Response to Seeking Alpha Article

Henrik, as always, we appreciate your opinions and questions and welcome the discussion.  Not sure how you tried to reach me, but I have no record of email nor phone voicemail from you and I believe we provided both to make it easy for you.  We will reach out to you again to provide and look forward to your outreach.

Not sure why the finance obligation is a surprise.  We have routinely reported this in current liability as a transparent reflection of what we are doing.  The amounts you reference relate specifically to project financings from varied capital leases with balloon obligations; its just how this capital partner structures their deals.  It’s a capital partner we have worked with for over three years and they have continued to invest more with Plug and, as we conveyed in our filing, they are working with us now to refinance this obligation as well as invest more.  Nothing changed, there was no event that accelerated this, nor any of the other suppositions that you were concerned with – its business as usual.  We ended 2018 with over $38 mil in unrestricted cash and only $17 mil in corporate debt against over $89 million in restricted cash (on and off-balance sheet) and over $390 mil in assets.  This infers we have plenty of capacity to refinance these obligations and leverage more debt as needed to fund near term working capital needs.  We expect to announce something relatively soon on this.

As with many Companies, the SEC has been working with us on our non-gaap measures.  Our intent has always been to be transparent and provide additional information to help stakeholders understand our business and growth.  We did not include free cash flow this time, but if we had, using the exact same basis as we have been, it would have been positive $9 million for full year 2019; first time in the history of Plug.  We are trying to keep things simpler and more focused on the key drivers, Gross Billings and EBITDA; especially given that EBITDA and operating cash flows provide perspective on cash generation.  We changed the starting point for the EBITDA calculation and naming nomenclature given guidance from the SEC, but if you calculated it on same basis as we had been using, you would get the same number.  Many companies use operating cash flows as the starting point given it begins with a number already net of non-cash items.

Not sure why you say we backed off our guidance to moving to routine positive EBITDA and cash flows;  We reiterated guidance in our investor letter last week for 2019.

Lastly, in reference to your comments on accounting for project financing, we don’t write the accounting rules, we just follow them.  What I can tell you, as we have conveyed before, is that we have significantly improved the terms of these financings over the last year or so given the underlying customer is now guaranteeing a large portion of the deal, the return of ITC in 2018, and the banks are now increasing more and more their residual value expectations.  The net result is better economics and terms for Plug.  In the last two years, Plug had to convey the impact of these financings under non-gaap measures (i.e. PPA financing margin in EBITDA).  Given the improvement in the terms, the transactions are required by US GAAP rules to be reported as sale leaseback transactions, which reflects the results in our GAAP numbers.  This means its more transparent and less complicated to convey the impact of this business stream.  By the way, these rules have always been the same, the new lease standard did not change that.  It did however, as it will for all companies, require that Plug reflect an asset and obligation for all operating leases.  To confirm your point on this, future receipts on the associated PPA programs does exceed all finance obligations.

I hope this additional insight was helpful and look forward to your outreach.