as the primary vehicle through which NRG Energy, Inc. (NYSE: NRG) owns, operates and acquires contracted renewable and conventional generation and thermal infrastructure assets. We believe we are well positioned to be a premier company for investors seeking stable and growing dividend income from a diversified portfolio of lower-risk high-quality assets. We intend to take advantage of favorable trends in the power generation industry including the growing construction of contracted generation that can replace aging or uneconomic facilities in competitive markets and the demand by utilities for renewable generation to meet their state's RPS. To that end, we believe that our cash flow profile, coupled with our scale, diversity and low cost business model, offers us a lower cost of capital than that of a traditional independent power producer and provide us with a significant competitive advantage to execute our growth strategy.

              With this business model, our objective is to pay a consistent and growing cash dividend to holders of our Class A common stock that is sustainable on a long-term basis. We intend to cause Yield LLC to make regular quarterly cash distributions to its members in an amount equal to the cash available for distribution generated during a given quarter, less reserves for the prudent conduct of our business, and to use the amount distributed to Yield Inc. to pay regular quarterly dividends to holders of our Class A common stock. We focus on high-quality, newly constructed and long-life facilities with credit-worthy counterparties that we expect will produce stable long-term cash flows. We believe that, given our expected ability to acquire assets with characteristics similar to those in our current portfolio, including the ROFO Assets, we will have the opportunity to grow our cash available for distribution in a manner that would allow us to further increase our cash dividends over time.

              Pursuant to our dividend policy, we intend to pay a cash dividend each quarter to holders of our Class A common stock. Our dividend policy reflects a basic judgment that holders of our Class A common stock will be better served by distributing all of the cash distributions received from Yield LLC each quarter in the form of a quarterly dividend rather than retaining it. On May 5, 2014, we declared a quarterly dividend of $0.35 per share ($1.40 per share annualized) on our outstanding Class A common stock payable on June 16, 2014 to holders of record on June 2, 2014. See "Cash Dividend Policy" for a description of our dividend history.

 

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Current Operations

              We own a diversified portfolio of contracted renewable and conventional generation and thermal infrastructure assets in the United States. Our contracted generation portfolio includes four natural gas or dual-fired facilities, 10 utility-scale solar and wind generation facilities and two portfolios of distributed solar facilities that collectively represent 1,914 net MW. Each of these assets sells substantially all of its output pursuant to long-term, fixed price offtake agreements with credit-worthy counterparties. The average remaining contract duration of these offtake agreements was approximately 17 years as of June 30, 2014 based on cash available for distribution. We also own thermal infrastructure assets with an aggregate steam and chilled water capacity of 1,346 net MWt and electric generation capacity of 123 net MW. These thermal infrastructure assets provide steam, hot water and/or chilled water, and in some instances electricity, to commercial businesses, universities, hospitals and governmental units in multiple locations, principally through long-term contracts or pursuant to rates regulated by state utility commissions.

              The following table provides an overview of our assets:

 
   
   
  Capacity   Offtake agreements  
Assets(1)
  Location   COD   Rated
MW(2)
  Net
MW(3)
  Contracted
Volume(4)
  Counterparty   Counterparty
Credit Rating(5)
  Expiration  

Conventional

                                           

GenConn Devon

  Connecticut     June 2010     190     95     100 % Connecticut Light & Power   A-/Baa2/BBB+     2040  

GenConn Middletown

  Connecticut     June 2011     190     95     100 % Connecticut Light & Power   A-/Baa2/BBB+     2041  

Marsh Landing

  California     May 2013     720     720     100 % Pacific Gas & Electric   BBB/A3/BBB+     2023  

El Segundo

  California     August 2013     550     550     100 % Southern California Edison   BBB+/A3/A-     2023  
                                         

              1,650     1,460                      
                                         

Utility Scale Solar

                                           

Blythe

  California     December 2009     21     21     100 % Southern California Edison   BBB+/A3/A-     2029  

Roadrunner

  New Mexico     August 2011     20     20     100 % El Paso Electric   BBB/Baa2/NR     2031  

Avenal

  California     August 2011     45     23     100 % Pacific Gas & Electric   BBB/A3/BBB+     2031  

Avra Valley

  Arizona     December 2012     25     25     100 % Tucson Electric Power   BBB/Baa1/BBB-     2032  

Alpine

  California     January 2013     66     66     100 % Pacific Gas & Electric   BBB/A3/BBB+     2033  

Borrego

  California     February 2013     26     26     100 % San Diego Gas and Electric   A/A2/A-     2038  

CVSR

  California     October 2013     250     122     100 % Pacific Gas & Electric   BBB/A3/BBB+     2038  

TA-High Desert

  California     March 2013     20     20     100 % Southern California Edison   BBB+/A3/A-     2033  

Kansas South

  California     June 2013     20     20     100 % Pacific Gas & Electric   BBB/A3/BBB+     2033  
                                         

              493     343                      
                                         

Distributed Solar

                                           

AZ DG Solar Projects

  Arizona     December 2010 -
January 2013
    5     5     100 % Various public entities     2025 - 2033  

PFMG DG Solar Projects

  California     October 2012 -
December 2012
    9     5     100 % Various public entities     2032  
                                         

              14     10                      
                                         

Wind

                                           

South Trent Wind Farm

  Texas     January 2009     101     101     100 % AEP Energy Partners   BBB/NR/BBB(6)     2029  
                                         

              101     101                      
                                         

Total Conventional, Solar and Wind

    2,258     1,914                      

Thermal Generation

 

 

   
 
   
 
   
 
   
 
 

 

 

 

   
 
 

Paxton Creek Cogen

  Pennsylvania     2000 (7)   12     12         Power sold into PJM markets        

Tucson Convention Center

  Arizona     2003     2     2         Excess power sold into local grid        

Princeton Hospital

  New Jersey     2012     5     5         Excess power sold into local grid        

Dover

  Delaware     2013     104     104         Power sold into PJM markets        
                                         

Total Thermal Generation

    123     123                      
                                         

Total NRG Yield, Inc. 

    2,381     2,037                      
                                         
                                         

 

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(1)
For more information about, and a description of, each of our assets, see "—Organizational Structure" and "Business—Our Operations."

(2)
For conventional, solar, wind and thermal generation, rated capacity represents the maximum generating capacity of a facility. Generating capacity may vary based on a variety of factors discussed elsewhere in this prospectus. For thermal energy, rated capacity represents MWt for steam or chilled water.

(3)
Net capacity represents the maximum, or rated, generating capacity of the facility multiplied by our percentage ownership interest in the facility as of the date of this prospectus.

(4)
Represents the percentage of a facility's total estimated average annual capacity contracted under offtake agreement or other agreements.

(5)
Reflects the counterparty's issuer credit ratings issued by Standard & Poor's Ratings Services ("S&P")/Moody's Investors Service Inc. ("Moody's")/Fitch Ratings Ltd. ("Fitch") as of the date of this prospectus.

(6)
Reflects the issuer credit ratings for American Electric Power Company, Inc., as guarantor of the related PPA.

(7)
Represents year NRG or NYLD acquired 100% ownership of these assets.

              The following table summarizes our thermal steam and chilled water facilities:

Name and Location of Facility
  %
Owned
  Thermal Energy Purchaser   Megawatt
Thermal
Equivalent
Capacity
(MWt)
  Generating Capacity

NRG Energy Center Minneapolis, MN

    100.0   Approx. 100 steam and 50 chilled water customers     334
141
  Steam: 1,140 MMBtu/hr.
Chilled water: 40,200 tons

NRG Energy Center San Francisco, CA

   
100.0
 

Approx. 175 steam customers

   
133
 

Steam: 454 MMBtu/hr.

NRG Energy Center Omaha, NE

   
100.0
12.0
100.0
 

Approx. 60 steam and 60 chilled water customers

   
142
9
77
 

Steam: 485 MMBtu/hr
Steam: 30 MMBtu/hr
Chilled water: 22,000 tons

NRG Energy Center Harrisburg, PA

   
100.0
 

Approx. 140 steam and 3 chilled water customers

   
129
12
 

Steam: 440 MMBtu/hr.
Chilled water: 3,600 tons

NRG Energy Center Phoenix, AZ

   
100.0
0.0


(a)

Approx. 35 chilled water customers

   
106
28
 

Chilled water: 30,100 tons
Chilled water: 8,000 tons

NRG Energy Center Pittsburgh, PA

   
100.0
 

Approx. 25 steam and 25 chilled water customers

   
87
46
 

Steam: 296 MMBtu/hr.
Chilled water: 12,920 tons

NRG Energy Center San Diego, CA

   
100.0
 

Approx. 20 chilled water customers

   
26
 

Chilled water: 7,425 tons

NRG Energy Center Dover, DE

   
100.0
 

Kraft Foods Inc. and Procter & Gamble Company

   
66
 

Steam: 225 MMBtu/hr.

NRG Energy Center Princeton, NJ

   
100.0
 

Princeton HealthCare System

   
21
17
 

Steam: 72 MMBtu/hr.
Chilled water: 4,700 tons

                   

       

Total Generating Capacity (MWt)

   
1,374
   
                   
                   

(a)
Capacity available under right-to-use provision of the Chilled Water Service Agreement.

Growth Strategy

              We believe that we are well positioned to grow our business through cash-accretive acquisitions from NRG and other third parties that will complement our existing portfolio, increase our cash available for distribution and enable us to increase our dividend per share.

              Pursuant to the terms of our ROFO Agreement with NRG, NRG granted us a right of first offer to acquire the ROFO Assets if, and to the extent, NRG elects to sell any of these assets prior to July 16, 2018. NRG has also indicated that it intends to present us with additional acquisition

 

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opportunities that are not covered by the ROFO Agreement. On May 5, 2014, Yield Operating LLC entered into a definitive agreement with NRG to purchase (i) Natural Gas Repowering LLC, which indirectly owns the 550 net MW El Segundo Energy Center facility ("El Segundo Energy Center") through West Holdings LLC, (ii) NRG Solar Mayfair LLC, which indirectly owns the 20 net MW TA-High Desert facility ("TA-High Desert") through TA-High Desert LLC and (iii) NRG Solar Kansas South Holdings LLC, which indirectly owns the 20 net MW Kansas South facility ("Kansas South," and together with El Segundo Energy Center and TA-High Desert, the "Acquired ROFO Assets") through NRG Solar Kansas South LLC. We refer to the acquisition of the Acquired ROFO Assets as the "Drop-Down Transactions." We closed the Drop-Down Transactions on June 30, 2014. The table below lists the remaining ROFO Assets:

 
 
Asset
  Fuel Type   Net Capacity
(MW)(1)
  COD   Offtake
(Term/Offtaker)

GRAPHIC
  CVSR(2)
Ivanpah(3)
Agua Caliente(4)
  Solar
Solar
Solar
    128
193
148
  2013
2013
2013
  25-year PPA/PG&E
20 - 25-year PPA/PG&E and SCE
25-year PPA/PG&E

(1)
Represents the maximum, or rated, electricity generating capacity of the facility in MW multiplied by NRG's percentage ownership interest in the facility as of the date of this prospectus.

(2)
Represents NRG's remaining 51.05% ownership interest in CVSR.

(3)
Represents NRG's 49.95% ownership interest in Ivanpah. Following a sale of this 49.95% interest, the remaining 50.05% of Ivanpah would be owned by NRG, Google Inc. and BrightSource Energy Inc.

(4)
Represents NRG's 51% ownership interest in Agua Caliente. The remaining 49% of Agua Caliente is owned by MidAmerican Energy Holdings Inc.

              In addition to the ROFO Assets, NRG acquired substantially all of the assets of Edison Mission Energy ("EME") on April 1, 2014. NRG has stated publicly that it intends to offer us certain of the EME assets that it believes fit within our asset portfolio (the "EME-NYLD-Eligible Assets"). NRG is not obligated to sell the remaining ROFO Assets or the EME-NYLD-Eligible Assets to us, and, if offered to us, we cannot be sure whether these assets will be offered on acceptable terms or that we will choose to consummate such acquisitions.

              We cannot assure you that we will be successful in consummating these acquisition opportunities. These acquisition opportunities may be subject to additional regulatory or third-party approvals, which could prevent or delay closing, even if we and NRG are able to agree upon terms. Even if consummated, these acquisitions may not prove to be accretive to our operating results, cash available for distribution or dividends per share. Individual acquisitions may not generate the benefits anticipated as a result of incorrect assumptions in our evaluation of the acquired assets, unforeseen consequences or other external events beyond our control. See "Risk Factors—We may not be able to effectively identify or consummate any future acquisitions on favorable terms, or at all."

              On June 3, 2014, we entered into an agreement to acquire the 947 MW Alta Wind portfolio located in Tehachapi, California and a portfolio of land leases associated with the Alta Wind portfolio (the "Alta Wind Portfolio"). We refer to the acquisition of the Alta Wind Portfolio as the "Alta Acquisition." We cannot assure you that we will be successful in consummating the Alta Acquisition. The Alta Acquisition is subject to additional regulatory and third-party approvals, which could prevent or delay closing. See "—Recent Developments," "Risk Factors—There can be no assurance that the Alta Acquisition will be consummated on the terms or timetable currently anticipated or at all, and the closing of this offering is not conditioned on the consummation of the Alta Acquisition."

 

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              The table below lists the assets to be acquired in the Alta Acquisition:

Asset
  Fuel Type   Net Capacity
(MW)(1)
  COD   Offtake
(Term/Offtaker)

Alta I

  Wind     150     2011   25-year PPA/SCE

Alta II

  Wind     150     2011   25-year PPA/SCE

Alta III

  Wind     150     2011   25-year PPA/SCE

Alta IV

  Wind     102     2011   25-year PPA/SCE

Alta V

  Wind     168     2011   25-year PPA/SCE

Alta X

  Wind     137     2014   22-year PPA/SCE

Alta XI

  Wind     90     2014   22-year PPA/SCE

(1)
Represents the maximum, or rated, electricity generating capacity of the facility in MWs as of the date of this prospectus.

Business Strategy

              Our primary business strategy is to focus on the acquisition and ownership of assets with minimal long-term price or volumetric offtake risk in order that we may be able to increase the cash dividends on our Class A common stock over time without compromising the ongoing stability of our business. Our plan for executing this strategy includes the following key components:

              Focus on contracted renewable energy and conventional generation and thermal infrastructure assets. We own and operate renewable energy and natural gas-fired generation, thermal and other infrastructure assets with proven technologies, low operating risks and stable cash flows. We believe by focusing on this core asset class and leveraging our industry knowledge, we will maximize our strategic opportunities, be a leader in operational efficiency and maximize our overall financial performance.

              Growing the business through acquisitions of contracted operating assets.    We believe that our base of operations and relationship with NRG provide a platform in the power generation and thermal sectors for strategic growth through cash accretive and tax advantaged acquisitions complementary to our existing portfolio. NRG has granted us a right of first offer to acquire the ROFO Assets if and to the extent NRG elects to sell any of these assets prior to July 2018. On June 30, 2014, we purchased from NRG the TA-High Desert, Kansas South, and El Segundo Energy Center facilities. See "—Recent Developments—Drop-Down Transactions." In addition to the ROFO Assets, NRG acquired substantially all of the assets of EME during the second quarter of 2014. NRG has stated publicly its near-term plan to commence offering to us the EME-NYLD-Eligible Assets. NRG is not obligated to sell the remaining ROFO Assets or the EME-NYLD-Eligible Assets to us, and, if offered, we cannot be sure whether these assets will be offered on acceptable terms or that we will choose to consummate such acquisitions. We also expect to have significant opportunities to acquire other generation and thermal infrastructure assets from third parties where we believe our knowledge of the market, operating expertise and access to capital provides us with a competitive advantage.

              Primary Focus on North America.    We intend to primarily focus our investments in North America (including the unincorporated territories of the United States). We believe that industry fundamentals in North America present us with significant opportunity to acquire renewable, natural gas-fired generation and thermal infrastructure assets, without creating significant exposure to currency and sovereign risk. By primarily focusing our efforts on North America, we believe we will best leverage our regional knowledge of power markets, industry relationships and skill sets to maximize value for the stockholders.

              Maintain sound financial practices to grow the dividend.    We intend to maintain a commitment to disciplined financial analysis and a balanced capital structure to enable us to increase our quarterly

 

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dividend over time and serve the long-term interests of our stockholders. Our financial practices include a risk and credit policy focused on transacting with credit-worthy counterparties; a financing policy, which focuses on seeking an optimal capital structure through various capital formation alternatives to minimize interest rate and refinancing risks, ensure stable long-term dividends and maximize value; and a dividend policy that is based on distributing all or substantially all cash available for distribution each quarter that we receive from Yield LLC. We intend to evaluate various alternatives for financing future acquisitions and refinancing of existing project-level debt, in each case, to reduce the cost of debt, extend maturities and maximize cash available for distribution. We believe we have additional flexibility to seek alternative financing arrangements, including, but not limited to, debt financings at a holding company level.

Competitive Strengths

              Stable, high quality cash flows with attractive tax profile.    Our facilities have a highly stable, predictable cash flow profile consisting of predominantly long-life electric generation assets that sell electricity under long-term fixed priced contracts or pursuant to regulated rates with credit-worthy counterparties. Additionally, our facilities have minimal fuel risk. For our four conventional assets, fuel is provided by the toll counterparty or the cost thereof is a pass-through cost under the CfD. Renewable facilities have no fuel costs, and most of our thermal infrastructure assets have contractual or regulatory tariff mechanisms for fuel cost recovery. The offtake agreements for our conventional and renewable generation facilities have a weighted-average remaining duration of approximately 17 years as of June 30, 2014 based on cash available for distribution, providing long-term cash flow stability. Our generation offtake agreements for rated counterparties for whom credit ratings are available have a weighted-average Moody's rating of A3 based on rated capacity under contract. Based on our current portfolio of assets, we do not expect to pay significant federal income tax for a period of approximately ten years. All of our assets are in the United States and accordingly have no currency or repatriation risks.

              High quality, long-lived assets with low operating and capital requirements.    We benefit from a portfolio of relatively newly-constructed assets, with all of our conventional and renewable assets having achieved COD within the past five years. Our assets are comprised of proven and reliable technologies, provided by leading original equipment manufacturers such as General Electric, or GE, Siemens AG, SunPower Corporation, or SunPower, and First Solar Inc., or First Solar. Given the modern nature of the portfolio, which includes a substantial number of relatively low operating and maintenance cost solar generation assets, we expect to achieve high fleet availability and expend modest maintenance-related capital expenditures. Additionally, with the support of services provided by NRG, we expect to continue to implement the same rigorous preventative operating and management practices that NRG uses across its fleet of assets. In 2013, NRG achieved a 0.77 Occupational Safety and Health Administration ("OSHA") recordable rate, which is within the top quartile plant operating performance for its fleet based on applicable OSHA standards. We estimate our solar portfolio has a weighted average remaining expected life (based on rated MW) of approximately 29 years.

              Significant scale and diversity.    We own and operate a large and diverse portfolio of contracted electric generation and thermal infrastructure assets. Our 1,914 net MW contracted generation portfolio benefits from significant diversification in terms of technology, fuel type, counterparty and geography. Our thermal business consists of eleven operations, seven of which are district energy centers that provide steam and chilled water to approximately 690 customers, and four of which provide generation. We believe our scale and access to best practices across the fleet improves our business development opportunities through enhanced industry relationships, reputation and understanding of regional power market dynamics. Furthermore, our diversification reduces our operating risk profile and reliance on any single market.

 

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              Relationship with NRG.    We believe our relationship with NRG provides significant benefits, including management and operational expertise, and future growth opportunities. Our executive officers have considerable experience in owning and operating, as well as developing, acquiring and integrating, generation and thermal infrastructure assets, with, on average, over 15 years in the energy sector:

    NRG Management and Operational Expertise.  We have access to the significant resources of NRG, the largest competitive power generator in the United States, to support the operational, finance, legal, regulatory and environmental aspects, and growth strategy of our business. As such, we believe we avail ourselves of best-in-class resources, including management and operational expertise.

    NRG Asset Development and Acquisition Track Record.  NRG's development and strategic teams are focused on the development and acquisition of renewable and conventional generation assets. They have successfully helped grow NRG's power generation portfolio from 24,370 net MWs at the end of 2009 to 52,466 net MWs as of May 2014.

    NRG Financing Experience.  We believe NRG has demonstrated a successful track record of sourcing attractive low-cost, long duration capital to fund project development and acquisitions. Since 2009, NRG has raised approximately $7 billion in long-term non-recourse project financing for over 20 projects from financial institutions and institutional debt markets as well as under the U.S. DOE loan guarantee program. We expect to realize significant benefits from NRG's financing and structuring expertise as well as its relationships with financial institutions and other lenders.

              Environmentally well-positioned portfolio of assets.    On a net capacity basis, our portfolio of electric generation assets consists of 454 net MW of renewable generation capacity that are non-emitting sources of power generation. Our conventional assets consist of the dual fuel-fired GenConn assets as well as the Marsh Landing simple cycle natural gas-fired peaking generation facility and the El Segundo combined cycle natural gas-fired peaking facility. We do not anticipate having to expend any significant capital expenditures in the foreseeable future to comply with current environmental regulations applicable to our generation assets. Taken as a whole, we believe our strategy will be a net beneficiary of current and potential environmental legislation and regulatory requirements that may serve as a catalyst for capacity retirements and improve market opportunities for environmentally well-positioned assets like our assets once their current offtake agreements expire.

              Thermal infrastructure business has high entry costs.    Significant capital has been invested to construct our thermal infrastructure assets, serving as a barrier to entry in the markets in which such assets operate. As of March 31, 2014, our thermal gross property, plant and equipment was approximately $421 million. Our thermal district energy centers are located in urban city areas, with the chilled water and steam delivery systems located underground. Constructing underground delivery systems in urban areas requires long lead times for permitting, rights of way and inspections and is costly. By contrast, the incremental cost to add new customers in existing markets is relatively low. Once thermal infrastructure is established, we believe it has the ability to retain customers over long periods of time and to compete effectively for additional business against stand-alone on-site heating and cooling generation facilities. Installation of stand-alone equipment can require significant modification to a building as well as significant space for equipment and funding for capital expenditures. Our system technologies often provide economies of scale in terms of fuel procurement, ability to switch between multiple types of fuel to generate thermal energy and fuel conversion efficiency. Our top ten thermal customers, which make up approximately 18% of our consolidated revenues for the twelve months ended December 31, 2013, have had a relationship with us or NRG for an average of over 20 years.

 

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Recent Developments

      Drop-Down Transactions

              On May 5, 2014, Yield Operating LLC entered into purchase and sale agreements (collectively, the "Drop-Down Purchase and Sale Agreements") with NRG Gas Development Company, LLC ("NRG Gas") and NRG Solar PV LLC ("NRG Solar" and, together with NRG Gas, the "NRG Sellers"). Each of the NRG Sellers is a wholly-owned subsidiary of NRG. Pursuant to the terms of the Drop-Down Purchase and Sale Agreements, Yield Operating LLC agreed to acquire:

    100% of the membership interests of Natural Gas Repowering LLC, which indirectly owns the El Segundo Energy Center, a 550 MW fast-start, gas-fired facility located in Los Angeles County, California, from NRG Gas;

    100% of the membership interests of NRG Solar Mayfair LLC, which indirectly owns TA-High Desert, a 20 MW solar facility located in Los Angeles County, California, from NRG Solar; and

    100% of the membership interests of NRG Solar Kansas South Holdings LLC, which indirectly owns Kansas South, a 20 MW solar facility located in Kings County, California, from NRG Solar.

              The Drop-Down Acquisitions closed on June 30, 2014. The Drop-Down Transactions represent the first drop-down of assets from NRG to Yield Inc. at an aggregate purchase price, subject to working capital adjustment, of $349 million in total cash consideration, including the assumption of approximately $657 million in project debt.

              The Drop-Down Purchase and Sale Agreements were filed as Exhibits 2.1, 2.2 and 2.3 to our Current Report on Form 8-K filed with the Securities and Exchange Commission ("SEC") on May 9, 2014, and this description of the Drop-Down Purchase and Sale Agreements is qualified in its entirety by reference to such exhibits.

      Alta Acquisition

              On June 3, 2014, Yield Inc. and Yield Operating LLC entered into a purchase and sale agreement (the "Alta Purchase and Sale Agreement") with Terra-Gen Finance Company, LLC, NTD AWAM Holdings, LLC, CHIPS Alta Wind X Holding Company, LLC and CHIPS Alta Wind XI Holding Company, LLC (collectively, the "Alta Sellers"). Pursuant to the terms of the Alta Purchase and Sale Agreement, we and Yield Operating LLC have agreed to acquire 100% of the membership interests of Alta Wind Asset Management Holdings, LLC, Alta Wind Company, LLC, Alta Wind X Holding Company, LLC and Alta Wind XI Holding Company, LLC, which own the 947 megawatts Alta Wind portfolio located in Tehachapi, California, and a portfolio of land leases associated with the Alta Wind portfolio. The purchase price for the Alta Acquisition is $870 million, plus the assumption of approximately $1.6 billion of non-recourse project financings, subject to customary working capital adjustments. Terra-Gen Operating Company, LLC ("Terra-Gen"), an affiliate of the Alta Sellers, will continue to provide day-to-day operations and maintenance services under a 10-year O&M agreement, which term will automatically extend for additional five-year periods unless either party provides notice of termination at least 90 days prior to the expiration of the then-current term. Pursuant to the terms of such agreement, Terra-Gen will be paid a fixed monthly payment (adjusted annually for changes in GDPIPD) and reimbursed for certain costs incurred.

              The Alta Purchase and Sale Agreement contains customary representations and warranties and covenants by the parties. We and the Alta Sellers are obligated, subject to certain limitations, to indemnify the other for certain customary and other specified matters, including breaches of

 

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representations and warranties, nonfulfillment or breaches of covenants and for certain liabilities and third-party claims.

              The Alta Acquisition is subject to customary closing conditions, including the receipt of regulatory approval by the Federal Energy Regulatory Commission, the U.S. Department of Justice and the Federal Trade Commission under the Hart-Scott-Rodino Act, as well as notice of the acquisition to the California Public Utilities Commission. We intend to fund the purchase price through a combination of newly issued debt, cash on hand and the net proceeds from this offering. We expect the Alta Acquisition to close during the third quarter of 2014.

              The foregoing summary of the Alta Purchase and Sale Agreement does not purport to be complete and is qualified in its entirety by reference to the Alta Purchase and Sale Agreement, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on June 9, 2014, and this description of the Alta Purchase and Sale Agreement is qualified in its entirety by reference to such exhibit.

      Senior Notes Acquisition Financing

              We intend to fund the purchase price of the Alta Acquisition through a combination of cash on hand, the net proceeds of this offering and newly issued debt. The consolidated combined pro forma financial information included in this prospectus reflects an assumed issuance of $400 million of newly issued senior notes at an estimated annual interest rate of 5.50%. Based on these estimates, the incurrence of such debt would result in approximately $22.0 million of additional interest expense per year. The actual interest rate may vary from the estimate, and a 0.25% variance in the interest rate would increase or decrease, as applicable, annual pro forma interest expense by approximately $1.0 million. Additionally, the actual amount of debt issued may vary, and a $50.0 million change in the amount of corporate debt issued would increase or decrease, as applicable, annual pro forma interest expense by approximately $2.75 million. To the extent we obtain financing in excess of the amount needed to fund the Alta Acquisition, we will use the excess proceeds from this offering for working capital and general corporate purposes. We do not have any commitments for any such debt financing, and there can be no assurance that it will be available on acceptable terms or at all.

 

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      Organizational Structure

              We were formed by NRG as a Delaware corporation on December 20, 2012. On July 22, 2013, we issued 22,511,250 shares of Class A common stock in an initial public offering. We utilized the net proceeds of the initial public offering to acquire 19,011,250 Class A units of Yield LLC from NRG, in return for $395 million and 3,500,000 Class A units of Yield LLC directly from Yield LLC in return for $73 million. In connection with the acquisition of the Class A units, Yield Inc. also became the sole managing member of Yield LLC thereby acquiring a controlling interest in Yield LLC. Currently, we own 34.5% of Yield LLC and consolidate the results of Yield LLC through our controlling interest, with NRG's 65.5% interest shown as noncontrolling interest in the financial statements. The following table summarizes certain relevant aspects of our organizational structure as of March 31, 2014:

GRAPHIC

              Upon completion of this offering:

    the outstanding shares of Class A common stock will represent an aggregate 43.6% economic voting interest in NRG Yield, Inc. and NRG, through its ownership of shares of Class B common stock, will have an aggregate 56.4% voting interest in NRG Yield, Inc. (or a 44.7% voting interest and a 55.3% voting interest, respectively, if the underwriters exercise in full their option to purchase additional shares of our Class A common stock); and

    the holders of our Class A common stock will own in the aggregate a 43.6% economic interest in our business through our ownership of Class A units of Yield LLC and NRG will own in the aggregate a 56.4% economic interest in our business through its ownership of Class B units of Yield LLC (or a 44.7% economic interest and a 55.3% economic interest, respectively, if the underwriters exercise in full their option to purchase additional shares of our Class A common stock).

 

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Our Agreements with NRG

              In connection with our initial public offering, we entered into a Management Services Agreement and ROFO Agreement with NRG. Those agreements were entered into subsequent to negotiations between affiliated parties and, consequently, may not be as favorable to us as they might have been if we had negotiated them with an unaffiliated third party. For a more comprehensive discussion of the agreements that we have entered into with NRG and certain of its affiliates, see "Certain Relationships and Related Party Transactions," "Governance of the Company" and "Executive Compensation" in our Proxy Statement for our 2014 annual meeting of stockholders filed with the SEC on March 26, 2014 (our "2014 Proxy Statement"), incorporated herein by reference. For a discussion of the risks related to our relationship with NRG, please read "Risks Related to Our Relationship with NRG" under the caption "Risk Factors" in this prospectus.

Summary of Risk Factors

              We are subject to a number of risks, including risks that may prevent us from achieving our business objectives or may materially and adversely affect our business, financial condition, results of operations, cash flows and prospects. You should carefully consider these risks, including the risks set forth in the "Risk Factors" section of this prospectus and the "Risk Factors" section of our 2013 Annual Report for a discussion of the factors you should consider before investing in our Class A common stock. Risks related to our business include, among others:

    our cash dividend policy, which targets the distribution of all or substantially all of our cash available for distribution each quarter, may prevent us from growing as fast as businesses that reinvest their available cash to expand ongoing operations;

    if we are unable to replace expiring or terminated offtake agreements with agreements on similar terms or at all, our results of operations and cash flows could be materially and adversely affected. Furthermore, any replacement offtake agreements may have contract prices below today's market prices;

    if we are unable to meet our performance expectations for newly constructed power generation facilities, operate our plants efficiently or manage our capital expenditures, we may be unable to achieve targeted dividend levels for holders of our Class A common stock;

    if we are unable to satisfy financial and other covenants in our existing or future indebtedness, we may be unable to pay cash dividends and may experience an event of default which, if not cured or waived, may entitle our lenders to demand repayment or enforce their security interests, which could have a material adverse effect on our business, financial condition, results of operations and cash flows;

    if we are unable to address additional costs or delays in the construction and operation of new plants, our financial return on these investments may be lower than expected. Alternatively, the completion of such facilities or the distribution of cash by such facilities to us may be delayed;

    if we are unable to consummate the Alta Acquisition on favorable terms or at all, our ability to execute our growth strategy may be impeded and our ability to increase the amount of dividends paid to holders of our Class A common stock may be limited;

    if we are unable to utilize various federal, state and local government incentives to acquire additional renewable assets in the future, or the terms of such incentives are revised in a manner that is less favorable to us, we may suffer a material adverse effect on our business, financial condition, results of operations and cash flows;

 

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    if we experience any unexpected operational or mechanical failures, including failure associated with breakdowns and forced outages, our facilities' generating capacity could be reduced below expected levels, reducing our revenues. These reductions may jeopardize our ability to pay dividends to holders of our Class A common stock at forecasted levels or at all;

    if we experience a failure or delay in the operation or development of the interconnection and transmission facilities that deliver the wholesale power we sell from our electric generation assets to our customers, we may lose revenues;

    failures or delays in the operation of interconnection or transmission facilities;

    our ability to maintain growth while distributing all or substantially all of our cash available for distribution;

    the market price of our Class A common stock may be volatile or may decline, and you may not be able to resell your shares at or above the offering price; and

    our relationship with NRG, as our controlling stockholder, may have the effect of delaying or preventing a change in control of our company or discouraging others from making tender offers for our shares, which could prevent stockholders from receiving a premium for their shares. Our dependence on the management and administration services to be provided by NRG under the Management Services Agreement and under project level agreements may cause a material adverse effect on our business, financial condition, results of operations and cash flows, in the event NRG fails to perform its obligations under these agreements.

Corporate Information

              Our principal executive offices are located at NRG Yield, Inc., 211 Carnegie Center, Princeton, New Jersey. Our telephone number is (609) 524-4500. Our website is located at http://www.nrgyield.com. We make our periodic reports and other information filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), available, free of charge, through our website, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus. The SEC maintains an internet site at http://www.sec.gov that contains reports and other information regarding issuers that file electronically with the SEC.

JOBS Act

              As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an "emerging growth company," as defined in the Jumpstart Our Business Startups Act (the "JOBS Act"). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act"), for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

 

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              An emerging growth company may also take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

    not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act");

    reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

    exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

              We may take advantage of these provisions until July 22, 2018. However, if certain events occur prior to July 22, 2018, including if we become a "large accelerated filer," our annual gross revenues exceed $1.0 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such period.

              We have elected to take advantage of certain of the reduced disclosure obligations regarding executive compensation in this prospectus and may elect to take advantage of other reduced burdens in future filings. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

 

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THE OFFERING

Shares of Class A common stock offered by us

  10,500,000 shares of our Class A common stock.

Shares of Class A common stock outstanding after this offering

 

33,011,250 shares of our Class A common stock (or 34,586,250 shares of Class A common stock if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Shares of Class B common stock outstanding after this offering

 

42,738,750 shares of our Class B common stock, which NRG will continue to beneficially own upon completion of this offering.

Class A units and Class B units of Yield LLC outstanding after this offering

 

33,011,250 Class A units of Yield LLC and 42,738,750 Class B units of Yield LLC (or 34,586,250 Class A units and 42,738,750 Class B units of Yield LLC if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Option to purchase additional shares of our Class A common stock

 

We have granted the underwriters an option to purchase up to an additional 1,575,000 shares of our Class A common stock from us, at the public offering price, less the underwriting discounts, within 30 days from the date of this prospectus. We will use the proceeds from the exercise of such option to purchase additional shares of Yield LLC Class A units from Yield LLC. Accordingly, we will not retain the proceeds from any exercise by the underwriters of their option to purchase additional shares.

Use of proceeds

 

We intend to use all of the net proceeds from this offering to acquire newly issued Yield LLC Class A units, representing 13.9% of Yield LLC's outstanding membership units after this offering, from Yield LLC. We intend to cause Yield LLC to use the net proceeds of this offering together with cash on hand and the proceeds from newly issued debt securities to fund the aggregate $870 million cash purchase price of the Alta Acquisition. However, this offering is not conditioned upon the completion of the Alta Acquisition, and, to the extent the Alta Acquisition is not completed, we expect that Yield LLC will use the net proceeds from this offering for general corporate purposes, including to fund other acquisition opportunities that may become available to us.

 

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Voting rights

 

Each share of our Class A and Class B common stock entitles its holder to one vote on all matters to be voted on by stockholders generally. Holders of our shares of Class A and Class B common stock vote together as a single class on all matters presented to stockholders for their vote or approval, except as otherwise required by law. See "Description of Capital Stock."

 

Through its ownership of our Class B common stock, NRG will hold shares of our common stock having 56.4% (or 55.3% if the underwriters exercise in full their option to purchase additional shares of Class A common stock) of the combined voting power of all of our common stock outstanding upon completion of this offering. As a result, NRG will continue to be able to exercise control over matters requiring the approval of our stockholders, including the election of our directors and the approval of significant corporate transactions.

Economic interest

 

Immediately following this offering, the holders of our Class A common stock will own in the aggregate a 43.6% economic interest in our business through our ownership of Class A units of Yield LLC and NRG will own in aggregate a 56.4% economic interest in our business through its ownership of Class B units of Yield LLC (or a 44.7% economic interest and a 55.3% economic interest, respectively, if the underwriters exercise in full their option to purchase additional shares of our Class A common stock).

Exchange and registration rights

 

Each Class B unit of Yield LLC is exchangeable for a share of our Class A common stock, subject to equitable adjustments for stock splits, stock dividends and reclassifications in accordance with the terms of the Exchange Agreement (defined below). When NRG exchanges a Class B unit of Yield LLC for a share of our Class A common stock, we will automatically redeem and cancel a corresponding share of our Class B common stock and the Class B unit will automatically convert into a Class A unit of Yield LLC issued to us. See "Certain Relationships and Related Party Transactions—Second Amended and Restated Operating Agreement of Yield LLC—Exchange Agreement."

 

Pursuant to a registration rights agreement that we have entered into with NRG, we agreed to file a registration statement for the sale of the shares of our Class A common stock that are issuable upon exchange of Class B units of Yield LLC upon request and cause that registration statement to be declared effective by the U.S. Securities and Exchange Commission ("SEC") as soon as practicable thereafter. See "Certain Relationships and Related Party Transactions—Registration Rights Agreement" for a description of the timing and manner limitations on resales of these shares of our Class A common stock.

 

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Cash dividends

 

Our ability to pay the regular quarterly dividend is subject to various restrictions and other factors described in more detail under the caption "Cash Dividend Policy." We expect to pay a quarterly dividend on or about the 75th day following the expiration of each fiscal quarter to holders of our Class A common stock of record on or about the 60th day following the last day of such fiscal quarter. However, we do not have a legal obligation to declare or pay dividends at a specific quarterly dividend level or at all. See "Cash Dividend Policy."

 

On May 5, 2014, we declared a quarterly dividend of $0.35 per share ($1.40 per share annualized) on our outstanding Class A common stock payable on June 16, 2014 to holders of record on June 2, 2014. See "Cash Dividend Policy" for a description of our dividend history.

Material federal income tax consequences to non-U.S. holders

 

For a discussion of the material federal income tax consequences that may be relevant to prospective investors who are non-U.S. holders, please read "Material U.S. Federal Income Tax Consequences to Non-U.S. Holders."

FERC-related purchase restrictions

 

No purchaser of Class A common stock in this offering will be permitted to purchase an amount of our Class A common stock that would cause such purchaser and its associate or affiliate companies in the aggregate to hold a large enough voting interest to convey direct or indirect "control" over any of Yield LLC's public utility subsidiaries. See "Notice to Investors."

Exchange listing

 

Our Class A common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "NYLD."

              The number of shares of our common stock to be outstanding after this offering is based on 22,511,250 shares of our Class A common stock and 42,738,750 shares of our Class B common stock outstanding as of May 31, 2014 and excludes (i) 42,738,750 shares of our Class A common stock reserved for issuance upon the subsequent exchange of Class B units of Yield LLC that will be outstanding immediately after this offering; (ii) 978,750 shares of our Class A common stock reserved for issuance under our equity-based compensation plans; and (iii) 9,449,447 shares of our Class A common stock reserved for issuance upon conversion of our outstanding 3.50% Convertible Notes. Except as otherwise noted, the number of shares of our common stock to be outstanding after this offering excludes 1,575,000 shares of our Class A common stock which may be issued upon the exercise of the underwriters' option to purchase additional shares.

 

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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

              The following table shows summary historical financial data at the dates and for the periods indicated. The summary historical financial data as of and for the years ended December 31, 2011, 2012 and 2013 have been derived from our audited consolidated financial statements included in our 2013 Annual Report which is incorporated by reference herein. The summary historical financial data as of and for the three months ended March 31, 2013 and 2014 were derived from our unaudited consolidated financial statements included in our quarterly report on Form 10-Q for the three months ended March 31, 2014 (the "First Quarter 10-Q") which is incorporated herein by reference, and include all adjustments, consisting of normal recurring adjustments, which management considers necessary for a fair presentation of the financial position and the results of operations for such periods, and results for the interim periods are not necessarily indicative of the results for the full year. For all periods prior to July 22, 2013 (the date we consummated the initial public offering of our Class A common stock), the data below reflects our accounting predecessor which were prepared on a "carve-out" basis from NRG and are intended to represent the financial results of the contracted renewable energy and conventional generation and thermal infrastructure assets that were acquired by Yield LLC on July 22, 2013. For all periods subsequent to the initial public offering, the data below reflect our consolidated financial results. The summary historical financial data are not necessarily indicative of results to be expected in future periods.

              The summary pro forma financial data, for the year ended December 31, 2013 and for the three months ended March 31, 2014 have been derived from the pro forma financial statements included elsewhere in this prospectus. The summary pro forma financial data, for the year ended December 31, 2013 and for the three months ended March 31, 2014, give effect to the Drop-Down Transactions and the Alta Acquisition as if they occurred on January 1, 2013. The summary pro forma balance sheet data, as of March 31, 2014, give effect to the acquisitions as if they occurred on March 31, 2014.

              As described in the notes accompanying the pro forma financial statements, the pro forma financial statements have been prepared using the acquisition method of accounting under existing United States generally accepted accounting principles ("GAAP") and the regulations of the SEC. The Drop-Down Transactions will be accounted for as a transfer of entities under common control and the purchase price will be allocated to the carrying values of the assets acquired and liabilities assumed as of the date of the acquisition. The expected purchase price for the Alta Acquisition will be allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition. Valuations necessary to determine the fair value of the assets and liabilities have not been completed and cannot be made prior to the completion of the transaction.

              Accordingly, the pro forma purchase price adjustments are preliminary, subject to future adjustments, and have been made solely for the purpose of providing the unaudited pro forma combined financial information presented herewith. Differences between these preliminary estimates and the final acquisition accounting may occur and these differences could have a material impact on the accompanying pro forma financial statements and the combined company's future results of operations and financial position. The pro forma financial statements have been presented for informational purposes only and are not necessarily indicative of what the combined company's results of operations and financial position would have been had the Drop-Down Transactions and Alta Acquisition been completed on the dates indicated. Yield Operating LLC could incur significant costs to integrate the businesses. The pro forma financial statements do not reflect the cost of any integration activities or benefits that may result from synergies that may be derived from any integration activities. In addition, the pro forma financial statements do not purport to project the future results of operations or financial position of the combined company.

 

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              This offering is not conditioned on the prior closing of the Alta Acquisition and we cannot assure you that the transactions will be consummated on the terms or timetable currently contemplated or at all. See "Risk Factors—Risks Related to the Alta Acquisition—There can be no assurance that the Alta Acquisition will be consummated on the terms or timetable currently anticipated or at all, and the closing of this offering is not conditioned on the consummation of the Alta Acquisition."

              The following table should be read together with, and is qualified in its entirety by reference to, the historical consolidated financial statements and the accompanying notes appearing elsewhere in this prospectus, the "Pro Forma Financial Statements" and the accompanying notes appearing elsewhere in this prospectus. Among other things, the historical consolidated statements and Pro Forma Financial Statements include more detailed information regarding the basis of presentation for the information in the following table. The table should also be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2013 Annual Report and First Quarter 10-Q, which are incorporated herein by reference, and "Certain Relationships and Related Party Transactions—Management Services Agreement" included in our 2014 Proxy Statement, which is incorporated herein by reference.

 
   
   
   
   
   
   
  Pro Forma
Three
Months
Ended
March 31,
2014
 
 
  Fiscal Year Ended
December 31,
  Pro Forma
Fiscal Year
Ended
December 31,
2013
  Three Months
Ended
March 31,
 
 
  2011   2012   2013   2013   2014  
 
  (in millions)
 

Statement of Operating Data:

                                           

Operating Revenues:

                                           

Total operating revenues

  $ 164   $ 175   $ 313   $ 562   $ 53   $ 110   $ 182  

Operating Costs and Expenses

                                           

Cost of operations

    108     112     127     184     29     53     70  

Depreciation and amortization

    22     25     51     148     10     17     50  

General and administrative

                4             1  

General and administrative-affiliate

    6     7     7     7     2     2     2  
                               

Total operating costs and expenses

    136     144     185     343     41     72     123  
                               

Operating Income

    28     31     128     219     12     38     59  

Other Income/Expense

                                           

Equity in earnings of unconsolidated affiliates(1)

    13     19     22     22     4     1     1  

Other income

    2     1     2     3         1     1  

Interest expense

    (19 )   (28 )   (35 )   (135 )   (5 )   (19 )   (66 )
                               

Total other expense

    (4 )   (8 )   (11 )   (110 )   (1 )   (17 )   (64 )
                               

Income/(Loss) Before Income Taxes

    24     23     117     109     11     21     (5 )

Income tax expense / (benefit)

    9     10     8     10         3     (1 )
                               

Net Income/(Loss)

  $ 15   $ 13   $ 109   $ 99   $ 11   $ 18   $ (4 )
                               
                               

Less predecessor income prior to initial public offering on July 22, 2013

                54     54                    
                                         

Net Income Subsequent to Initial Public Offering

                55     45                    

Less net income attributable to noncontrolling interest

                42     31           14     (2 )
                                       

Net Income attributable to NRG Yield, Inc

              $ 13   $ 14         $ 4   $ (2 )
                                     
                                     

Other Financial Data:

                                           

Adjusted EBITDA(2)

  $ 80   $ 101   $ 244   $ 431   $ 32   $ 69   $ 122  

Capital expenditure

    (132 )   (380 )   (238 )         (179 )   (19 )      

Cash Flow Data:

                                           

Net cash provided by (used in):

                                           

Operating activities

  $ 33   $ 58   $ 141         $ 10   $ 16        

Investing activities

    (219 )   (405 )   (388 )         (182 )   127        

Financing activities

    180     345     261           173     241        

Balance Sheet Data (at period end):

                                           

Cash and cash equivalents

  $ 24   $ 22   $ 36         $ 23   $ 420   $ 158  

Property and equipment, net

    526     1,598     1,541           1,451     1,530     3,762  

Total assets

    874     1,964     2,313           1,929     2,534     5,675  

Total liabilities

    487     1,124     1,302           1,339     1,503     4,233  

Total equity

    387     840     1,011           590     1,031     5,675  

(1)
Our unconsolidated affiliates include CVSR, Avenal and GenConn.

 

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(2)
Adjusted EBITDA is a non-GAAP financial measure. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. 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 define Adjusted EBITDA as net income less interest income and equity in earnings of unconsolidated affiliates before net interest expense, income taxes and depreciation, amortization and accretion, as adjusted for contract amortization, pro-rata adjusted earnings before interest expense, depreciation, amortization and income taxes, mark-to-market gains or losses, asset write offs and impairments and factors that we do not consider indicative of future operating performance. We collectively group together equity earnings in unconsolidated affiliates and the pro-rata adjusted earnings before interest expense, depreciation, amortization and income taxes from our unconsolidated affiliates and refer to these amounts as adjustments to reflect our pro-rata share of Adjusted EBITDA in unconsolidated affiliates. 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 debt service capabilities; and

    it is used by our management for internal planning purposes, including aspects of our consolidated operating budget and capital expenditures.

    Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:

    it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

    it does not reflect changes in, or cash requirements for, working capital;

    it does not reflect significant interest expense or the cash requirements necessary to service interest or principal payments on our outstanding debt;

    it does not reflect payments made or future requirements for income taxes;

    it adjusts for contract amortization, mark-to-market gains or losses, asset write offs, impairments and factors that we do not consider indicative of future performance;

    although it reflects adjustments for factors that we do not consider indicative of future performance, we may, in the future, incur expenses similar to the adjustments reflected in our calculation of Adjusted EBITDA in this prospectus; and

    although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect cash requirements for such replacements.

    Investors are encouraged to evaluate each adjustment and the reasons we consider it appropriate for supplemental analysis.

 

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              The following table presents a reconciliation of Adjusted EBITDA to Net Income/(Loss):

 
  Fiscal Year Ended
December 31,
  Pro Forma
Fiscal Year
Ended
December 31,
2013
  Three Months
Ended
March 31,
   
 
 
  Pro Forma
Three Months
Ended
March 31, 2014
 
 
  2011   2012   2013   2013   2014  
 
   
   
   
  (in millions)
   
 

Net Income/(Loss)

  $ 15   $ 13   $ 109   $ 99   $ 11   $ 18   $ (4 )
                               

Less:

                                           

Interest income

    (2 )   (1 )       (3 )           (1 )

Add:

                                           

Depreciation, amortization and accretion

    22     25     51     148     10     17     50  

Interest expense

    19     28     34     135     5     19     66  

Income tax expense

    9     10     8     10         3     (1 )

Contract amortization

    1     1     2     2     1          

Equity in earnings of unconsolidated affiliates

    (13 )   (19 )   (22 )   (22 )   (4 )   (1 )   (1 )

Pro-rata Adjusted EBITDA from unconsolidated affiliates(a)

    29     44     62     62     9     13     13  
                               

Adjustments to reflect Yield's pro-rata share of Adjusted EBITDA in unconsolidated affiliates(b)

    16     25     40     40     5     12     12  
                               

Adjusted EBITDA

  $ 80   $ 101   $ 244   $ 431   $ 32   $ 69   $ 122  
                               
                               

(a)
For a definition of Pro-rata Adjusted EBITDA from unconsolidated affiliates, see "Cash Dividend Policy—Assumptions and Considerations—Pro-rata Adjusted EBITDA from Unconsolidated Affiliates."

(b)
Reflects adjustment to net income to derive Yield's proportionate share of pro-rata Adjusted EBITDA from unconsolidated affiliates based on its ownership in such unconsolidated affiliates.

 

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RISK FACTORS

              An investment in our Class A common stock involves significant risks. Before making an investment decision, and in consultation with your own financial and legal advisors, you should carefully read and consider the risk factors described below as well as the other information included or incorporated by reference in this prospectus and under "Risk Factors" in our 2013 Annual Report, which are incorporated in this prospectus by reference.

Risks Related to Our Business

Certain of our facilities are newly constructed and may not perform as we expect.

              All of our conventional and renewable assets have achieved commercial operations within the past five years. The ability of these facilities to meet our performance expectations is subject to the risks inherent in newly constructed power generation facilities and the construction of such facilities, including, but not limited to, degradation of equipment in excess of our expectations, system failures and outages. The failure of these facilities to perform as we expect could have a material adverse effect on our business, financial condition, results of operations and cash flows and our ability to pay dividends to holders of our Class A common stock.

Pursuant to our dividend policy, we intend to distribute all or substantially all of our cash available for distribution through regular quarterly distributions and dividends, and our ability to grow and make acquisitions through cash on hand could be limited.

              We expect to distribute all or substantially all of our cash available for distribution each quarter and to rely primarily upon external financing sources, including the issuance of debt and equity securities and, if applicable, borrowings under our Revolving Credit Facility, to fund our acquisitions and growth capital expenditures. We may be precluded from pursuing otherwise attractive acquisitions if the projected short-term cash flow from the acquisition or investment is not adequate to service the capital raised to fund the acquisition or investment, after giving effect to our available cash reserves.

              Our growth may not be as fast as that of businesses that reinvest their available cash to expand ongoing operations. To the extent we issue additional equity securities in connection with any acquisitions or growth capital expenditures, the payment of dividends on these additional equity securities may increase the risk that we will be unable to maintain or increase our per share dividend. The incurrence of bank borrowings or other debt by us or our subsidiaries to finance our growth strategy will result in increased interest expense and the imposition of additional or more restrictive covenants, which, in turn, may impact the cash distributions we receive to distribute to holders of our Class A common stock.

We may not be able to effectively identify or consummate any future acquisitions on favorable terms, or at all.

              Our business strategy includes growth through the acquisitions of additional generation assets (including through corporate acquisitions). This strategy depends on our ability to successfully identify and evaluate acquisition opportunities and consummate acquisitions on favorable terms. However, the number of acquisition opportunities is limited. In addition, we will compete with other companies for these limited acquisition opportunities, which may increase our cost of making acquisitions or cause us to refrain from making acquisitions at all. Some of our competitors for acquisitions are much larger than us with substantially greater resources. These companies may be able to pay more for acquisitions and may be able to identify, evaluate, bid for and purchase a greater number of assets than our financial or human resources permit. If we are unable to identify and consummate future acquisitions, it will impede our ability to execute our growth strategy and limit our ability to increase the amount of dividends paid to holders of our Class A common stock.

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              Furthermore, our ability to acquire future renewable facilities may depend on the viability of renewable assets generally. These assets currently are largely contingent on public policy mechanisms including investment tax credits ("ITCs"), cash grants, loan guarantees, accelerated depreciation, RPS and carbon trading plans. These mechanisms have been implemented at the state and federal levels to support the development of renewable generation, demand-side and smart grid and other clean infrastructure technologies. The availability and continuation of public policy support mechanisms will drive a significant part of the economics and viability of our growth strategy and expansion into clean energy investments.

Our ability to effectively consummate future acquisitions also depends on our ability to arrange the required or desired financing for acquisitions.

              We may not have sufficient availability under our credit facilities or have access to project-level financing on commercially reasonable terms when acquisition opportunities arise. An inability to obtain the required or desired financing could significantly limit our ability to consummate future acquisitions and effectuate our growth strategy. If financing is available, utilization of our credit facilities or project-level financing for all or a portion of the purchase price of an acquisition could significantly increase our interest expense, impose additional or more restrictive covenants and reduce cash available for distribution. Similarly, the issuance of additional equity securities as consideration for acquisitions could cause significant stockholder dilution and reduce our per share cash available for distribution if the acquisitions are not sufficiently accretive. Our ability to consummate future acquisitions may also depend on our ability to obtain any required regulatory approvals for such acquisitions, including, but not limited to, approval by the U.S. Federal Energy Regulatory Commission ("FERC") under Section 203 of the FPA.

              Finally, the acquisition of companies and assets are subject to substantial risks, including the failure to identify material problems during due diligence (for which we may not be indemnified post-closing), the risk of over-paying for assets (or not making acquisitions on an accretive basis) and the ability to retain customers. Further, the integration and consolidation of acquisitions requires substantial human, financial and other resources and, ultimately, our acquisitions may divert management's attention from our existing business concerns, disrupt our ongoing business or not be successfully integrated. There can be no assurances that any future acquisitions will perform as expected or that the returns from such acquisitions will support the financing utilized to acquire them or maintain them. As a result, the consummation of acquisitions may have a material adverse effect on our business, financial condition, results of operations and cash flows and ability to pay dividends to holders of our Class A common stock.

We recently published guidance for the second quarter of 2014 and for the year ending December 31, 2014 giving effect to the acquisition of the Acquired ROFO Assets and, separately, published guidance indicating our expected increase in cash available for distribution by 2016 from the Alta Wind Portfolio. We also recently revised our targeted dividend growth rate for the next five years. Our future results of operations and dividend paying ability are subject to significant business, economic, financial, regulatory and competitive risks that could cause our actual cash available for distribution, in the aggregate and/or on a per-share basis, to differ materially from our current expectations.

              We recently published guidance for the second quarter of 2014 and for the year ending December 31, 2014 giving effect to the acquisition of the Acquired ROFO Assets and, separately, published guidance indicating our expected increase in cash available for distribution by 2016 from the Alta Wind Portfolio. This guidance is based on an assumption that we successfully consummate these acquisitions and integrate these assets into our business as well as other assumptions that our management believes to be reasonable, including that no unexpected risks materialize over the next 18 months in the case of the guidance related to the Alta Wind Portfolio. This guidance is also based in part upon the historical results of the Acquired ROFO Assets and the Alta Wind Portfolio, which

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are not necessarily indicative of future operating performance. The future performance of our project portfolio, including our existing projects, the Acquired ROFO Assets and the Alta Wind Portfolio, will depend on a number of variables, including the future operating costs of our facilities, our facilities' future level of power generation, interest rates, administrative expenses, tax treatment of income, future capital expenditure requirements, budget and the absence of material adverse changes in economic conditions or government regulations. Unanticipated developments in respect of any one or more than one of these variables, or any of the other factors discussed in this "Risk Factors" section, will cause our future results of operations to be different from, and possibly materially worse than, the pro forma financial information included, or incorporated by reference into, this prospectus and may cause our actual results to be lower than our published guidance with respect to cash available for distribution in the second quarter of 2014 and the year ending December 31, 2014 as well as our increase in cash available for distribution by 2016. We make no representation that actual results achieved in a period will be the same, in whole or in part, as our stated guidance for the period.

              The factors described above may also impact our ability to achieve our targeted compound annual dividend growth rate per share over a five-year period. This target assumes that no unexpected risks materialize over the next five years and is based on additional assumptions, including the purchase price of projects we acquire, our cost of capital, our share price, the ratio of debt to equity with respect to the financing of acquisitions and whether we have the financial resources to acquire projects accretive to cash available for distribution and the timing of such acquisitions. We have established our target dividend growth rate based upon an assumption that we will continue to have the opportunity to acquire projects from NRG and other third parties at prices that will prove accretive to cash available for distribution. However, we may not be able to acquire such projects and, even if we do continue to make acquisitions, we may not achieve the targeted growth rate for various reasons, including those described in the prior paragraph and elsewhere in this "Risk Factors" section. If we are unable to complete additional accretive acquisitions during the five-year period on favorable terms, or if the projects we acquire do not supplement our cash available for distribution consistent with our expectations, we may not be able to generate sufficient cash available for distribution sufficient to grow our dividend to the level we are currently targeting, if at all.

Our indebtedness could adversely affect our ability to raise additional capital to fund our operations or pay dividends. It could also expose us to the risk of increased interest rates and limit our ability to react to changes in the economy or our industry as well as impact our cash available for distribution.

              As of March 31, 2014, there was $345 million aggregate principal amount of our 3.50% Convertible Notes outstanding and we had approximately $1,058 million of project-level debt which was incurred by our non-guarantor subsidiaries. In addition, our share of our unconsolidated affiliates' total indebtedness and letters of credit outstanding, as of March 31, 2014, totaled approximately $564 million and $23 million, respectively (calculated as our unconsolidated affiliates' total indebtedness as of such date multiplied by our percentage membership interest in such assets). We also had $90 million of letters of credit outstanding to support contracted obligations at our project-level entities as of March 31, 2014. As of March 31, 2014, we had borrowing availability of $60 million under the revolving credit facility provided by our revolving credit facility (the "Revolving Credit Facility"). On April 25, 2014, each of Yield Operating LLC, as borrower, and Yield LLC, as guarantor, amended and restated the Revolving Credit Facility (the "Amended and Restated Credit Agreement") increasing the availability to $450 million. Our substantial debt could have important negative consequences on our financial condition, including:

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              Our Amended and Restated Credit Agreement contains financial and other restrictive covenants that limit our ability to return capital to stockholders or otherwise engage in activities that may be in our long-term best interests. Our inability to satisfy certain financial covenants could prevent our paying cash dividends, and our failure to comply with those and other covenants could result in an event of default, which, if not cured or waived, may entitle the related lenders to demand repayment or enforce their security interests, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, failure to comply with such covenants may entitle the related lenders to demand repayment and accelerate all such indebtedness.

              The agreements governing our project-level financing contain financial and other restrictive covenants that limit our project subsidiaries' ability to make distributions to us or otherwise engage in activities that may be in our long-term best interests. The project-level financing agreements generally prohibit distributions from the project entities to us unless certain specific conditions are met, including the satisfaction of certain financial ratios. Our inability to satisfy certain financial covenants may prevent cash distributions by the particular project(s) to us, and our failure to comply with those and other covenants could result in an event of default, which, if not cured or waived, may entitle the related lenders to demand repayment or enforce their security interests, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, failure to comply with such covenants may entitle the related lenders to demand repayment and accelerate all such indebtedness. If we are unable to make distributions from our project-level subsidiaries, it would likely have a material adverse effect on our ability to pay dividends to holders of our Class A common stock.

              Letter of credit facilities to support project-level contractual obligations generally need to be renewed after five to seven years, at which time we will need to satisfy applicable financial ratios and covenants. If we are unable to renew our letters of credit as expected or replace them with letters of credit under different facilities on favorable terms or at all, we may experience a material adverse effect on our business, financial condition, results of operations and cash flows. Furthermore, such inability may constitute a default under certain project-level financing arrangements, restrict the ability of the project-level subsidiary to make distributions to us and/or reduce the amount of cash available at such subsidiary to make distributions to us.

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              In addition, our ability to arrange financing, either at the corporate level or at a non-recourse project-level subsidiary, and the costs of such capital, are dependent on numerous factors, including:

              We may not be successful in obtaining additional capital for these or other reasons. Furthermore, we may be unable to refinance or replace project-level financing arrangements or other credit facilities on favorable terms or at all upon the expiration or termination thereof. Our failure, or the failure of any of our projects, to obtain additional capital or enter into new or replacement financing arrangements when due may constitute a default under such existing indebtedness and may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Certain of our long-term bilateral contracts with state governments could be declared invalid by courts of competent jurisdiction.

              A significant portion of our revenues are derived from long-term bilateral contracts with state-regulated utilities. Other state-regulated contracts, to which we are not a party, are being challenged in federal court and have been declared unconstitutional on the grounds that the rate for energy and capacity established by the state-regulated contracts impermissibly conflict with the rate for energy and capacity established by FERC. To date, federal district courts in New Jersey and Maryland have struck down contracts on similar grounds. The U.S. Court of Appeals for the Fourth Circuit upheld the Maryland court decision, while the New Jersey decision is currently pending before the U.S. Court of Appeals for the Third Circuit. These cases are ongoing, and we cannot predict the ultimate outcome of these cases at this time. If certain of our state-regulated agreements with utilities are held to be invalid, we may be unable to replace such contracts, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The generation of electric energy from solar and wind energy sources depends heavily on suitable meteorological conditions.

              If solar or wind conditions are unfavorable, our electricity generation and revenue from renewable generation facilities may be substantially below our expectations. The electricity produced and revenues generated by a solar electric or wind energy generation facility is highly dependent on suitable solar or wind conditions, as applicable, and associated weather conditions, which are beyond our control. Furthermore, components of our system, such as solar panels and inverters, could be damaged by severe weather, such as hailstorms or tornadoes. Replacement and spare parts for key components may be difficult or costly to acquire or may be unavailable. Unfavorable weather and atmospheric conditions could impair the effectiveness of our assets or reduce their output beneath their rated capacity or require shutdown of key equipment, impeding operation of our renewable assets.

              We base our investment decisions with respect to each renewable generation facility on the findings of related wind and solar studies conducted on-site prior to construction or based on historical

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conditions at existing facilities. However, actual climatic conditions at a facility site, particularly wind conditions, may not conform to the findings of these studies, and therefore, our solar and wind energy facilities may not meet anticipated production levels or the rated capacity of our generation assets, which could adversely affect our business, financial condition and results of operations and cash flows.

Operation of electric generation facilities involves significant risks and hazards customary to the power industry that could have a material adverse effect on our business, financial condition, results of operations and cash flows.

              The ongoing operation of our facilities involves risks that include the breakdown or failure of equipment or processes or performance below expected levels of output or efficiency due to wear and tear, latent defect, design error, operator error or force majeure events, among other things. Operation of our facilities also involves risks that we will be unable to transport our product to our customers in an efficient manner due to a lack of transmission capacity. Unplanned outages of generating units, including extensions of scheduled outages due to mechanical failures or other problems, occur from time to time and are an inherent risk of our business. Unplanned outages typically increase our operation and maintenance expenses and may reduce our revenues as a result of selling fewer MWh or require us to incur significant costs as a result of obtaining replacement power from third parties in the open market to satisfy our forward power sales obligations.

              Our inability to operate our electric generation assets efficiently, manage capital expenditures and costs and generate earnings and cash flow from our asset-based businesses could have a material adverse effect on our business, financial condition, results of operations and cash flows. While we maintain insurance, obtain warranties from vendors and obligate contractors to meet certain performance levels, the proceeds of such insurance, warranties or performance guarantees may not cover our lost revenues, increased expenses or liquidated damages payments should we experience equipment breakdown or non-performance by contractors or vendors.

              Power generation involves hazardous activities, including acquiring, transporting and unloading fuel, operating large pieces of rotating equipment and delivering electricity to transmission and distribution systems. In addition to natural risks such as earthquake, flood, lightning, hurricane and wind, other hazards, such as fire, explosion, structural collapse and machinery failure are inherent risks in our operations. These and other hazards can cause significant personal injury or loss of life, severe damage to and destruction of property, plant and equipment and contamination of, or damage to, the environment and suspension of operations. The occurrence of any one of these events may result in our being named as a defendant in lawsuits asserting claims for substantial damages, including for environmental cleanup costs, personal injury and property damage and fines and/or penalties. We maintain an amount of insurance protection that we consider adequate, but we cannot provide any assurance that our insurance will be sufficient or effective under all circumstances and against all hazards or liabilities to which we may be subject. Furthermore, our insurance coverage is subject to deductibles, caps, exclusions and other limitations. A loss for which we are not fully insured (which may include a significant judgment against any facility or facility operator) could have a material adverse effect on our business, financial condition, results of operations or cash flows. Further, due to rising insurance costs and changes in the insurance markets, we cannot provide any assurance that our insurance coverage will continue to be available at all or at rates or on terms similar to those presently available. Any losses not covered by insurance could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Maintenance, expansion and refurbishment of electric generation facilities involve significant risks that could result in unplanned power outages or reduced output.

              Our facilities may require periodic upgrading and improvement. Any unexpected operational or mechanical failure, including failure associated with breakdowns and forced outages, could reduce our

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facilities' generating capacity below expected levels, reducing our revenues and jeopardizing our ability to pay dividends to holders of our Class A common stock at expected levels or at all. Degradation of the performance of our solar facilities above levels provided for in the related offtake agreements may also reduce our revenues. Unanticipated capital expenditures associated with maintaining, upgrading or repairing our facilities may also reduce profitability.

              If we make any major modifications to our conventional power generation facilities, we may be required to install the best available control technology or to achieve the lowest achievable emission rates as such terms are defined under the new source review provisions of the U.S. federal Clean Air Act (the "CAA") in the future. Any such modifications could likely result in substantial additional capital expenditures. We may also choose to repower, refurbish or upgrade our facilities based on our assessment that such activity will provide adequate financial returns. Such facilities require time for development and capital expenditures before commencement of commercial operations, and key assumptions underpinning a decision to make such an investment may prove incorrect, including assumptions regarding construction costs, timing, available financing and future fuel and power prices. This could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Counterparties to our offtake agreements may not fulfill their obligations, and, as our contracts expire, we may not be able to replace them with agreements on similar terms in light of increasing competition in the markets in which we operate.

              A significant portion of the electric power we generate is sold under long-term offtake agreements with public utilities or industrial or commercial end-users, with a weighted average remaining duration of approximately 17 years (based on cash available for distribution) as of June 30, 2014. The largest customers of our power generation assets, including assets in which we have less than a 100% membership interest, were PG&E, CL&P and American Electric Power, representing 70%, 14% and 8%, respectively, of the net electric generation capacity of our facilities as of March 31, 2014.

              If, for any reason, any of the purchasers of power under these agreements are unable or unwilling to fulfill their related contractual obligations or if they refuse to accept delivery of power delivered thereunder or if they otherwise terminate such agreements prior to the expiration thereof, our assets, liabilities, business, financial condition, results of operations and cash flow could be materially and adversely affected. Furthermore, to the extent any of our power purchasers are, or are controlled by, governmental entities, our facilities may be subject to legislative or other political action that may impair their contractual performance.

              The power generation industry is characterized by intense competition and our electric generation assets encounter competition from utilities, industrial companies and other independent power producers, in particular with respect to uncontracted output. In recent years, there has been increasing competition among generators for offtake agreements, and this has contributed to a reduction in electricity prices in certain markets characterized by excess supply above designated reserve margins. In light of these market conditions, we may not be able to replace an expiring or terminated agreement with an agreement on equivalent terms and conditions, including at prices that permit operation of the related facility on a profitable basis. In addition, we believe many of our competitors have well-established relationships with our current and potential suppliers, lenders, customers and have extensive knowledge of our target markets. As a result, these competitors may be able to respond more quickly to evolving industry standards and changing customer requirements than we will be able to. Adoption of technology more advanced than ours could reduce our competitors' power production costs resulting in their having a lower cost structure than is achievable with the technologies we currently employ and adversely affect our ability to compete for offtake agreement renewals. If we are unable to replace an expiring or terminated offtake agreement, the affected facility may temporarily or permanently cease operations. External events, such as a severe economic

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downturn, could also impair the ability of some counterparties to our offtake agreements and other customer agreements to pay for energy and/or other products and services received.

              Our inability to enter into new or replacement offtake agreements or to compete successfully against current and future competitors in the markets in which we operate could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Certain of our thermal generation assets operate, wholly or partially, without long-term power sale agreements.

              The generation capacity of our Dover and Paxton thermal generation assets has been sold through May 2018 in the annual Base Residual Auction ("BRA") under the PJM-administered RPM. Capacity revenue beginning in June 2018 is not yet determined. These facilities do not have offtake agreements for energy sales and sell energy through NRG Power Marketing, an NRG affiliate, into the bid-based auction market for energy administered by PJM based on economic dispatch of their units. If we are unable to sell available capacity from those facilities beginning in June 2018 through the BRA or one of the other RPM capacity auctions or we are unable to enter into a offtake agreement or otherwise sell unallocated or unsold capacity at favorable terms, there may be a material adverse effect on our business, financial condition, results of operations and cash flows.

A portion of the steam and chilled water produced by our thermal assets is sold at regulated rates, and the revenue earned by our GenConn assets is established each year in a rate case; accordingly, the profitability of these assets is dependent on regulatory approval.

              Approximately 395 net MWt of capacity from certain of the our thermal assets are sold at rates approved by one or more federal or state regulatory commissions, including the Pennsylvania Public Utility Commission and the California Public Utilities Commission for the thermal assets. Similarly, the revenues related to approximately 380 MW of capacity from the GenConn assets are established each year by the Connecticut Public Utilities Regulatory Authority. While such regulatory oversight is generally premised on the recovery of prudently incurred costs and a reasonable rate of return on invested capital, the rates that we may charge, or the revenue that we may earn with respect to this capacity are subject to authorization of the applicable regulatory authorities. There can be no assurance that such regulatory authorities will consider all of the costs to have been prudently incurred or that the regulatory process by which rates or revenues are determined will always result in rates or revenues that achieve full recovery of costs or an adequate return on our capital investments. While our rates and revenues are generally established based on an analysis of costs incurred in a base year, the rates we are allowed to charge, and the revenues we are authorized to earn, may or may not match the costs at any given time. If our costs are not adequately recovered through these regulatory processes, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Supplier concentration at certain of our facilities may expose us to significant financial credit or performance risks.

              We often rely on a single contracted supplier or a small number of suppliers for the provision of fuel, transportation of fuel, equipment, technology and/or other services required for the operation of certain of our facilities. In addition, certain of our suppliers provide long-term warranties with respect to the performance of their products or services. If any of these suppliers cannot perform under their agreements with us, or satisfy their related warranty obligations, we will need to utilize the marketplace to provide or repair these products and services. There can be no assurance that the marketplace can provide these products and services as, when and where required. We may not be able to enter into replacement agreements on favorable terms or at all. If we are unable to enter into replacement agreements to provide for fuel, equipment, technology and other required services, we would seek to purchase the related goods or services at market prices, exposing us to market price volatility and the risk that fuel and transportation may not be available during certain periods at any price. We may also be required to make significant capital contributions to remove, replace or redesign

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equipment that cannot be supported or maintained by replacement suppliers, which could have a material adverse effect on our business, financial condition, results of operations, credit support terms and cash flows.

              In addition, potential or existing customers at our district energy centers and combined heat and power plants (the "Energy Centers") may opt for on-site systems in lieu of using our Energy Centers, either due to corporate policies regarding the allocation of capital, unique situations where an on-site system might in fact prove more efficient, because of previously committed capital in systems that are already on-site, or otherwise.

              The failure of any supplier to fulfill its contractual obligations to us or the loss of potential or existing customers could have a material adverse effect on our financial results. Consequently, the financial performance of our facilities is dependent on the credit quality of, and continued performance by, our suppliers and vendors and our ability to solicit and retain customers.

We currently own, and in the future may acquire, certain assets in which we have limited control over management decisions and our interests in such assets may be subject to transfer or other related restrictions.

              We have limited control over the operation of GenConn, Avenal and CVSR because we beneficially own 49.95%, 49.95% and 48.95%, respectively, of the membership interests in such assets. We may seek to acquire additional assets in which we own less than a majority of the related membership interests in the future. In these investments, we will seek to exert a degree of influence with respect to the management and operation of assets in which we own less than a majority of the membership interests by negotiating to obtain positions on management committees or to receive certain limited governance rights, such as rights to veto significant actions. However, we may not always succeed in such negotiations. We may be dependent on our co-venturers to operate such assets. Our co-venturers may not have the level of experience, technical expertise, human resources management and other attributes necessary to operate these assets optimally. In addition, conflicts of interest may arise in the future between our company and our stockholders, on the one hand, and our co-venturers, on the other hand, where our co-venturers' business interests are inconsistent with our interests and those of our stockholders. Further, disagreements or disputes between us and our co-venturers could result in litigation, which could increase our expenses and potentially limit the time and effort our officers and directors are able to devote to our business.

              The approval of co-venturers may also be required for us to receive distributions of funds from assets or to sell, pledge, transfer, assign or otherwise convey our interest in such assets, or for us to acquire NRG's interests in such co-ventures as an initial matter. Alternatively, our co-venturers may have rights of first refusal or rights of first offer in the event of a proposed sale or transfer of our interests in such assets. These restrictions may limit the price or interest level for our interests in such assets, in the event we want to sell such interests.

              Furthermore, certain of our facilities, including Alpine, Avra Valley, Blythe, Roadrunner, TA-High Desert and Kansas South are operated by third-party operators, such as First Solar. In addition, assuming completion of the Alta Acquisition, the Alta Wind Portfolio will be managed by third-party operators. To the extent that third-party operators do not fulfill their obligations to manage operations of the facilities or are not effective in doing so, the amount of our cash available for distribution may be adversely affected.

Our assets are exposed to risks inherent in our use of interest rate swaps and forward fuel purchase contracts and we may be exposed to additional risks in the future if we utilize other derivative instruments.

              We use interest rate swaps to manage interest rate risk. In addition, we use forward fuel purchase contracts to hedge our limited commodity exposure with respect to our district energy assets. If we elect to enter into such commodity hedges, the related asset could recognize financial losses on these arrangements as a result of volatility in the market values of the underlying commodities or if a

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counterparty fails to perform under a contract. If actively quoted market prices and pricing information from external sources are not available, the valuation of these contracts would involve judgment or the use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the reported fair value of these contracts. If the values of these financial contracts change in a manner that we do not anticipate, or if a counterparty fails to perform under a contract, it could harm our business, financial condition, results of operations and cash flows.

Our business is subject to restrictions resulting from environmental, health and safety laws and regulations.

              We are subject to various federal, state and local environmental and health and safety laws and regulations, and we may be held primarily or jointly and severally liable for costs relating to the investigation and clean-up of any property where there has been a release or threatened release of a hazardous regulated material as well as other affected properties, regardless of whether we knew of or caused the release. In addition to these costs, which are typically not limited by law or regulation and could exceed an affected property's value, we could be liable for certain other costs, including governmental fines and injuries to persons, property or natural resources. Further, some environmental laws provide for the creation of a lien on a contaminated site in favor of the government as security for damages and any costs the government incurs in connection with such contamination and associated clean-up. Although we generally require our operators to undertake to indemnify us for environmental liabilities they cause, the amount of such liabilities could exceed the financial ability of the operator to indemnify us. The presence of contamination or the failure to remediate contamination may adversely affect our ability to operate our business.

We do not own all of the land on which our power generation or thermal assets are located, which could result in disruption to our operations.

              We do not own all of the land on which our power generation or thermal assets are located, and we are, therefore, subject to the possibility of less desirable terms and increased costs to retain necessary land use if we do not have valid leases or rights-of-way or if such rights-of-way lapse or terminate. Although we have obtained rights to construct and operate these assets pursuant to related lease arrangements, our rights to conduct those activities are subject to certain exceptions, including the term of the lease arrangement. Our loss of these rights, through our inability to renew right-of-way contracts or otherwise, may adversely affect our ability to operate our generation and thermal infrastructure assets.

Our electric generation business is subject to substantial governmental regulation and may be adversely affected by changes in laws or regulations, as well as liability under, or any future inability to comply with, existing or future regulations or other legal requirements.

              Our electric generation business is subject to extensive U.S. federal, state and local laws and regulation. Compliance with the requirements under these various regulatory regimes may cause us to incur significant additional costs, and failure to comply with such requirements could result in the shutdown of the non-complying facility, the imposition of liens, fines, and/or civil or criminal liability.

              Public utilities under the FPA are required to obtain FERC acceptance of their rate schedules for wholesale sales of electric energy, capacity and ancillary services. Except for generating facilities within the footprint of the Electric Reliability Council of Texas ("ERCOT"), which are regulated by the Public Utility Commission of Texas (the "PUCT"), all of our assets make wholesale sales of electric energy, capacity and ancillary services in interstate commerce and are public utilities for purposes of the FPA, unless otherwise exempt from such status (see below). FERC's orders that grant such wholesale sellers market-based rate authority reserve the right to revoke or revise that authority if FERC subsequently determines that the seller can exercise market power in transmission or generation, create barriers to entry or engage in abusive affiliate transactions. In addition, public utilities are

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subject to FERC reporting requirements that impose administrative burdens and that, if violated, can expose the Company to criminal and civil penalties or other risks.

              Our market-based sales are subject to certain market behavior rules, and if any of our generating companies are deemed to have violated those rules, they will be subject to potential disgorgement of profits associated with the violation, penalties, suspension or revocation of market-based rate authority. If such generating companies were to lose their market-based rate authority, such companies would be required to obtain FERC's acceptance of a cost-of-service rate schedule and could become subject to the significant accounting, record-keeping and reporting requirements that are imposed on utilities with cost-based rate schedules. This could have a material adverse effect on the rates we are able to charge for power from our facilities.

              Most of our assets are operating as "Exempt Wholesale Generators," as defined under the Public Utility Holding Company Act of 2005 ("PUHCA"), or "Qualifying Facilities," as defined under the Public Utility Regulatory Policies Act of 1978, as amended, and therefore are exempt from certain regulation under PUHCA. If a facility fails to maintain its status as an Exempt Wholesale Generator or a Qualifying Facility or there are legislative or regulatory changes revoking or limiting the exemptions to PUHCA, then we may be subject to significant accounting, record-keeping, access to books and records and reporting requirements and failure to comply with such requirements could result in the imposition of penalties and additional compliance obligations.

              Substantially all of our generation assets are also subject to the reliability standards of the North American Electric Reliability Corporation ("NERC"). If we fail to comply with the mandatory reliability standards, we could be subject to sanctions, including substantial monetary penalties and increased compliance obligations.

              We are also affected by legislative and regulatory changes, as well as changes to market design, market rules, tariffs, cost allocations, and bidding rules that occur in the existing regional markets operated by Regional Transmission Organizations ("RTOs") or Independent System Operators ("ISOs"), such as PJM. The RTOs/ISOs that oversee most of the wholesale power markets impose, and in the future may continue to impose, mitigation, including price limitations, offer caps and other mechanisms to address some of the volatility and the potential exercise of market power in these markets. These types of price limitations and other regulatory mechanisms may have a material adverse effect on the profitability of our generation facilities acquired in the future that sell energy, capacity and ancillary products into the wholesale power markets.

              The regulatory environment for electric generation has undergone significant changes in the last several years due to state and federal policies affecting wholesale competition and the creation of incentives for the addition of large amounts of new renewable generation and, in some cases, transmission assets. These changes are ongoing, and we cannot predict the future design of the wholesale power markets or the ultimate effect that the changing regulatory environment will have on our business. In addition, in some of these markets, interested parties have proposed material market design changes and to re-regulate the markets or require divestiture of electric generation assets by asset owners or operators to reduce their market share. Other proposals to re-regulate may be made and legislative or other attention to the electric power market restructuring process may delay or reverse the deregulation process. If competitive restructuring of the electric power markets is reversed, discontinued or delayed, our business prospects and financial results could be negatively impacted.

We are subject to environmental laws and regulations that impose extensive and increasingly stringent requirements on our operations, as well as potentially substantial liabilities arising out of environmental contamination.

              Our assets are subject to numerous and significant federal, state and local laws, including statutes, regulations, guidelines, policies, directives and other requirements governing or relating to, among other things: protection of wildlife, including threatened and endangered species; air emissions;

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discharges into water; water use; the storage, handling, use, transportation and distribution of dangerous goods and hazardous, residual and other regulated materials, such as chemicals; the prevention of releases of hazardous materials into the environment; the prevention, presence and remediation of hazardous materials in soil and groundwater, both on and offsite; land use and zoning matters; and workers' health and safety matters. Our facilities could experience incidents, malfunctions and other unplanned events that could result in spills or emissions in excess of permitted levels and result in personal injury, penalties and property damage. As such, the operation of our facilities carries an inherent risk of environmental, health and safety liabilities (including potential civil actions, compliance or remediation orders, fines and other penalties) and may result in the assets being involved from time to time in administrative and judicial proceedings relating to such matters. We have implemented environmental, health and safety management programs designed to continually improve environmental, health and safety performance.

              Environmental laws and regulations have generally become more stringent over time, and we expect this trend to continue. Significant costs may be incurred for capital expenditures under environmental programs to keep the assets compliant with such environmental laws and regulations. If it is not economical to make those expenditures, it may be necessary to retire or mothball facilities or restrict or modify our operations to comply with more stringent standards. These environmental requirements and liabilities could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Risks that are beyond our control, including but not limited to acts of terrorism or related acts of war, natural disaster, hostile cyber intrusions or other catastrophic events, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

              Our generation facilities that have been acquired or those that we otherwise acquire or construct and the facilities of third parties on which they rely may be targets of terrorist activities, as well as events occurring in response to or in connection with them, that could cause environmental repercussions and/or result in full or partial disruption of the facilities ability to generate, transmit, transport or distribute electricity or natural gas. Strategic targets, such as energy-related facilities, may be at greater risk of future terrorist activities than other domestic targets. Hostile cyber intrusions, including those targeting information systems as well as electronic control systems used at the generating plants and for the related distribution systems, could severely disrupt business operations and result in loss of service to customers, as well as create significant expense to repair security breaches or system damage.

              Furthermore, certain of our power generation thermal assets are located in active earthquake zones in California and Arizona, and certain of our project companies and suppliers conduct their operations in the same region or in other locations that are susceptible to natural disasters. In addition, California and some of the locations where certain of our suppliers are located, from time to time, have experienced shortages of water, electric power and natural gas. The occurrence of a natural disaster, such as an earthquake, drought, flood or localized extended outages of critical utilities or transportation systems or any critical resource shortages, affecting us or our suppliers, could cause a significant interruption in our business, damage or destroy our facilities or those of our suppliers or the manufacturing equipment or inventory of our suppliers.

              Any such terrorist acts, environmental repercussions or disruptions or natural disasters could result in a significant decrease in revenues or significant reconstruction or remediation costs, beyond what could be recovered through insurance policies, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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Government regulations providing incentives for renewable generation could change at any time and such changes may negatively impact our growth strategy.

              Our growth strategy depends in part on government policies that support renewable generation and enhance the economic viability of owning renewable electric generation assets. Renewable generation assets currently benefit from various federal, state and local governmental incentives such as ITCs, cash grants in lieu of ITCs, loan guarantees, RPS programs, modified accelerated cost-recovery system of depreciation and bonus depreciation. For example, the U.S. Internal Revenue Code of 1986, as amended (the "Code") provides an ITC of 30% of the cost-basis of an eligible resource, including solar energy facilities placed in service prior to the end of 2016, which percentage is currently scheduled to be reduced to 10% for solar energy systems placed in service after December 31, 2016.

              Many states have adopted RPS programs mandating that a specified percentage of electricity sales come from eligible sources of renewable energy. However, the regulations that govern the RPS programs, including pricing incentives for renewable energy, or reasonableness guidelines for pricing that increase valuation compared to conventional power (such as a projected value for carbon reduction or consideration of avoided integration costs), may change. If the RPS requirements are reduced or eliminated, it could lead to fewer future power contracts or lead to lower prices for the sale of power in future power contracts, which could have a material adverse effect on our future growth prospects. Such material adverse effects may result from decreased revenues, reduced economic returns on certain project company investments, increased financing costs, and/or difficulty obtaining financing. Furthermore, the American Recovery and Reinvestment Act of 2009 ("ARRA") included incentives to encourage investment in the renewable energy sector, such as cash grants in lieu of ITCs, bonus depreciation and expansion of the DOE loan guarantee program. It is uncertain what loan guarantees may be made by the DOE loan guarantee program in the future. In addition, the cash grant in lieu of ITCs program only applies to facilities that commenced construction prior to December 31, 2011, which commencement date may be determined in accordance with the safe harbor if more than 5% of the total cost of the eligible property was paid or incurred by December 31, 2011.

              If we are unable to utilize various federal, state and local government incentives to acquire additional renewable assets in the future, or the terms of such incentives are revised in a manner that is less favorable to us, we may suffer a material adverse effect on our business, financial condition, results of operations and cash flows.

We rely on electric interconnection and transmission facilities that we do not own or control and that are subject to transmission constraints within a number of our regions. If these facilities fail to provide us with adequate transmission capacity, we may be restricted in our ability to deliver electric power to our customers and we may either incur additional costs or forego revenues.

              We depend on electric interconnection and transmission facilities owned and operated by others to deliver the wholesale power we sell from our electric generation assets to our customers. A failure or delay in the operation or development of these interconnection or transmission facilities or a significant increase in the cost of the development of such facilities could result in our losing revenues. Such failures or delays could limit the amount of power our operating facilities deliver or delay the completion of our construction projects. Additionally, such failures, delays or increased costs could have a material adverse effect on our business, financial condition and results of operations. If a region's power transmission infrastructure is inadequate, our recovery of wholesale costs and profits may be limited. If restrictive transmission price regulation is imposed, the transmission companies may not have a sufficient incentive to invest in expansion of transmission infrastructure. We cannot also predict whether interconnection and transmission facilities will be expanded in specific markets to accommodate competitive access to those markets. In addition, certain of our operating facilities' generation of electricity may be curtailed without compensation due to transmission limitations or limitations on the electricity grid's ability to accommodate intermittent electricity generating sources,

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reducing our revenues and impairing our ability to capitalize fully on a particular facility's generating potential. Such curtailments could have a material adverse effect on our business, financial condition, results of operations and cash flows. Furthermore, economic congestion on transmission networks in certain of the markets in which we operate may occur and we may be deemed responsible for congestion costs. If we were liable for such congestion costs, our financial results could be adversely affected.

Our costs, results of operations, financial condition and cash flows could be adversely impacted by the disruption of the fuel supplies necessary to generate power at our conventional and thermal power generation facilities.

              Delivery of fossil fuels to fuel our conventional and thermal generation facilities is dependent upon the infrastructure (including natural gas pipelines) available to serve each such generation facility as well as upon the continuing financial viability of contractual counterparties. As a result, we are subject to the risks of disruptions or curtailments in the production of power at these generation facilities if a counterparty fails to perform or if there is a disruption in the fuel delivery infrastructure.

Risks Related to Our Relationship with NRG

NRG is our controlling stockholder and will exercise substantial influence over us and we are highly dependent on NRG.

              NRG will continue to beneficially own all of our outstanding Class B common stock upon completion of this offering. Each share of our outstanding Class B common stock is entitled to one vote per share. As a result of its ownership of our Class B common stock, NRG will possess approximately 56.4% (or approximately 55.3% if the underwriters exercise in full their option to purchase additional shares of Class A common stock) of the combined voting power of our Class A and Class B common stock outstanding upon completion of this offering. As a result of this ownership, NRG will continue to have a substantial influence on our affairs and its voting power will constitute a large percentage of any quorum of our stockholders voting on any matter requiring the approval of our stockholders. Such matters include the election of directors, the adoption of amendments to our amended and restated certificate of incorporation and bylaws and approval of mergers or sale of all or substantially all of our assets. This concentration of ownership may also have the effect of delaying or preventing a change in control of our company or discouraging others from making tender offers for our shares, which could prevent stockholders from receiving a premium for their shares. NRG may cause corporate actions to be taken even if their interests conflict with the interests of our other stockholders (including holders of our Class A common stock). See "Certain Relationships and Related Party Transactions—Procedures for Review, Approval and Ratification of Related-Person Transactions."

              Furthermore, we depend on the management and administration services provided by or under the direction of NRG under the Management Services Agreement. NRG personnel and support staff that provide services to us under the Management Services Agreement are not required to, and we do not expect that they will, have as their primary responsibility the management and administration of Yield or to act exclusively for us and the Management Services Agreement does not require any specific individuals to be provided by NRG. Under the Management Services Agreement, NRG has the discretion to determine which of its employees perform assignments required to be provided to us. Any failure to effectively manage our operations or to implement our strategy could have a material adverse effect on our business, financial condition, results of operations and cash flows. The Management Services Agreement has a perpetual duration, until terminated in accordance with its provisions.

              We also depend upon NRG for the provision of management and administration services at all of our facilities. Any failure by NRG to perform its requirements under these arrangements or the failure by us to identify and contract with replacement service providers, if required, could adversely

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affect the operation of our facilities and have a material adverse effect on our business, financial condition, results of operations and cash flows.

We may not be able to consummate future acquisitions from NRG.

              Our ability to grow through acquisitions depends, in part, on NRG's ability to identify and present us with acquisition opportunities. NRG established our company to hold and acquire a diversified suite of power generating assets in the United States. Although NRG has agreed to grant us a right of first offer with respect to certain power generation assets that NRG may elect to sell in the future (as described in "Certain Relationships and Related Party Transactions—Right of First Offer"), NRG is under no obligation to sell the ROFO Assets or the EME-NYLD-Eligible Assets or to accept any related offer from us. Furthermore, NRG has no obligation to source acquisition opportunities specifically for us. In addition, NRG has not agreed to commit to us any minimum level of dedicated resources for the pursuit of renewable power-related acquisitions. There are a number of factors which could materially and adversely impact the extent to which suitable acquisition opportunities are made available from NRG, including:

              In making these determinations, NRG may be influenced by factors that result in a misalignment or conflict of interest. See "Risks Related to Our Business—We may not be able to effectively identify or consummate any future acquisitions on favorable terms, or at all" for a description of risks associated with the identifying, evaluating and consummating acquisitions generally, including acquisitions of ROFO Assets.

The departure of some or all of NRG's employees could prevent us from achieving our objectives.

              We depend on the diligence, skill and business contacts of NRG's professionals and the information and opportunities they generate during the normal course of their activities. Furthermore, approximately 35% of NRG's employees at our generation plants were covered by collective bargaining agreements as of March 31, 2014.

              Our future success depends on the continued service of these individuals, who are not obligated to remain employed with NRG, or otherwise successfully renegotiate their collective bargaining agreements when such agreements expire or otherwise terminate. NRG has experienced departures of key professionals and personnel in the past and may do so in the future, and we cannot predict the impact that any such departures will have on our ability to achieve our objectives. The departure of a significant number of NRG's professionals or a material portion of the NRG employees who work at any of our facilities for any reason, or the failure to appoint qualified or effective successors in the event of such departures, could have a material adverse effect on our ability to achieve our objectives. The Management Services Agreement does not require NRG to maintain the employment of any of its professionals or to cause any particular professional to provide services to us or on our behalf.

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Our organizational and ownership structure may create significant conflicts of interest that may be resolved in a manner that is not in the best interests of Yield Inc. or the best interests of holders of our Class A common stock and that may have a material adverse effect on our business, financial condition, results of operations and cash flows.

              Our organizational and ownership structure involves a number of relationships that may give rise to certain conflicts of interest between Yield Inc. and holders of our Class A common stock, on the one hand, and NRG, on the other hand. We have entered into a Management Services Agreement with NRG. Each of our executive officers is a shared NRG executive and devote his or her time to both our company and NRG as needed to conduct the respective businesses pursuant to the Management Services Agreement. Although our directors and executive officers owe fiduciary duties to our stockholders, these shared NRG executives have fiduciary and other duties to NRG, which duties may be inconsistent with the best interests of us and holders of our Class A common stock. In addition, NRG and its representatives, agents and affiliates have access to our confidential information. Although some of these persons are subject to confidentiality obligations pursuant to confidentiality agreements or implied duties of confidence, the Management Services Agreement does not contain general confidentiality provisions.

              Additionally, all of our executive officers continue to have economic interests in NRG and, accordingly, the benefit to NRG from a transaction between us and NRG will proportionately inure to their benefit as holders of economic interests in NRG. NRG is a related party under the applicable securities laws governing related party transactions and may have interests which differ from our interests or those of holders of our Class A common stock, including with respect to the types of acquisitions made, the timing and amount of dividends by Yield Inc., the reinvestment of returns generated by our operations, the use of leverage when making acquisitions and the appointment of outside advisors and service providers. Any material transaction between us and NRG (including the proposed acquisition of any ROFO Asset) will be subject to our related party transaction policy, which requires prior approval of such transaction by our corporate committees. Those of our executive officers who have economic interests in NRG may be conflicted when advising our corporate committees or otherwise participating in the negotiation or approval of such transactions. These executive officers have significant project-and industry-specific expertise that could prove beneficial to our Corporate Governance, Conflicts and Nominating Committee's decision-making process and the absence of such strategic guidance could have a material adverse effect on the corporate committees' ability evaluate any such transaction. Furthermore, the creation of our corporate committees and our related party transaction approval policy may not insulate us from derivative claims related to related party transactions and the conflicts of interest described in this risk factor. Regardless of the merits of such claims, we may be required to expend significant management time and financial resources in the defense thereof. Additionally, to the extent we fail to appropriately deal with any such conflicts, it could negatively impact our reputation and ability to raise additional funds and the willingness of counterparties to do business with us, all of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We may be unable or unwilling to terminate the Management Services Agreement.

              The Management Services Agreement provides that we may terminate the agreement upon 30 days prior written notice to NRG upon the occurrence of any of the following: (i) NRG defaults in the performance or observance of any material term, condition or covenant contained therein in a manner that results in material harm to us and the default continues unremedied for a period of 30 days after written notice thereof is given to NRG; (ii) NRG engages in any act of fraud, misappropriation of funds or embezzlement that results in material harm to us; (iii) NRG is grossly negligent in the performance of its duties under the agreement and such negligence results in material harm to us; or (iv) upon the happening of certain events relating to the bankruptcy or insolvency of

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NRG. Furthermore, if we request an amendment to the scope of services provided by NRG under the Management Services Agreement and we are not able to agree with NRG as to a change to the service fee resulting from a change in the scope of services within 180 days of the request, we may terminate the agreement upon 30 days prior notice to NRG.

              We are able to terminate the agreement for any other reason, including if NRG experiences a change of control, and the agreement continues in perpetuity, until terminated in accordance with its terms. If NRG's performance does not meet the expectations of investors, and we are unable to terminate the Management Services Agreement, the market price of our Class A common stock could suffer.

If NRG terminates the Management Services Agreement or defaults in the performance of its obligations under the agreement we may be unable to contract with a substitute service provider on similar terms, or at all.

              We rely on NRG to provide us with management services under the Management Services Agreement and do not have independent executive or senior management personnel. The Management Services Agreement provides that NRG may terminate the agreement upon 180 days prior written notice of termination to us if we default in the performance or observance of any material term, condition or covenant contained in the agreement in a manner that results in material harm and the default continues unremedied for a period of 30 days after written notice of the breach is given to us. If NRG terminates the Management Services Agreement or defaults in the performance of its obligations under the agreement, we may be unable to contract with a substitute service provider on similar terms or at all, and the costs of substituting service providers may be substantial. In addition, in light of NRG's familiarity with our assets, a substitute service provider may not be able to provide the same level of service due to lack of pre-existing synergies. If we cannot locate a service provider that is able to provide us with substantially similar services as NRG does under the Management Services Agreement on similar terms, it would likely have a material adverse effect on our business, financial condition, results of operation and cash flows.

The liability of NRG is limited under our arrangements with it and we have agreed to indemnify NRG against claims that it may face in connection with such arrangements, which may lead it to assume greater risks when making decisions relating to us than it otherwise would if acting solely for its own account.

              Under the Management Services Agreement, NRG does not assume any responsibility other than to provide or arrange for the provision of the services described in the Management Services Agreement in good faith. In addition, under the Management Services Agreement, the liability of NRG and its affiliates is limited to the fullest extent permitted by law to conduct involving bad faith, fraud, willful misconduct or gross negligence or, in the case of a criminal matter, action that was known to have been unlawful. In addition, we have agreed to indemnify NRG to the fullest extent permitted by law from and against any claims, liabilities, losses, damages, costs or expenses incurred by an indemnified person or threatened in connection with our operations, investments and activities or in respect of or arising from the Management Services Agreement or the services provided by NRG, except to the extent that the claims, liabilities, losses, damages, costs or expenses are determined to have resulted from the conduct in respect of which such persons have liability as described above. These protections may result in NRG tolerating greater risks when making decisions than otherwise would be the case, including when determining whether to use leverage in connection with acquisitions. The indemnification arrangements to which NRG is a party may also give rise to legal claims for indemnification that are adverse to Yield Inc. and holders of our Class A common stock.

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Risks Related to the Alta Acquisition

There can be no assurance that the Alta Acquisition will be consummated on the terms or timetable currently anticipated or at all, and the closing of this offering is not conditioned on the consummation of the Alta Acquisition.

              Although we expect the Alta Acquisition to close during the third quarter of 2014, there can be no assurance that the Alta Acquisition will be consummated on the terms or timetable currently anticipated or at all. In order to consummate the Alta Acquisition, we must obtain certain regulatory and other approvals and consents in a timely manner. If these approvals or consents are not received, or they are not received on terms that satisfy the conditions set forth in the Alta Purchase and Sale Agreement, then we and/or the applicable seller will not be obligated to complete the Alta Acquisition. Also, we may not receive these approvals or consents in respect of the Alta Acquisition before the currently anticipated timing for closing such acquisition (as described above). For example, approval of the Alta Acquisition is subject to regulatory approval by FERC and the U.S. Department of Justice and the Federal Trade Commission under the Hart-Scott-Rodino Act. The Alta Purchase and Sale Agreement also contains customary and other closing conditions. In addition, under circumstances specified in the Alta Purchase and Sale Agreement, we or the seller may terminate the purchase and sale agreements.

              The closing of this offering is not conditioned upon the consummation of the Alta Acquisition. Therefore, upon the closing of this offering, you will become a holder of our Class A common stock irrespective of whether the Alta Acquisition is consummated or delayed. If the Alta Acquisition is not completed, our Class A common stock that you have purchased in this offering will not reflect any interest in the Alta Wind Portfolio, and if the acquisition is delayed, this interest will not be reflected during the period of delay. Also, the price of our Class A common stock may decline to the extent that the current market price of our Class A common stock reflects a market assumption that the Alta Acquisition will be consummated and that we will realize certain anticipated benefits of the acquisition. The occurrence of any of these events individually or in combination could have a material adverse effect on our business, financial condition and results of operations.

Because the historical and pro forma financial information included elsewhere in this prospectus may not be representative of our results as a combined company after the completion of the Alta Acquisition and consummation of the related financing, you have limited financial information on which to evaluate us and your investment decision.

              Preparing the pro forma financial information contained in this prospectus involved making several assumptions. These assumptions may prove inaccurate. Therefore, the historical financial statements and pro forma financial statements presented in this prospectus supplement may not reflect what our results of operations, financial position and cash flows would have been had we operated on a combined basis and may not be indicative of what our results of operations, financial position and cash flows will be in the future. As a result, the historical and pro forma financial information included elsewhere in this prospectus supplement is of limited relevance to an investor in this offering. See "Pro Forma Financial Statements" and "Risk Factors—Risks Related to the Alta Acquisition—If completed, the Alta Acquisition may not achieve its intended results, and we may be unable to successfully integrate the assets and operations acquired."

If completed, the Alta Acquisition may not achieve its intended results, and we may be unable to successfully integrate the assets and operations acquired.

              We entered into the Alta Acquisition with the expectation that it will result in various benefits. Achieving the anticipated benefits of the Alta Acquisition is subject to a number of uncertainties, including whether the assets acquired can be integrated in an efficient and effective manner.

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              It is possible that the integration process could take longer than anticipated and could result in the disruption of each company's ongoing businesses, processes and systems or inconsistencies in standards, controls, procedures, practices, policies and compensation arrangements, any of which could adversely affect our ability to achieve the anticipated benefits of the acquisition. The integration process is subject to a number of uncertainties, and no assurance can be given that the anticipated benefits will be realized or, if realized, the timing of their realization. Failure to achieve these anticipated benefits could result in increased costs or decreases in the amount of expected revenues and could adversely affect the combined company's future business, financial condition, operating results and prospects.

Risks Inherent in an Investment in Us

We may not be able to continue paying comparable or growing cash dividends to our holders of our Class A common stock in the future.

              The amount of our cash available for distribution principally depends upon the amount of cash we generate from our operations, which will fluctuate from quarter to quarter based on, among other things:

              As a result of all these factors, we cannot guarantee that we will have sufficient cash generated from operations to pay a specific level of cash dividends to holders of our Class A common stock. Furthermore, holders of our Class A common stock should be aware that the amount of cash available for distribution depends primarily on our cash flow, and is not solely a function of profitability, which is affected by non-cash items. We may incur other expenses or liabilities during a period that could significantly reduce or eliminate our cash available for distribution and, in turn, impair our ability to pay dividends to holders of our Class A common stock during the period. Because we are a holding company, our ability to pay dividends on our Class A common stock is limited by restrictions on the ability of our subsidiaries to pay dividends or make other distributions to us, including restrictions under the terms of the agreements governing project-level financing. Our project-level financing agreements generally prohibit distributions from the project entities prior to COD and thereafter prohibit distributions to us unless certain specific conditions are met, including the satisfaction of financial ratios. Our Amended and Restated Credit Agreement also restricts our ability to declare and pay dividends if an event of default has occurred and is continuing or if the payment of the dividend would result in an event of default.

              Yield LLC's cash available for distribution will likely fluctuate from quarter to quarter, in some cases significantly, due to seasonality. As result, we may cause Yield LLC to reduce the amount of cash

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it distributes to its members in a particular quarter to establish reserves to fund distributions to its members in future periods for which the cash distributions we would otherwise receive from Yield LLC would otherwise be insufficient to fund our quarterly dividend. If we fail to cause Yield LLC to establish sufficient reserves, we may not be able to maintain our quarterly dividend with a respect to a quarter adversely affected by seasonality.

              Finally, dividends to holders of our Class A common stock are paid at the discretion of our board of directors. Our board of directors may decrease the level of or entirely discontinue payment of dividends. For a description of additional restrictions and factors that may affect our ability to pay cash dividends, please read "Cash Dividend Policy."

We are a holding company and our only material asset is our interest in Yield LLC, and we are accordingly dependent upon distributions from NRG Yield LLC and its subsidiaries to pay dividends and taxes and other expenses.

              Yield Inc. is a holding company and has no material assets other than its ownership of membership interests in Yield LLC, a holding company that has no material assets other than its interest in Yield Operating LLC, whose sole material assets are the project companies. None of Yield Inc., nor Yield LLC, nor Yield Operating LLC has any independent means of generating revenue. We intend to cause Yield Operating LLC's subsidiaries to make distributions to Yield Operating LLC and, in turn, make distributions to Yield LLC, and, in turn, to make distributions to Yield Inc. in an amount sufficient to cover all applicable taxes payable and dividends, if any, declared by us. To the extent that we need funds for a quarterly cash dividend to holders of our Class A common stock or otherwise, and Yield Operating LLC or Yield LLC is restricted from making such distributions under applicable law or regulation or is otherwise unable to provide such funds (including as a result of Yield Operating LLC's operating subsidiaries being unable to make distributions), it could materially adversely affect our liquidity and financial condition and limit our ability to pay dividends to holders of our Class A common stock.

We have a limited operating history and as a result there is no assurance we can operate on a profitable basis.

              We have a limited operating history on which to base an evaluation of our business and prospects. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stages of operation. We cannot assure you that we will be successful in addressing the risks we may encounter, and our failure to do so could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Market interest rates may have an effect on the value of our Class A common stock.

              One of the factors that influences the price of shares of our Class A common stock is the effective dividend yield of such shares (i.e., the yield as a percentage of the then market price of our shares) relative to market interest rates. An increase in market interest rates, which are currently at low levels relative to historical rates, may lead prospective purchasers of shares of our Class A common stock to expect a higher dividend yield and, our inability to increase our dividend as a result of an increase in borrowing costs, insufficient cash available for distribution or otherwise, could result in selling pressure on, and a decrease in the market price of our Class A common stock as investors seek alternative investments with higher yield.

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If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete strategic acquisitions or effect combinations.

              If we are deemed to be an investment company under the Investment Company Act of 1940 (the "Investment Company Act"), our business would be subject to applicable restrictions under the Investment Company Act, which could make it impracticable for us to continue our business as contemplated.

              We believe our company is not an investment company under Section 3(b)(1) of the Investment Company Act because we are primarily engaged in a non-investment company business. We intend to conduct our operations so that we will not be deemed an investment company. However, if we were to be deemed an investment company, restrictions imposed by the Investment Company Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated.

Market volatility may affect the price of our Class A common stock and the value of your investment.

              The market price of our Class A common stock may fluctuate significantly in response to a number of factors, most of which we cannot predict or control, including general market and economic conditions, disruptions, downgrades, credit events and perceived problems in the credit markets; actual or anticipated variations in our quarterly operating results or dividends; changes in our investments or asset composition; write-downs or perceived credit or liquidity issues affecting our assets; market perception of NRG, our business and our assets; our level of indebtedness and/or adverse market reaction to any indebtedness we incur in the future; our ability to raise capital on favorable terms or at all; loss of any major funding source; the termination of the Management Services Agreement or additions or departures of NRG's key personnel; changes in market valuations of similar power generation companies; and speculation in the press or investment community regarding us or NRG.

              Securities markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. Any broad market fluctuations may adversely affect the trading price of our Class A common stock.

We are a "controlled company," controlled by NRG, whose interest in our business may be different the holders of our Class A common stock.

              After consummation of this offering, NRG will control approximately 56.4% of our combined voting power and be able to elect all of our board of directors. As a result, we will be considered a "controlled company" for the purposes of the NYSE listing requirements. As a "controlled company," we are permitted to, and we may opt out of the NYSE listing requirements that would require (i) a majority of the members of our board of directors to be independent, (ii) that we establish a compensation committee and a nominating and governance committee, each comprised entirely of independent directors, or (iii) that the compensation of our executive officers and nominees for directors are determined or recommended to our board of directors by the independent members of our board of directors. The NYSE listing requirements are intended to ensure that directors who meet the independence standard are free of any conflicting interest that could influence their actions as directors. As further described above in "—Risks Related to Our Relationship with NRG," it is possible that the interests of NRG may in some circumstances conflict with our interests and the interests of holders of our Class A common stock.

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Provisions of our charter documents or Delaware law could delay or prevent an acquisition of us, even if the acquisition would be beneficial to holders of our Class A common stock, and could make it more difficult for you to change management.

              Provisions of our amended and restated certificate of incorporation and bylaws may discourage, delay or prevent a merger, acquisition or other change in control that holders of our Class A common stock may consider favorable, including transactions in which such stockholders might otherwise receive a premium for their shares. This is because these provisions may prevent or frustrate attempts by stockholders to replace or remove members of our management. These provisions include:

              Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person that together with its affiliates owns or within the last three years has owned 15% of voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. As a result of these provisions in our charter documents, the price investors may be willing to pay in the future for shares of our Class A common stock may be limited. See "Description of Capital Stock—Antitakeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws."

              Additionally, our amended and restated certificate of incorporation, prohibits any person and any of its associate or affiliate companies in the aggregate, "public utility" (as defined in the FPA) or "holding company" (as defined in the PUHCA) from acquiring, through this offering or in subsequent purchases other than secondary market transactions, an amount of our Class A common stock sufficient to result in a transfer of control without the prior written consent of our board of directors. See "Notice to Investors." While we do not anticipate that this offering will result in a transfer of control over any public utility owned by us, any such change of control, in addition to prior approval from our board of directors, would require prior authorization from FERC. Similar restrictions may apply to certain purchasers of our securities which are "holding companies" under PUHCA regardless of whether our securities are purchased in this offering, subsequent offerings by us or NRG, in open market transactions or otherwise. A purchaser of our securities which is a holding company will need to determine whether a given purchase of our securities may require prior FERC approval.

You may experience dilution of your ownership interest due to the future issuance of additional shares of our Class A common stock.

              We are in a capital intensive business, and may not have sufficient funds to finance the growth of our business, future acquisitions or to support our projected capital expenditures. As a result, we may require additional funds from further equity or debt financings, including tax equity financing transactions or sales of preferred shares or convertible debt to complete future acquisitions, expansions and capital expenditures and pay the general and administrative costs of our business. In the future, we may issue our previously authorized and unissued securities, resulting in the dilution of the ownership interests of purchasers of our Class A common stock offered hereby. Under our amended and restated certificate of incorporation, we are authorized to issue 500,000,000 shares of Class A common stock, 500,000,000 shares of Class B common stock and 10,000,000 shares of preferred stock with preferences and rights as determined by our board of directors. The potential issuance of additional shares of

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common stock or preferred stock or convertible debt may create downward pressure on the trading price of our Class A common stock. We may also issue additional shares of our Class A common stock or other securities that are convertible into or exercisable for our Class A common stock in future public offerings or private placements for capital raising purposes or for other business purposes, potentially at an offering price, conversion price or exercise price that is below the offering price for our Class A common stock in this offering.

If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our Class A common stock adversely, the stock price and trading volume of our Class A common stock could decline.

              The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our Class A common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Class A common stock would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the stock price or trading volume of our Class A common stock to decline.

Future sales of our common stock by NRG may cause the price of our Class A common stock to fall.

              The market price of our Class A common stock could decline as a result of sales by NRG of such shares (issuable to NRG upon the exchange of some or all of its Yield LLC Class B units) in the market, or the perception that these sales could occur. The market price of our Class A common stock may also decline as a result of NRG disposing or transferring some or all of our outstanding Class B common stock, which disposals or transfers would reduce NRG's ownership interest in, and voting control over, us. These sales might also make it more difficult for us to sell equity securities at a time and price that we deem appropriate.

              NRG and certain of its affiliates have certain demand and piggyback registration rights with respect to shares of our Class A common stock issuable upon the exchange of Yield LLC's Class B units. The presence of additional shares of our Class A common stock trading in the public market, as a result of the exercise of such registration rights may have a material adverse effect on the market price of our securities. See "Certain Relationships and Related Party Transactions—Registration Rights Agreement."

We are an "emerging growth company" and may elect to comply with reduced public company reporting requirements, which could make our Class A common stock less attractive to investors.

              We are an "emerging growth company," as defined by the JOBS Act. For as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various public company reporting requirements. These exemptions include, but are not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements, and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years after the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act, or July 22, 2018. However, if certain events occur prior to the end of such period, including if we become a "large accelerated filer," our annual gross revenues exceed $1.0 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we would cease to be an emerging growth company prior to the end of such

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five-year period. We have taken advantage of certain of the reduced disclosure obligations regarding executive compensation in this prospectus and may elect to take advantage of other reduced burdens in future filings. As a result, the information that we provide to holders of our Class A common stock may be different than you might receive from other public reporting companies in which you hold equity interests. We cannot predict if investors will find our Class A common stock less attractive as a result of our reliance on these exemptions. If some investors find our Class A common stock less attractive as a result of any choice we make to reduce disclosure, there may be a less active trading market for our Class A common stock and the price for our Class A common stock may be more volatile.

              Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. However, we have irrevocably elected not to avail ourselves of this extended transition period for complying with new or revised accounting standards and, therefore, we are subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Risks Related to Taxation

              In addition to reading the following risk factors, if you are a non-U.S. investor, please read "Material U.S. Federal Income Tax Consequences to Non-U.S. Holders" for a more complete discussion of the expected material federal income tax consequences of owning and disposing of shares of our Class A common stock.

Our future tax liability may be greater than expected if we do not generate NOLs sufficient to offset taxable income.

              We expect to generate NOLs and NOL carryforwards that we can utilize to offset future taxable income. Based on our current portfolio of assets, which include renewable assets that benefit from an accelerated tax depreciation schedule, and subject to potential tax audits, which may result in income, sales, use or other tax obligations, we do not expect to pay significant federal income tax for a period of approximately ten years. While we expect these losses will be available to us as a future benefit, in the event that they are not generated as expected, successfully challenged by the IRS (in a tax audit or otherwise) or subject to future limitations as discussed below, our ability to realize these benefits may be limited. A reduction in our expected NOLs, a limitation on our ability to use such losses or future tax audits, may result in a material increase in our estimated future income tax liability and may negatively impact our liquidity and financial condition.

Our ability to use NOLs to offset future income may be limited.

              Our ability to use NOLs generated in the future could be substantially limited if we were to experience an "ownership change" as defined under Section 382 of the Code. In general, an "ownership change" would occur if our "5-percent shareholders," as defined under Section 382 of the Code, collectively increased their ownership in us by more than 50 percentage points over a rolling three-year period. A corporation that experiences an ownership change will generally be subject to an annual limitation on the use of its pre-ownership change deferred tax assets equal to the equity value of the corporation immediately before the ownership change, multiplied by the long-term tax-exempt rate for the month in which the ownership change occurs. Future sales of our Class A common stock by NRG, as well as future issuances by us, could contribute to a potential ownership change.

A valuation allowance may be required for our deferred tax assets.

              Our expected NOLs are reflected as a deferred tax asset as they are generated until utilized to offset income. Valuation allowances may need to be maintained for deferred tax assets that we estimate

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are more likely than not to be unrealizable, based on available evidence at the time the estimate is made. Valuation allowances related to deferred tax assets can be affected by changes to tax laws, statutory tax rates and future taxable income levels and based on input from our auditors, tax advisors or regulatory authorities. In the event that we were to determine that we would not be able to realize all or a portion of our net deferred tax assets in the future, we would reduce such amounts through a charge to income tax expense in the period in which that determination was made, which could have a material adverse impact on our financial condition and results of operations and our ability to maintain profitability.

Distributions to holders of our Class A common stock may be taxable as dividends.

              It is difficult to predict whether we will generate earnings or profits as computed for federal income tax purposes in any given tax year. If we make distributions from current or accumulated earnings and profits as computed for federal income tax purposes, such distributions will generally be taxable to holders of our Class A common stock in the current period as ordinary dividend income for federal income tax purposes. Under current law, such dividends would be eligible for the lower tax rates applicable to qualified dividend income of non-corporate taxpayers. While we expect that a portion of our distributions to holders of our Class A common stock may exceed our current and accumulated earnings and profits as computed for federal income tax purposes and therefore constitute a non-taxable return of capital distribution to the extent of a stockholder's basis in our Class A common stock, no assurance can be given that this will occur.

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USE OF PROCEEDS

              Assuming no exercise of the underwriters' option to purchase additional shares of Class A common stock, we expect to receive approximately $518.3 million of net proceeds from the sale of the Class A common stock offered hereby based upon the assumed offering price of $51.15 per share, the last reported sale price of our Class A common stock on July 21, 2014, after deducting underwriting discounts and commissions and estimated offering expenses. If the underwriters exercise in full their option to purchase additional shares of Class A common stock, we estimate that the net proceeds to us will be approximately $596.3 million, after deducting underwriting discounts and commissions and estimated offering expenses.

              We intend to use all of the net proceeds from this offering to acquire newly issued Yield LLC Class A units, representing 13.9% of Yield LLC's outstanding membership units after this offering, from Yield LLC. We intend to cause Yield LLC to use the net proceeds of this offering together with cash on hand and the proceeds from newly issued debt securities to fund the the aggregate $870 million cash purchase price of the Alta Acquisition. However, this offering is not conditioned upon the completion of the Alta Acquisition, and, to the extent the Alta Acquisition is not completed, we expect that Yield LLC will use the net proceeds from this offering for general corporate purposes, including to fund other acquisition opportunities that may become available to us.

              We are evaluating other capital markets transactions to fund the remaining portion of the Alta Acquisition, including the issuance of senior debt securities by us or one or more of our subsidiaries. We do not have any commitments for any such financing, and there can be no assurance that it will be available on acceptable terms or at all.

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CAPITALIZATION

              The following table sets forth the cash and cash equivalents and consolidated capitalization as of March 31, 2014 on (i) a historical basis from our consolidated financial statements; (ii) an as adjusted basis to give effect to this offering and the use of the proceeds therefrom as set forth under "Use of Proceeds;" (iii) a pro forma as adjusted basis to reflect the Drop-Down Transactions and to give effect to this offering and the use of the proceeds therefrom as set forth under "Use of Proceeds;" and (iv) a pro forma basis to reflect the Drop-Down Transactions, the Alta Acquisition and to give effect to this offering and the use of the proceeds therefrom as set forth under "Use of Proceeds," in each case, as if it had occurred on such date.

              You should read the following table in conjunction with the sections entitled "Use of Proceeds," "Pro Forma Financial Statements," "Selected Historical Combined Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our combined financial statements and related notes thereto included elsewhere or incorporated by reference in this prospectus.

 
  March 31, 2014  
(in millions except shares)
  Actual   As Adjusted
Equity Offering(a)
  As Adjusted
Equity Offering
with Drop-Down
Transactions
  As Adjusted
Equity Offering
with Drop-Down
Transactions and
Alta Acquisition
 

Cash and restricted cash:

                         

Cash and cash equivalents

  $ 420   $ 957   $ 622   $ 158  

Restricted cash

    21     21     32     77  
                   

Total cash and restricted cash

  $ 441   $ 978   $ 654   $ 235  
                   
                   

Long-term debt:

                         

Amended and Restated Credit Agreement

  $   $   $   $  

3.5% Convertible Senior Convertible Notes due 2019(b)

    323     323     323     323  

New corporate debt(c)

                400  

Project-level debt

    1,058     1,058     1,715     3,327  
                   

Total long-term debt

    1,381     1,381     2,038     4,050  
                   

Equity:

                         

Class A common stock, par value $0.01 per share, 500,000,000 authorized; 22,511,250 issued and outstanding actual 33,011,250 issued and outstanding, as adjusted

                 

Class B common stock, par value $0.01 per share, 500,000,000 authorized; 42,738,750 issued and outstanding, actual and as adjusted

                 

Preferred stock, par value $0.01 per share, 10,000,000 shares authorized; no shares issued and outstanding, actual and as adjusted

                 

Additional paid-in-capital

    644     1,181     1,181     1,181  

Retained earnings

    4     4     4     4  

Accumulated other comprehensive loss

    (2 )   (2 )   (2 )   (2 )

Noncontrolling interest

    385     385     259     259  
                   

Total equity

    1,031     1,568     1,442     1,442  
                   

Total capitalization

  $ 2,412   $ 2,949   $ 3,480   $ 5,492  
                   
                   

(a)
Amounts as adjusted for this offering presented above assume a public offering price of $51.15 per share, the last reported sale price of our common stock on the New York Stock Exchange on July 21, 2014, before underwriting discounts and commissions and estimated offering expenses payable by us. After underwriting discounts and commissions and estimated offering expenses payable by us, we estimate net proceeds from this offering of approximately $518.3 million based on the same assumed public offering price per share.

(b)
The Convertible Notes were accounted for in accordance with ASC 470-20. Under ASC 470-20, issuers of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, are required to separately account for the liability (debt) and equity (conversion option) components. The applicability of ASC 470-20 resulted in the recognition of $23 million as the value for the equity component with the offset to debt discount. The debt discount will be amortized to interest expense using the effective interest method over the term of the notes.

(c)
We intend to issue $400 million of corporate debt to fund the remaining portion of the purchase price of the Alta Acquisition.

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PRICE RANGE OF OUR CLASS A COMMON STOCK

              Our Class A common stock currently trades on the New York Stock Exchange under the symbol "NYLD." The following table sets forth, for the periods indicated, the high and low prices per share of our Class A common stock as reported by the New York Stock Exchange.

 
  High   Low  

Year ending December 31, 2014:

             

Second quarter (through July 21, 2014)

  $ 55.10   $ 40.07  

First quarter

    41.23     34.89  

Year ending December 31, 2013:

             

Fourth quarter

    41.18     30.07  

Third quarter (starting July 17, 2013)

    31.26     26.50  

              As of July 21, 2014, the last reported sale price of our Class A common stock on the New York Stock Exchange was $51.15 per share. As of July 21, 2014, there was one holder of record of our Class A common stock. The number of record holders does not include persons who held our Class A common stock in nominee or "street name" accounts through brokers.

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CASH DIVIDEND POLICY

              We intend to pay a regular quarterly dividend to holders of our Class A common stock. We expect to pay a quarterly dividend on or about the 75th day following the expiration of each fiscal quarter to holders of our Class A common stock of record on or about the 60th day following the last day of such fiscal quarter.

              The following table sets forth the per share dividends we have declared since the closing of our initial public offering:

Declaration Date
  Record Date   Payment Date   Amount Per Share  

October 31, 2013

    December 2, 2013     December 16, 2013   $ 0.23 (1)

January 30, 2014

    March 3, 2014     March 17, 2014   $ 0.33  

May 5, 2014

    June 2, 2014     June 16, 2014   $ 0.35  

(1)
Represents a prorated rate of $0.30 per share if such period had been a full fiscal quarter.

Rationale for Our Dividend

              In accordance with its operating agreement and in our capacity as the sole managing member, we intend to cause Yield LLC to make regular quarterly cash distributions to its members in an amount equal to the cash available for distribution generated during a given quarter less reserves for the prudent conduct of our business (including for, among other things, unplanned capital expenditures and dividend shortfalls as a result of seasonality in our cash flows), and to use the amount distributed to Yield Inc. to pay regular quarterly dividends to holders of our Class A common stock.

              Our dividend policy reflects a basic judgment that holders of our Class A common stock will be better served by distributing all of the cash distributions we receive from Yield LLC each quarter in the form of a quarterly dividend rather than retaining it. In addition, by providing for the provision of reserves each quarter after calculating cash available for distribution and thereby enabling Yield LLC to retain a portion of its cash generated from operations, we believe we will also provide better value to holders of our Class A common stock by maintaining the operating capacity of our assets and, in turn, dividend paying capacity.

              Our cash available for distribution is likely to fluctuate from quarter to quarter, in some cases significantly, as a result of the seasonality of our assets, maintenance and outage schedules among other factors. Accordingly, during quarters in which Yield LLC generates cash available for distribution in excess of the amount necessary to distribute to us to pay our stated quarterly dividend, we may cause it to reserve a portion of the excess to fund its cash distribution in future quarters. In quarters in which we do not generate sufficient cash available for distribution to fund our stated quarterly cash dividend, if our board of directors so determines, we may use sources of cash not included in our calculation of cash available for distribution, such as net cash provided by financing activities, network upgrade reimbursements, all or any portion of the cash on hand or, if applicable, borrowings under our Amended and Restated Credit Agreement, to pay dividends to holders of our Class A common stock. Although these other sources of cash may be substantial and available to fund a dividend payment in a particular period, we exclude these items from our calculation of cash available for distribution because we consider them non-recurring or otherwise not representative of the operating cash flows we typically expect to generate.

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              In general, we expect that "cash available for distribution" each quarter will equal Adjusted EBITDA generated during the period plus cash distributions received from unconsolidated affiliates, less:

Limitations on Cash Dividends and Our Ability to Change Our Dividend Policy

              There is no guarantee that we will pay quarterly cash dividends to holders of our Class A common stock. We do not have a legal obligation to pay dividends. Our dividend policy may be changed at any time and is subject to certain restrictions and uncertainties, including the following:

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Our Ability to Grow our Business and Dividend

              We intend to grow our business primarily through the acquisition of contracted power assets, which, we believe, will facilitate the growth of our cash available for distribution and enable us to increase our dividend per share over time. However, the determination of the amount of cash dividends to be paid to holders of our Class A common stock will be made by our board of directors and will depend upon our financial condition, results of operations, cash flow, long-term prospects and any other matters that our board of directors deem relevant.

              We expect that we will rely primarily upon external financing sources, including commercial bank borrowings and issuances of debt and equity securities, to fund any future growth capital expenditures. To the extent we are unable to finance growth externally, our dividend policy could significantly impair our ability to grow because we do not currently intend to reserve a substantial amount of cash generated from operations to fund growth opportunities. If external financing is not available to us on acceptable terms, our board of directors may decide to finance acquisitions with cash from operations, which would reduce or even eliminate our cash available for distribution and, in turn, impair our ability to pay dividends to holders of our Class A common stock. To the extent we issue additional shares of capital stock to fund growth capital expenditures, the payment of dividends on those additional shares may increase the risk that we will be unable to maintain or increase our per share dividend level. There are no limitations in our bylaws, and there will not be any limitations under our Amended and Restated Credit Agreement, on our ability to issue additional shares of capital stock, including preferred stock that would have priority over our Class A common stock with respect to the payment of dividends. Additionally, the incurrence of additional commercial bank borrowings or other debt to finance our growth would result in increased interest expense, which in turn may impact our cash available for distribution and, in turn, our ability to pay dividends to holders of our Class A common stock.

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UNAUDITED PRO FORMA CONSOLIDATED COMBINED FINANCIAL STATEMENTS

              The Unaudited Pro Forma Consolidated Combined Financial Statements (the "pro forma financial statements") combine the historical consolidated financial statements of Yield Inc., the financial statements of the Acquired ROFO Assets, and the combined statements of the Alta Wind Portfolio, to illustrate the potential effect of the Drop-Down Transactions and the Alta Acquisition. The pro forma financial statements are based on, and should be read in conjunction with, the:

              The historical consolidated financial statements have been adjusted in the pro forma financial statements to give effect to pro forma events that are (1) directly attributable to the Alta Acquisition and the Drop-Down Transactions, (2) factually supportable and (3) with respect to the pro forma statements of operations, expected to have a continuing impact on the combined results. The Unaudited Pro Forma Consolidated Combined Statements of Operations (the "pro forma statement of operations") for the year ended December 31, 2013 and for the three months ended March 31, 2014, give effect to the acquisitions as if they occurred on January 1, 2013. The Unaudited Pro Forma Consolidated Combined Balance Sheet (the "pro forma balance sheet") as of March 31, 2014, gives effect to the acquisitions as if they occurred on March 31, 2014.

              As described in the accompanying notes, the pro forma financial statements have been prepared using the acquisition method of accounting under GAAP and the regulations of the SEC. The Drop-Down Transactions will be accounted as a transfer of entities under common control and the purchase price will be allocated to the carrying values of the assets acquired and liabilities assumed as of the date of the acquisitions. The expected purchase price for the Alta Acquisition will be allocated to the assets acquired and liabilities assumed based upon their estimated fair values as of the date of the acquisition. Valuations necessary to determine the fair value of the assets and liabilities have not been completed and cannot be made prior to the completion of the transaction.

              Accordingly, the pro forma purchase price adjustments are preliminary, subject to future adjustments, and have been made solely for the purpose of providing the unaudited pro forma combined financial information presented herewith. Differences between these preliminary estimates and the final acquisition accounting will occur and these differences could have a material impact on the accompanying pro forma financial statements and the combined company's future results of operations and financial position. The pro forma financial statements have been presented for informational purposes only and are not necessarily indicative of what the combined company's results of operations and financial position would have been had the Drop-Down Transactions and the Alta Acquisition been completed on the dates indicated. Yield Inc. could incur significant costs to integrate the businesses. The pro forma financial statements do not reflect the cost of any integration activities or benefits that may result from synergies that may be derived from any integration activities. In addition, the pro forma financial statements do not purport to project the future results of operations or financial position of the combined company.

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Unaudited Pro Forma Combined Consolidated Income Statement
Three Months Ended March 31, 2014

 
  NRG Yield, Inc.
Historical
  Combined
Acquired
ROFO
Assets
  Pro Forma
Adjustments
  NRG Yield, Inc.
with
Acquired
ROFO
Assets
  Alta
Wind
Portfolio
  Pro Forma
Adjustments
  Pro Forma
Combined
 
 
  (in millions, except per share amounts)
 

Operating revenues

                                           

Total operating revenues

  $ 110   $ 29   $   $ 139   $ 43   $   $ 182  

Operating Costs and Expenses

                                           

Cost of operations

    53     6         59     11         70  

Depreciation and amortization

    17     7         24     16     10 (c)   50  

General and administrative

                    1         1  

General and administrative—affiliate

    2               2             2  
                               

Total operating costs and expenses

    72     13         85     28     10     123  

Operating Income/(Loss)

    38     16         54     15     (10 )   59  

Other Income/(Expense)

                                           

Equity in earnings of unconsolidated affiliates

    1             1             1  

Other income, net

    1             1             1  

Interest expense

    (19 )   (8 )       (27 )   (33 )   (6 )(d)   (66 )
                               

Total other income / (expense)

    (17 )   (8 )       (25 )   (33 )   (6 )   (64 )
                               

Income Before Income Taxes

    21     8         29     (18 )   (16 )   (5 )

Income tax expense/(benefit)

    3         1 (a)   4         (5 )(a)   (1 )
                               

Net Income/(loss)

    18     8     (1 )   25     (18 )   (11 )   (4 )
                               

Less: Net income attributable to noncontrolling interest

    14         5 (b)   19         (21 )(b)   (2 )
                               

Net income/(loss) attributable to NRG Yield, Inc

  $ 4   $ 8   $ (6 ) $ 6   $ (18 ) $ 10   $ (2 )
                               
                               

Earnings per share attributable to Class A common stockholders

                                           

Basic weighted average number of Class A common shares outstanding

    23                             10 (e)   33  

Basic earnings per Class A common share

  $ 0.18                                 $ (0.06 )
                                         
                                         

Diluted weighted average number of Class A common shares outstanding

    30                             3 (e)   33  

Diluted earnings per Class A common share

  $ 0.17                                 $ (0.06 )
                                         
                                         

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Unaudited Pro Forma Combined Consolidated Income Statement
Year Ended December 31, 2013

 
  NRG Yield, Inc.
Historical
  Combined
Acquired
ROFO
Assets
  Pro
Forma
Adjustments
  NRG Yield, Inc.
with
Acquired
ROFO
Assets
  Alta
Wind
Portfolio
  Pro Forma
Adjustments
  Pro Forma
Combined
 
 
  (in millions, except per share amounts)
 

Operating revenues

                                           

Total operating revenues

  $ 313   $ 65   $   $ 378   $ 184   $   $ 562  

Operating Costs and Expenses

                                           

Cost of operations

    127     17         144     40         184  

Depreciation and amortization

    51     10         61     49     38 (c)   148  

General and administrative

                    4         4  

General and administrative—affiliate

    7             7             7  
                               

Total operating costs and expenses

    185     27         212     93     38     343  

Operating Income/(Loss)

    128     38         166     91     (38 )   219  

Other Income/(Expense)

                                           

Equity in earnings of unconsolidated affiliates

    22             22             22  

Other income, net

    2     1         3             3  

Interest expense

    (35 )   (16 )       (51 )   (62 )   (22 )(d)   (135 )
                               

Total other income / (expense)

    (11 )   (15 )       (26 )   (62 )   (22 )   (110 )
                               

Income Before Income Taxes

    117     23         140     29     (60 )   109  

Income tax expense/(benefit)

    8         3 (a)   11         (1 )(a)   10  
                               

Net Income/(Loss)

    109     23     (3 )   129     29     (59 )   99  
                               

Less: Predecessor income prior to initial public offering on July 22, 2013

    54                 54                 54  
                                       

Net Income/(Loss) Subsequent to Initial Public Offering

    55     23     (3 )   75     29     (59 )   45  

Less: Net income/(loss) attributable to non-controlling interest

    42         15 (b)   57         (26 )(b)   31  
                               

Net income/(loss) attributable to NRG Yield, Inc

  $ 13   $ 23   $ (18 ) $ 18   $ 29   $ (33 ) $ 14  
                               
                               

Earnings per share attributable to Class A common stockholders

                                           

Basic weighted average number of Class A common shares outstanding

    23                             10 (e)   33  

Basic earnings per Class A common share

  $ 0.57                                 $ 0.52  
                                         

Diluted weighted average number of Class A common shares outstanding

    23                             10 (e)   33  

Diluted earnings per Class A common share

  $ 0.57                                 $ 0.52  
                                         
                                         

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Unaudited Pro Forma Combined Consolidated Balance Sheet

As of March 31, 2014

 
  NRG Yield,
Inc.
Historical
  Combined
Acquired
ROFO
Assets
  Pro Forma
Adjustments
  NRG Yield, Inc.
with Acquired
ROFO Assets
  Alta
Wind
Portfolio
  Pro Forma
Adjustments
  Pro Forma
Combined
 
 
  (in millions)
 

ASSETS

                                           

Current Assets

                                           

Cash and cash equivalents

  $ 420   $ 14   $ (349 )(f) $ 85   $ 6   $ 67 (1) $ 158  

Restricted cash

    21     11         32     45         77  

Accounts receivable—trade, net

    38     7         45     16         61  

Accounts receivable—affiliate

    1             1     7         8  

Inventory

    15             15     1         16  

Derivative instruments

    1             1             1  

Notes receivable

    2     4         6             6  

Prepayments and other current assets

    4     65         69     6     (5 )(h)   70  
                               

Total current assets

    502     101     (349 )   254     81     62     397  

Property, Plant and Equipment

                                           

Property, plant and equipment, net of accumulated depreciation

    1,530     745         2,275     1,487         3,762  

Other Assets

                                           

Equity investments in affiliates

    229             229             229  

Notes receivable

    5     14         19             19  

Intangible assets, net of accumulated amortization

    85     17         102     111     827 (i)   1,040  

Derivative instruments

    7     5         12     8         20  

Deferred income taxes

    144             144             144  

Other non-current assets

    32     24         56     56     (48) (j)   64  
                               

Total other assets

    502     60         562     175     779     1,516  
                               

Total Assets

  $ 2,534   $ 906   $ (349 ) $ 3,091   $ 1,743   $ 841   $ 5,675  
                               
                               

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Unaudited Pro Forma Combined Consolidated Balance Sheet (Continued)

As of March 31, 2014

 
  NRG Yield,
Inc.
Historical
  Combined
Acquired
ROFO
Assets
  Pro Forma
Adjustments
  NRG Yield, Inc.
with Acquired
ROFO Assets
  Alta
Wind
Portfolio
  Pro Forma
Adjustments
  Pro Forma
Combined
 
 
  (in millions)
 

LIABILITIES AND STOCKHOLDERS' EQUITY

                                           

Current Liabilities

                                           

Current portion of long-term debt and capital leases

  $ 71   $ 83   $   $ 154   $ 31   $   $ 185  

Accounts payable

    14     1         15     4         19  

Payable to affiliates

    26     10         36     3         39  

Derivative instruments

    22     8         30     3         33  

Accrued expenses and other current liabilities

    17     4         21     17         38  
                               

Total current liabilities

    150     106         256     58         314  

Other Liabilities

                                           

Long-term debt and capital leases

    1,310     574         1,884     1,581     400 (k)   3,865  

Derivative instruments

    20             20             20  

Other non current liabilities

    23     3         26     14     (6) (h)   34  
                               

Total non-current liabilities

    1,353     577         1,930     1,595     394     3,919  
                               

Total Liabilities

    1,503     683         2,186     1,653     394     4,233  

Stockholders' Equity

                                           

Additional paid-in capital

    644     197     (197 )(g)   644     90     447 (l),(m)   1,181  

Retained earnings

    4     29     (29 )(g)   4             4  

Accumulated other comprehensive (loss) income

    (2 )   (3 )   3 (g)   (2 )           (2 )

Noncontrolling interest

    385         (126 )(g)   259             259  
                               

Total Stockholders' Equity

    1,031     223     (349 )   905     90     447     1,442  
                               

Total Liabilities and Stockholders' Equity

  $ 2,534   $ 906   $ (349 ) $ 3,091   $ 1,743   $ 841   $ 5,675  
                               
                               

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Unaudited Pro Forma Combined Consolidated Balance Sheet (Continued)

As of March 31, 2014


Notes to the Unaudited Pro Forma Condensed Combined Financial Statements

(a)
Represents the adjustment to record the tax effect of including the results of the Acquired ROFO Assets and Alta Wind Portfolio in Yield Inc.'s results as well as the impact of the pro forma adjustments related to the amortization of intangible assets acquired and additional interest associated with new corporate debt.

(b)
Represents the adjustment to record noncontrolling interest associated including with the results of the Acquired ROFO Assets and Alta Wind Portfolio in Yield Inc.'s results as well as the impact of the change in noncontrolling interest from 65.5% to 56.4% effective with the Class A common stock issued in connection with this offering.

(c)
Represents additional amortization expense resulting from the intangible asset value associated with the acquired PPAs. The terms of the PPAs range from 21 to 24 years. The estimate is preliminary, subject to change and could vary materially from the actual adjustment on the date of the acquisition.

(d)
Reflects the estimated increase in interest expense as Yield Inc. intends to issue $400.0 million of corporate debt to fund the purchase price of the acquisition. Yield Inc. estimates that it will issue $400.0 million of additional senior notes at an estimated interest rate of 5.50%. This would result in approximately $22.0 million of additional interest expense for the year ended December 31, 2013 and approximately $6.0 million of additional interest expense for the three months ended March 31, 2014. The actual interest rates may vary from the estimate, and a 0.25% variance in the interest rate would increase or decrease, as applicable, annual pro forma interest expense by approximately $1.0 million. Additionally, the actual amount of corporate debt issued may vary, and a $50.0 million change in the amount of corporate debt issued would increase or decrease, as applicable, annual pro forma interest expense by approximately $2.75 million.

(e)
Represents the additional Class A common shares to be issued in connection with this offering. The inclusion of the results of the Acquired ROFO Assets and the Alta Wind Portfolio in Yield Inc.'s results changes net income attributable to Yield Inc. to net loss attributable to NRG. Accordingly, the pro forma adjustments reflect the removal of 7 million dilutive shares that are anti-dilutive on the pro forma results.

(f)
Represents cash utilized to fund the purchase price of the Acquired ROFO Assets.

(g)
Represents the adjustment to reclassify the equity of the Acquired ROFO Assets to non-controlling interest. The acquisition represents a transfer of interests under common control and the equity was transferred at carrying value with no gain or loss recorded.

(h)
Represents the adjustment to remove prepaid rent and deferred revenue in connection with the Alta Acquisition.

(i)
Represents the intangible asset value associated with the acquired PPAs. The estimated terms of the PPAs range from 21 to 24 years. The estimate is preliminary, subject to change and could vary materially from the actual adjustment on the date of the acquisition. For each $100 million change in the fair value adjustment to intangible assets, combined annual amortization expense would be expected to change by approximately $5 million.

(j)
Represents the adjustment to remove deferred financing costs in connection with the Alta Acquisition.

(k)
Yield Inc. estimates that it will issue $400.0 million of corporate debt to fund the Alta Acquisition at an estimated interest rate of 5.50%. The actual interest rates may vary from the estimate, and a 0.25% variance in the interest rate would increase or decrease, as applicable, annual pro forma interest expense by approximately $1.0 million. Additionally, the actual amount of corporate debt issued may vary from the estimate, and a $50.0 million change in the amount of corporate debt issued would increase or decrease, as applicable, annual pro forma interest expense by approximately $2.75 million.

(l)
Represents the issuance of Class A common shares in connection with this offering and adjustments to equity to reflect the impact of the Alta Acquisition and the additional cash recorded from gross proceeds of this offering in excess of the estimated purchase price.

(m)
The estimated purchase price for the Alta Acquisition, which is expected to be funded by the following components:

 
  (in millions)  

Debt to be issued

    400  

Class A common stock issued in this offering

    470