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As filed with the Securities and Exchange Commission on October 8, 2008

Registration No. 333-152671

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


Amendment No. 1
to
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

First Wind Holdings 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)
  26-2583290
(I.R.S. Employer
Identification Number)

85 Wells Avenue, Suite 305
Newton, MA 02459
(617) 964-3340
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Paul Gaynor
President and Chief Executive Officer
85 Wells Avenue, Suite 305
Newton, MA 02459
(617) 964-3340
(Name, address, including zip code, and telephone number, including area code, of agent for service)


Copies to:

David P. Oelman
D. Alan Beck, Jr.
Vinson & Elkins L.L.P.
1001 Fannin Street, Suite 2500
Houston, TX 77002
(713) 758-2222
  Dennis M. Myers, P.C.
Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, IL 60601
(312) 861-2000
  Christian O. Nagler
Kirkland & Ellis LLP
153 East 53rd Street
New York, NY 10022
(212) 446-4800


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

        If any 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, as amended (the "Securities Act"), 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, 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 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
(Do not check if a smaller reporting company)
  Smaller reporting company o

        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 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 relating to this prospectus filed with the Securities and Exchange Commission is declared effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED OCTOBER 8, 2008

             Shares

First Wind Holdings Inc.

Class A Common Stock


        We are selling             shares of our Class A common stock and we intend to use the net proceeds of this offering to repay indebtedness and fund capital expenditures.

        The issuer in this offering, First Wind Holdings Inc., will be a holding company and its sole asset will be approximately       % of the Series A Units of First Wind Holdings, LLC. Concurrently with the consummation of this offering, it will issue                  and                  shares of Class A and Class B common stock, respectively, to the continuing members of First Wind Holdings, LLC.

        Prior to this offering, there has been no public market for our Class A common stock. The initial public offering price of our Class A common stock is expected to be between $                  and $                  per share. We have applied to list our Class A common stock on the Nasdaq Global Market under the symbol "WNDY."

        The underwriters have an option to purchase a maximum of                      additional shares from us to cover over-allotments of shares.

        Investing in our Class A common stock involves risks. See "Risk Factors" beginning on page 15.

 
  Price to
Public
  Underwriting
Discounts and
Commissions
  Proceeds to First Wind Holdings Inc.  
Per Share     $                             $                             $                          
Total     $                             $                             $                      
 

        Delivery of the shares of Class A common stock will be made on or about                          , 2008.

        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.


Credit Suisse

 

Goldman, Sachs & Co.

 

JPMorgan

The date of this prospectus is                          , 2008.


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GRAPHIC

GRAPHIC



TABLE OF CONTENTS

 
  Page

PROSPECTUS SUMMARY

  1

RISK FACTORS

  15

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

  38

MARKET AND INDUSTRY DATA

  39

USE OF PROCEEDS

  39

DIVIDEND POLICY

  40

CAPITALIZATION

  41

DILUTION

  42

UNAUDITED PRO FORMA FINANCIAL INFORMATION

  43

SELECTED HISTORICAL FINANCIAL AND OPERATING DATA

  50

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  53

INDUSTRY

  86

BUSINESS

  100

MANAGEMENT

  136

EXECUTIVE COMPENSATION

  142

SUMMARY OF COMPENSATION

  154

PRINCIPAL STOCKHOLDERS

 
163

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

  165

THE REORGANIZATION AND OUR HOLDING COMPANY STRUCTURE

  173

DESCRIPTION OF CAPITAL STOCK

  181

SHARES ELIGIBLE FOR FUTURE SALE

  186

DESCRIPTION OF PRINCIPAL INDEBTEDNESS

  188

CERTAIN MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR NON-UNITED STATES HOLDERS

  194

UNDERWRITING

  197

NOTICE TO CANADIAN RESIDENTS

  202

LEGAL MATTERS

  204

EXPERTS

  204

WHERE YOU CAN FIND MORE INFORMATION

  204

GLOSSARY

  205


        You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. We are not making an offer to sell these securities in any state where an offer or sale is not permitted. You should not assume that the information appearing in this prospectus is accurate as of any date other than the respective dates as of which the information is given.

        Until                    , 2008 (25 days after the commencement of this offering), all dealers that buy, sell or trade the Class A common stock may be required to deliver a prospectus, regardless of whether they are participating in this offering. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.


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PROSPECTUS SUMMARY

        This summary highlights selected information from this prospectus but does not contain all information that you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, including "Risk Factors" beginning on page 15, and the consolidated financial statements included elsewhere in this prospectus. In this prospectus, we refer to: (i) First Wind Holdings Inc. and its subsidiaries, including First Wind Holdings, LLC, after giving effect to the reorganization described herein as "First Wind Holdings," "we," "us," "our" or "our company;" (ii) entities in the D. E. Shaw group as "the D. E. Shaw group;" (iii) Madison Dearborn Capital Partners IV, L.P., as "Madison Dearborn;" and (iv) the D. E. Shaw group and Madison Dearborn collectively as "our Sponsors." Certain other terms used in this prospectus are defined in the "Glossary" beginning on page 205 of this prospectus. Unless otherwise indicated, the financial information in this prospectus represents the historical financial information of First Wind Holdings, LLC.

First Wind Holdings Inc.

Overview

        We are an independent North American wind energy company focused exclusively on the development, ownership and operation of wind energy projects. As of August 31, 2008, our portfolio of wind energy projects included approximately 5,564 megawatts ("MW") of operating and prospective capacity, of which 92 MW were operating and 182 MW were under construction. We expect to start construction on a 203 MW project in 2008 and, as a result, to be simultaneously constructing three wind energy projects representing 385 MW of capacity. Our goal is to have approximately 1,100 MW of operating capacity by the end of 2010 and we target the construction and commissioning of approximately 400 MW annually thereafter to achieve approximately 2,300 MW of operating capacity by the end of 2013. We have entered into purchase contracts for turbines with an aggregate generating capacity in excess of 1,300 MW, which are scheduled to be delivered or commissioned between 2008 and 2013. We expect this supply will be sufficient to meet all of our anticipated turbine needs in 2008 and 2009 and approximately 80% of our anticipated turbine needs in 2010. Our ability to complete the projects in our development pipeline and achieve our targeted capacity is subject to a number of risks and uncertainties as described in the "Risk Factors" section of this prospectus.

        We believe that wind energy projects provide a wide range of potential investment returns. We have strategically focused on developing a diversified portfolio of wind energy projects that we believe will generate investment returns at the higher end of this range. We seek to achieve these returns by targeting regions with high electricity prices, state-sponsored renewable portfolio standard ("RPS") programs that mandate demand for renewable generation, favorable renewable energy certificate ("REC") prices and desirable wind characteristics. Currently, we focus on developing wind energy projects in the northeastern and western regions of the continental U.S. and in Hawaii.

        Our strategy since inception in 2002 has been to build a company with the ability to develop, own and operate a portfolio of wind energy projects in favorable markets. Our team of more than 140 employees has broad experience in wind project development, transmission line development, meteorology, engineering, permitting, construction, finance, law, asset management, maintenance and operations. We have established land control, stakeholder relationships, meteorological programs, community initiatives and developed transmission solutions in the markets in which we focus and expect to continue to do so in the future.

        We continue to engage in "prospecting" activities, which involve a broad, high-level review of potential sites that may be suitable for wind energy development. We have built our existing pipeline through these prospecting activities and will continue to do so in the future with projects that we believe meet our investment return standards. We classify our projects into the following four categories based on their stage of development: operating/under-construction, advanced, intermediate

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and early. We have defined these categories to enhance the visibility of our annual production capacity and for internal planning purposes, including projecting our future needs for turbines and personnel. A summary of our projects, as of August 31, 2008, is set forth below:

 
  Northeast   West   Hawaii    
   
 
Stage of Development
  Number of Projects   Capacity(1) (MW)   Number of Projects   Capacity(1) (MW)   Number of Projects   Capacity(1) (MW)   Total Number of Projects   Total Anticipated Capacity(1) (MW)  

Operating/Under-construction(2)

    4     244             1     30     5     274  

Advanced(3)

    7     287     2     403     1     30     10     720  

Intermediate

    4     217     3     425     1     21     8     663  

Early

    5     477     9     3,130     2     300     16     3,907  
                                   

Total

    20     1,225     14     3,958     5     381     39     5,564  
                                   

(1)
Our ability to complete our projects and achieve anticipated capacities and anticipated dates of commercial operation is subject to a number of risks and uncertainties as described in the "Risk Factors" section of this prospectus.
(2)
62 MW currently operating in the Northeast and 30 MW currently operating in Hawaii.
(3)
We expect a 203 MW advanced project in the West to be in construction by the end of 2008.

        Based on our current portfolio of projects, representing 5,564 MW of operating and prospective capacity, the chart set forth below illustrates how we could achieve our targeted installed capacity for 2008 through 2013 using our current projects as they were categorized as of August 31, 2008.(1)

GRAPHIC


(1)
Our ability to complete our projects and achieve our target of constructing and commissioning approximately 400 MW of projects per year is subject to a number of risks and uncertainties as described in the "Risk Factors" section of this prospectus.

        We have achieved a number of milestones in our markets, including:

    Northeast.  We have completed the largest utility-scale wind energy project in New England and have obtained the first permit for a utility-scale wind energy project in Vermont since 1996. For more detailed information regarding the Northeast, see "Industry—Our Regions—Northeast."

    West.   We entered into a long-term power purchase agreement ("PPA") with the Southern California Public Power Authority ("SCPPA") to supply power to the cities of Los Angeles,

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      Burbank and Pasadena from a 203 MW wind energy project in Utah, which we expect to be under construction in 2008. For more detailed information regarding the West, see "Industry—Our Regions—West."

    Hawaii.  We successfully completed and are operating the largest utility-scale wind energy project in Hawaii. For more detailed information regarding Hawaii, see "Industry—Our Regions—Hawaii."

        We generate revenues from the following sources:

    Electricity sales.  We typically sell the power generated by our wind energy projects either pursuant to PPAs with local utilities or power companies or directly into the local power grid at market prices. We seek to hedge a significant portion of the market component of our power sales revenue.

    Capacity payments.  In some states in which we have operating projects, payments are made to energy generators, including wind energy projects, as a market incentive to promote the development and continued operation of capacity sufficient to meet regional land and reserve requirements. Although we believe significant opportunities for capturing the value of capacity payments may develop in the markets in which we operate, capacity payments are not currently a significant source of revenues to us.

    REC sales.  In some states, we sell RECs to generators that must either purchase or generate certain quantities of RECs to comply with state RPS programs. Currently, 21 states and the District of Columbia have adopted RPS programs that operate in tandem with a credit trading system in which generators sell RECs for renewable power they generate in excess of state-mandated requirements.

        We also earn federal production tax credits ("PTCs") for our renewable generation, which we monetize by entering into tax equity financing transactions as part of our project financing strategy. As a result of these transactions, we receive up-front payments, and our tax equity investors receive a substantial portion of the cash generated from the related project's electricity sales. For more information regarding our revenues and tax equity financing transactions, see "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Industry Overview

        According to the Energy Information Administration ("EIA"), wind energy generation capacity grew in the U.S. at a compound annual growth rate ("CAGR") of 29.1% from 2002 through 2007, making wind energy the fastest growing source of new electricity in the U.S. Emerging Energy Research ("EER") forecasts that installed wind energy capacity in the U.S. will grow at a CAGR of 26.6% from 2007 through 2013. Despite the significant anticipated growth in the U.S., wind energy provided only 0.8% of total U.S. electricity production in 2007 and is expected to account for only 1.8% of total U.S. electricity production in 2012, based on data from EIA. This represents a small portion compared to the current percentage of electricity produced by wind energy in Denmark, Spain and Germany, of approximately 17%, 9% and 6%, respectively, based on data from the Danish Energy Authority and the Global Wind Energy Council.

        We believe wind energy growth in the U.S. is primarily driven by the following factors:

    rising energy prices;

    growing environmental concerns and legislation promoting the development of renewable energy;

    increasing concern over the dependence of the U.S. on foreign energy imports; and

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    continued improvements in wind technologies.

Competitive Strengths

        We believe the following strengths will enable us to capitalize on what we believe to be significant opportunities for growth:

    Significant portfolio of wind energy projects in North America and Hawaii.  As of August 31, 2008, our portfolio of wind energy projects included approximately 5,564 MW of operating and prospective capacity in the following four categories: operating/under-construction (274 MW), advanced (720 MW), intermediate (663 MW) and early (3,907 MW).

    Proven record in developing complex wind energy projects.  We have a proven track record of developing wind energy projects in locations with complex environmental permitting processes and regulatory regimes.

    Established in favorable markets.  We seek to generate high investment returns by developing, owning and operating wind energy projects in areas with desirable wind characteristics that have access to markets characterized by high electricity prices, state-sponsored RPS programs that mandate demand for renewable generation and favorable REC prices.

    Positioned to capitalize on significant growth in the U.S. wind energy industry.  Wind energy generation capacity grew at a CAGR of 29.1% from 2002 through 2007, according to EIA, and EER forecasts that installed wind capacity in the U.S. will grow at a CAGR of 26.6% from 2007 through 2013.

    Secured turbines with generating capacity in excess of 1,300 MW.  We have entered into purchase contracts for turbines with an aggregate generating capacity in excess of 1,300 MW, which are scheduled to be delivered or commissioned between 2008 and 2013.

    Experienced management team with significant equity ownership.  The members of our senior management team have significant expertise across a diverse skill set in areas that are important to our business. In addition, members of our senior management team have a meaningful equity stake in our company.

Strategy

        The following are key elements of our strategy:

    Successfully execute and capitalize on our pipeline of existing development projects.  Our goal is to have approximately 1,100 MW of operating capacity by the end of 2010 and we target the construction and commissioning of approximately 400 MW annually thereafter to achieve approximately 2,300 MW of operating capacity by the end of 2013. Expansions of current operating/under-construction or advanced projects account for 1,063 MW, or 19%, of our total portfolio of wind energy projects.

    Expand our pipeline of development projects.  We have assembled a team of employees located in our existing markets who actively search for additional opportunities for wind development, including expansions of existing projects and selective acquisitions.

    Continue to exploit development opportunities through creative transmission solutions.  We have assembled the core internal expertise necessary to develop, build and own significant transmission assets in order to access and develop wind energy projects in markets that we would otherwise be unable to pursue.

    Actively manage commodity price exposure and continue to optimize the financing of our projects.  By entering into fixed price PPAs and/or financial hedges and selectively selling forward RECs, we

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      hedge a significant portion of our current revenue stream while preserving our ability to capture the benefits of potential developments in REC, capacity and carbon markets. We believe that stabilizing our revenues benefits us, our lenders and tax equity investors and enhances our ability to obtain financing on attractive terms.

    Maintain full development and operational control.  We control the development, construction and operation of all of our wind energy projects. We believe retaining control over our projects enhances our credibility, allows us to make rapid decisions and strengthens our relationships with landowners, local communities, regulators and other stakeholders.

    Substantial local presence and community stakeholder involvement in the markets in which we are active.  We open local offices to work cooperatively with the communities in which our wind energy projects are located in order to better understand their unique issues and concerns. We believe that having local offices and coordinating with our communities allows us to better assess our projects' feasibility and economic viability than developing our projects remotely.

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Our Portfolio of Wind Energy Projects as of August 31, 2008

Name
  MW   Market
Region
  Location   Actual/Projected
Date of
Commercial
Operation(1)
 

Operating

                     
 

Kaheawa Wind Power I

    30   Hawaii   HI     June 2006  
 

Mars Hill

    42   Northeast   ME     March 2007  
 

Steel Winds I

    20   Northeast   NY     June 2007  
                     
   

Operating Capacity Subtotal

    92                
                     

Under-construction

                     
 

Cohocton I

    125   Northeast   NY     December 2008  
 

Stetson I

    57   Northeast   ME     December 2008  
                     
   

Prospective Capacity Subtotal

    182                
                     

Advanced

                     
 

Prattsburgh I

    54   Northeast   NY     2009  
 

Sheffield

    40   Northeast   VT     2009  
 

Stetson II

    25 * Northeast   ME     2009  
 

Rollins

    60   Northeast   ME     2009  
 

Oakfield

    49   Northeast   ME     2010  
 

Longfellow

    40   Northeast   ME     2010  
 

Grand Manan I

    19   Northeast   Canada     2009  
 

Milford I

    203   West   UT     2009  
 

Milford II

    200 * West   UT     2010  
 

Kahuku

    30   Hawaii   HI     2009  
                     
   

Prospective Capacity Subtotal

    720                
                     

Intermediate

                     
 

Grand Manan II

    100 * Northeast   Canada     2012+  
 

Kaheawa Wind Power II

    21 * Hawaii   HI     2010+  
 

Latah Wind

    150   West   WA     2011+  
 

Milford III

    200 * West   UT     2012+  
 

Palouse Wind

    75   West   WA     2011+  
 

New York I**

    50 * Northeast   NY     2010  
 

New York II**(2)

    30 * Northeast   NY     2010+  
 

New York III**

    37 * Northeast   NY     2011+  
                     
   

Prospective Capacity Subtotal

    663                
                     

Early

                     
 

Down East

    150   Northeast   ME     2011+  
 

Cascade

    80   West   OR     2012+  
 

Clover Ridge

    160   Northeast   NY     2011+  
 

Desert Sage Wind I

    700   West   NM     2012+  
 

Desert Sage Wind II

    1,200   West   NM     2013 - 2014+  
 

Garvie Mountain

    37   Northeast   Canada     2011+  
 

Grand View Winds

    150   West   CA     2011+  
 

Hawaii Expansion**

    250   Hawaii   HI     2012 - 2014+  
 

Ikaika Wind Power I

    50   Hawaii   HI     2011+  
 

Indigo Winds

    50   West   CA     2011+  
 

Maine I**

    80   Northeast   ME     2012+  
 

Milford IV

    200 * West   UT     2014+  
 

Milford V

    200 * West   UT     2015+  
 

Mojave Winds

    150   West   CA     2012+  
 

Windham

    50   Northeast   VT     2012+  
 

Wyoming Wind

    400   West   WY     2011 - 2014+  
                     
   

Prospective Capacity Subtotal

    3,907                
                     

Total Operating and Prospective Capacity of Portfolio

    5,564                
                     

*
Indicates the project is an expansion of a current operating/under-construction or advanced project. 225 MW of our 720 MW of advanced projects, 438 MW of our 663 MW of intermediate projects and 400 MW of our 3,907 MW of early projects represent expansions of current operating/under-construction or advanced projects.
**
Name withheld for competitive reasons.
(1)
The commercial operations dates of operating projects are actual; the commercial operations dates of under-construction and advanced projects are projected and the commercial operations dates of intermediate and early projects are estimated ranges. Actual dates of commercial operations may vary from these figures as it is difficult to project commercial operations dates due to uncertainties of the development process. Our ability to complete our projects and achieve anticipated capacities and anticipated dates of commercial operations is subject to a number of risks and uncertainties as described in the "Risk Factors" section of this prospectus.
(2)
We have the right to participate in up to 331/3% of the equity of this project.

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Risk Factors

        Investment in our Class A common stock involves substantial risks discussed in this prospectus, including under "Risk Factors." These risks include, but are not limited to, the following:

    The growth of our business depends upon our ability to convert our pipeline of projects under development into operating projects.

    We have generated substantial net losses and negative cash flow from operating activities since our inception and expect to incur substantial losses in the future as we develop and construct new wind energy projects.

    Our recurring losses from operations, negative operating cash flows, accumulated deficit and need to obtain adequate funding to procure wind turbines and fund capital expenditures raise substantial doubt as to our ability to continue as a going concern.

    We may not be able to finance the development of our business or the construction costs of building wind energy projects, without which we may never achieve profitability.

    A sustained decline in market prices for electricity or RECs may materially adversely affect our revenues and the growth of our business.

    The growth of our business depends upon the extension of the expiration date of the PTC, which currently expires on December 31, 2009, and other federal and state governmental policies and standards that support renewable energy development.

    One of our key turbine suppliers, Clipper Windpower, has a limited operating history, has experienced certain technical difficulties with its wind turbine technology and may continue to experience similar issues.

    We will continue to be controlled by our Sponsors after the completion of this offering, which will limit your ability to influence corporate activities and may adversely affect the market price of our Class A common stock.

Class A Common Stock and Class B Common Stock

        After the completion of the reorganization described below and this offering, our outstanding capital will consist of Class A common stock and Class B common stock. Our Class A common stock will be held by the investors in this offering as well as entities in the D. E. Shaw group. Our Class B common stock will be held by our Sponsors, certain of our employees and other existing investors. Our Class B common stock is, subject to certain limitations, convertible into Class A common stock at the election of the holders thereof and votes together with the Class A common stock as a single class. After the completion of the reorganization and this offering, our Sponsors will own    % of our outstanding Class A common stock and Class B common stock on a combined basis (            % if the underwriters exercise their option to purchase additional shares of Class A common stock in full) and will have effective control over the outcome of votes on all matters requiring approval by our stockholders. Our reorganization and new holding company structure are expected to increase our share of the tax basis in the tangible and intangible assets of First Wind Holdings, LLC. In addition, future exchanges of Class B common stock (together with the corresponding number of Series B Units) for shares of our Class A common stock are expected to result in additional increases in our tax basis. These increases in tax basis will increase the amount of depreciation we will recognize over time and accordingly reduce our taxable income. These increases in tax basis would not have been available but for the reorganization. We will be required to pay to exchanging holders of Series B Units a portion of these tax savings pursuant to our obligations under a tax receivable agreement. See "The Reorganization and Our Holding Company Structure—Tax Receivable Agreement."

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Holding Company Structure and Reorganization

        We were formed in contemplation of this offering and upon its completion all of our business and operations will continue to be conducted through First Wind Holdings, LLC, which owns all of our operating subsidiaries. We will be the sole managing member of First Wind Holdings, LLC. In connection with the reorganization we are completing immediately prior to this offering, all of the outstanding equity of First Wind Holdings, LLC will be either exchanged for our Class A common stock or reclassified into Series B Units of First Wind Holdings, LLC. Our Sponsors, certain of our employees and other existing investors will own all of First Wind Holdings, LLC's Series B Units, which have no voting rights, except with regard to certain amendments of First Wind Holdings, LLC's amended and restated limited liability company agreement that adversely affect the rights of holders of Series B Units. Each holder of the newly-classified Series B Units in First Wind Holdings, LLC will receive an equal number of shares of our Class B common stock. One Series B Unit and one share of Class B common stock are together convertible into one share of Class A common stock. Certain entities in the D. E. Shaw group have elected to receive Class A common stock in lieu of receiving Series B Units. For more detailed information regarding our reorganization and holding company structure, see "The Reorganization and Our Holding Company Structure."

        The graphic below illustrates our holding company structure and anticipated ownership immediately after the consummation of the reorganization and this offering (assuming no exercise of the over-allotment option).

CHART


(1)
The members of First Wind Holdings, LLC, other than us, will consist of our Sponsors and certain of our employees and current investors.
(2)
Each share of Class A common stock and Class B common stock is entitled to one vote per share. The Class A common stockholders will have the right to receive all distributions made on account of our capital stock, except for the right of the Class B common stockholders to receive their $0.0001 per share par value pari passu upon liquidation, dissolution or winding up. The D. E. Shaw group will hold Series B Units, Class A common stock and Class B common stock.
(3)
Series A Units and Series B Units will have the same economic rights per unit.

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Corporate Information

        We began developing wind energy projects in North America in 2002. We were founded by individuals who had successfully developed and operated wind energy projects in Italy and sought to apply their skills and experience in the rapidly growing markets of North America. Our principal executive offices are located at 85 Wells Avenue, Suite 305, Newton, Massachusetts 02459, and our telephone number is (617) 964-3340. We were incorporated in Delaware in May 2008. Our website is www.firstwind.com. We do not incorporate the information on our website into this prospectus and you should not consider any information on, or that can be accessed through, our website as part of this prospectus.

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The Offering

Class A common stock offered by us

              shares.

Class A common stock to be outstanding after this offering

 

            shares.

Class B common stock to be outstanding after this offering

 

            shares. Shares of our Class B common stock will be issued in connection with, and in equal proportion to, issuances of Series B Units of First Wind Holdings, LLC. When a Series B Unit is exchanged for a share of our Class A common stock or forfeited, the corresponding share of our Class B common stock will automatically be redeemed by us. See "The Reorganization and Our Holding Company Structure."

Underwriters' over-allotment option

 

            shares.

Use of proceeds

 

We expect to receive net proceeds from the sale of shares offered by us, after deducting estimated offering expenses and underwriting discounts and commissions, of approximately $     million, based on an assumed offering price of $     per share (the midpoint of the range set forth on the cover page of this prospectus). We intend to use our net proceeds from this offering to repay approximately $       million of outstanding indebtedness under one of our revolving credit facilities, to repay approximately $     million of outstanding indebtedness under one of our turbine supply loans and to fund a portion of our expected capital expenditures in 2008 and 2009.

Voting rights

 

Each share of our Class A common stock and Class B common stock will entitle its holder to one vote on all matters to be voted on by stockholders. Holders of our Class A common stock and Class B common stock will vote together as a single class on all matters presented to stockholders for their vote or approval, except as otherwise required by law. After the completion of the reorganization and this offering, our Sponsors will own    % of our outstanding Class A common stock and Class B common stock on a combined basis (        % if the underwriters exercise their option to purchase additional shares of Class A common stock in full) and will have effective control over the outcome of votes on all matters requiring approval by our stockholders.

Exchange of Series B Units

 

Pursuant to the amended and restated limited liability company agreement of First Wind Holdings, LLC, each fully-vested Series B Unit, together with a corresponding share of Class B common stock, will be exchangeable for a share of our Class A common stock as described under "The Reorganization and Our Holding Company Structure—Amended and Restated Limited Liability Company Agreement of First Wind Holdings, LLC."

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Dividend policy

  We do not anticipate that we will pay dividends in the foreseeable future. See "Dividend Policy."

Risk factors

 

For a discussion of factors you should consider in making an investment, see "Risk Factors."

Proposed Nasdaq Global Market symbol

 

"WNDY"

        The number of shares to be outstanding after this offering is based on        shares of Class A common stock outstanding as of                 , 2008 after giving effect to the reorganization. The number of shares to be outstanding after this offering excludes        additional shares of Class A common stock reserved for issuance under our long-term incentive plan.

        Unless we specifically state otherwise, the information in this prospectus assumes:

    the implementation of the reorganization and our holding company structure as described in "The Reorganization and Our Holding Company Structure;"

    the effectiveness of our certificate of incorporation and the adoption of our bylaws prior to the completion of this offering; and

    no exercise of the underwriters' option to purchase additional shares.

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Summary Financial and Operating Data

        The following tables present summary consolidated financial data as of and for the dates and periods indicated below. The summary consolidated statement of operations data for the years ended December 31, 2005, 2006 and 2007 and the summary consolidated balance sheet data as of December 31, 2006 and 2007 are derived from our audited consolidated financial statements included elsewhere in this prospectus. In their report dated July 29, 2008, which is also included in this prospectus, our independent registered public accounting firm stated that our consolidated financial statements as of and for the year ended December 31, 2007 were prepared assuming we would continue as a going concern; however, our recurring losses from operations, negative operating cash flows, accumulated deficit and need to obtain adequate funding to procure turbines and fund capital expenditures raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to obtain additional debt or equity financing, we may have to curtail our development activities or be forced to sell assets, perhaps on unfavorable terms, which would have a material adverse effect on our business, financial condition and results of operations. The summary consolidated statement of operations data for the six months ended June 30, 2007 and 2008 and the summary consolidated balance sheet data as of June 30, 2008 are derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus. The unaudited interim period financial information, in the opinion of management, includes all adjustments, which are normal and recurring in nature, necessary for the fair presentation of the periods shown.

        The summary unaudited pro forma consolidated financial data for the year ended December 31, 2007 and for the six months ended June 30, 2008 have been prepared to give pro forma effect to all of the reorganization transactions described in "The Reorganization and Our Holding Company Structure" and this offering as if they had been completed as of January 1, 2007 with respect to the unaudited consolidated pro forma statement of operations and as of June 30, 2008 with respect to the unaudited pro forma consolidated balance sheet data. These data are subject and give effect to the assumptions and adjustments described in the notes accompanying the unaudited pro forma financial statements included elsewhere in this prospectus. The summary unaudited pro forma financial data are presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the reorganization transactions and this offering been consummated on the dates indicated, and do not purport to be indicative of statements of financial condition data or results of operations as of any future date or for any future period. Pro forma net income (loss) per share is based on the weighted average common shares outstanding.

        The summary consolidated financial data set forth below should be read in conjunction with the "Unaudited Pro Forma Financial Information," "Selected Historical Financial and Operating Data," "Management's Discussion and Analysis of Financial Condition and Results of Operation" and the

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consolidated financial statements and related notes included elsewhere in this prospectus. Our historical results may not be indicative of the operating results to be expected in any future period.

 
   
   
   
   
   
   
  First
Wind
Holdings
Inc.
 
 
   
   
   
  First
Wind
Holdings
Inc.
  First Wind
Holdings, LLC
 
 
  First Wind Holdings, LLC  
 
  Six Months
ended June 30,
 
 
  Year ended December 31,  
 
  2005   2006   2007   Pro
Forma
2007
  2007   2008   Pro
Forma
2008
 
 
   
   
   
  (unaudited)
  (unaudited)
  (unaudited)
  (unaudited)
 
 
  (in thousands, except unit/share data and other operating data)
 

Statement of Operations Data:

                                           
 

Total revenues

  $ 72   $ 15,911   $ 12,346   $     $ 6,562   $ (7,437 ) $    
 

Cost of revenues

        3,284     17,975           8,837     9,113        
                               
   

Gross profit (loss)

    72     12,627     (5,629 )         (2,275 )   (16,550 )      
 

Total expenditures

    8,421     22,920     40,384           19,619     31,288        
                               
   

Loss from operations

    (8,349 )   (10,293 )   (46,013 )         (21,894 )   (47,838 )      
 

Risk management activities related to non-operating projects

    (6,784 )   (13,131 )   (21,141 )         (2,156 )   (34,635 )      
 

Other income

    19     282     843           262     29        
 

Interest expense, net of capitalized interest

    (2,803 )   (3,049 )   (9,585 )         (3,627 )   (3,352 )      
                               
   

Net loss before minority interest in operations of subsidiaries and cumulative effect of adoption of FIN 46R

    (17,917 )   (26,191 )   (75,896 )         (27,415 )   (85,655 )      
 

Minority interest in operations of subsidiaries

        176     7,825           1,106     16,681        
                               
   

Net loss before cumulative effect of adoption of FIN 46R

    (17,917 )   (26,015 )   (68,071 )         (26,309 )   (69,115 )      
 

Cumulative effect of adoption of FIN 46R(1)

    (703 )                        
                               
   

Net loss

  $ (18,620 ) $ (26,015 ) $ (68,071 ) $     $ (26,309 ) $ (69,115 ) $    
                               
 

Basic and diluted net loss attributable to common units

  $ (0.38 ) $ (0.24 ) $ (0.36 ) $   $ (0.14 ) $ (0.35 ) $  
                               
 

Basic and diluted weighted average number of common units

    49,095,347     107,712,405     189,161,855           182,432,532     197,239,108        
 

Pro forma net loss per share—
basic and diluted(2)

                         
 

Shares used in computing
pro forma net loss per
share—basic and diluted

                         

Other Financial Data:

                                           
 

Net cash provided by (used in):

                                     
 

Operating activities

  $ (3,195 ) $ (31,799 ) $ (26,370 )       $ (12,134 ) $ (16,106 )      
 

Investing activities

    (25,286 )   (311,281 )   (334,007 )         (107,222 )   (284,782 )      
 

Financing activities

    30,244     346,500     358,107           119,371     307,710        

Selected Operating Data (at year end):

                                           
 

Aggregate operating capacity

        30 MW     92 MW                          
 

Aggregate prospective capacity

    3,497 MW     3,222 MW     5,415 MW                          
 

Aggregate contracted turbines

    30 MW     319 MW     1,316 MW                          

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        The following table presents summary consolidated balance sheet data as of the dates indicated:

    on an actual basis;

    on a pro forma basis as of June 30, 2008 to give effect to all of the reorganization transactions described in "The Reorganization and Our Holding Company Structure;" and

    on a pro forma as adjusted basis as of June 30, 2008 to give further effect to our sale of              shares of common stock in this offering at an assumed initial public offering price of $        per share, the midpoint of the range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

 
  First Wind Holdings, LLC   First Wind
Holdings Inc.
 
 
  As of December 31,   As of
June 30,
2008

  Pro Forma
As of
June 30,
2008

  Pro Forma
As Adjusted
June 30,
2008

 
 
  2005
  2006
  2007
 
 
           
 
   
   
   
  (unaudited)
  (unaudited)
 
 
  (in thousands)
 

Balance Sheet Data:

                                     
 

Property, plant and equipment, net

  $ 484   $ 81,452   $ 192,076   $ 188,040   $     $    
 

Construction in progress

    29,075     85,153     346,320     463,566              
 

Total assets

    37,998     372,500     770,666     1,031,125              
 

Long-term debt, including debt with maturities less than one year

    35,195     257,884     465,449     701,031              
 

Members' capital/ stockholders' equity (deficit)

    (24,672 )   88,519     68,795     104,600              

(1)
We adopted Financial Accounting Standards Board ("FASB") Interpretation No. 46(R), Consolidation of Variable Interest Entities, an interpretation of ARB No. 51 ("FIN 46(R)") effective December 31, 2005, and as a result of being the primary beneficiary of certain variable interest entities ("VIEs"), were required to consolidate them in accordance with generally accepted accounting principles. FIN 46(R) defines a VIE as an entity in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents, absorbs a majority of the VIE's expected losses or receives a majority of the expected residual returns as a result of holding variable interests.

(2)
Pro forma basic and diluted net loss per share was computed by dividing the pro forma net loss attributable to our Class A common stockholders by the             shares of Class A common stock that we will issue and sell in this offering (assuming that the underwriters do not exercise their option to purchase an additional             shares of Class A common stock), plus            shares issued in connection with our initial capitalization, assuming that these            shares of Class A common stock were outstanding for the entirety of each of the historical periods presented on a pro forma basis. No pro forma effect was given to the future potential exchanges of the             Series B Units (and the corresponding number of shares of our Class B common stock) of our subsidiary, First Wind Holdings, LLC, that will be outstanding immediately after the consummation of this offering and the reorganization transactions for the corresponding number of shares of our Class A common stock because the issuance of shares of Class A common stock upon these exchanges would not be dilutive.

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RISK FACTORS

        You should consider carefully each of the risks described below, together with all of the other information contained in this prospectus, before deciding to invest in our Class A common stock. If any of the following risks occur, our business, financial conditions or results of operations may be materially and adversely affected. In that event, the trading price of our Class A common stock could decline, and you could lose all or part of your investment.

Risks Related to Our Business and the Wind Energy Industry

The growth of our business depends upon our ability to convert our pipeline of projects under development into operating projects.

        We began our business in August 2002 and we have a limited operating history from which you can evaluate our business. Our prospects must be considered in light of the risks and uncertainties encountered by growing companies competing in rapidly evolving markets, such as the renewable energy market. We may not be successful in completing our pipeline of development projects as anticipated or at all. As of August 31, 2008, our portfolio of wind energy projects included approximately 5,564 MW of operating and prospective capacity, of which 92 MW were operating and 182 MW were under construction. We expect to start construction on a 203 MW project in 2008. Our goal is to have approximately 1,100 MW of operating capacity by the end of 2010 and we target the construction and commissioning of approximately 400 MW annually thereafter to achieve approximately 2,300 MW of operating capacity by the end of 2013. The development and construction of wind energy projects involves numerous risks and uncertainties. These risks and uncertainties may prevent some projects from progressing to construction, may cause us to fail to meet the targets of our development plan and prevent us from achieving our goal of having approximately 2,300 MW of operating capacity by 2013. In addition we may elect not to proceed with a project currently in our portfolio. Our current portfolio of 5,564 MW of operating and prospective capacity does not include projects representing more than 1,700 MW of prospective capacity that we have, since 2004, actively considered and elected not to pursue. Finally, those projects that are constructed may not meet our return expectations due to schedule delays, cost overruns or revenue shortfalls or they may not generate the MW of capacity that we anticipate or result in receipt of revenue in the originally anticipated time period or at all.

        The design, construction and operation of wind energy projects are highly regulated activities requiring various material governmental and regulatory approvals and permits. Procedures for the granting of operating and construction permits vary by jurisdiction and certain jurisdictions may deny requests for permits for a variety of reasons. Further, we may not be able to renew construction and operating permits when required. Failure to procure and maintain the necessary permits may prevent ongoing development, construction and continuing operation of our projects. In addition, in some circumstances we may commence construction prior to obtaining all required permits, which exposes us to the risk that we may subsequently be unable to secure all of the permits required to complete the project. If this were to occur, we could experience considerable losses as a result of our prior investment.

        Our ability to develop wind energy projects is also contingent upon, among other things, negotiation of PPAs or access to liquid independent systems operator ("ISO") markets, availability of transmission lines with adequate capacity, turbine procurement, availability of financing, weather and satisfactory completion of construction, all of which may be beyond our control. Although we have entered into PPAs with utilities in many of the areas in which we are developing wind energy projects, we may not be able to secure additional PPAs for future projects. In addition, if we fail to construct a wind energy project in a timely manner or do not deliver electricity in accordance with the applicable PPA, the PPA may be terminated or we could be required to pay liquidated damages. In the past, we

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have experienced delays in project development due to the late receipt of turbines and inclement weather. In the future, we may experience similar or other project delays or project cancellations resulting from factors beyond our control.

        Negative public or community response to wind energy projects may adversely affect our ability to construct our projects in certain areas. In addition, legal challenges may result in an injunction against construction or operation, impeding our ability to place projects in operation according to schedule, meet our development and construction targets or generate revenues. Some of our wind energy projects are the subject of administrative and legal challenges from groups opposed to wind energy projects in general or groups concerned with potential environmental impacts or perceived impacts on property values. We expect such opposition and challenges to continue as we progress with development and construction of our existing projects and to increase as the number of projects we have in development and under construction increases. An increase in opposition to the granting of permits or unfavorable outcomes of such challenges could materially and adversely affect our development plans. If we are unable to complete our development projects or are unable to obtain necessary permits or are unable to enter into PPAs, access transmission lines with available capacity, secure turbines or obtain financing necessary to complete our development projects, we may not be able to install the MW of operating capacity that we currently anticipate from our development projects. A failure to install the MW of capacity that we target in our anticipated timeframe could have a material adverse effect on our business, financial condition and results of operations.

We have generated substantial net losses and negative cash flow from operating activities since our inception and expect to continue to incur substantial losses as we develop and construct new wind energy projects.

        Our business has generated substantial net losses and negative cash flows from operating activities since our inception. As of June 30, 2008, we had accumulated losses of approximately $185.5 million since our inception. For the year ended December 31, 2007 and the six months ended June 30, 2008, we generated net losses of $68.1 million and $69.1 million, respectively, and our operating activities used cash of $26.4 million and $16.1 million at December 31, 2007 and June 30, 2008, respectively. In the near term, we expect that our net losses and cash used in operating activities will increase as compared to prior periods as we increase our development activities.

        We expect to continue to incur substantial losses as we develop and construct new wind energy projects, hire additional employees, expand our operations and incur the additional costs of operating as a public company. In addition, factors such as: increases in the costs of labor or materials; higher than anticipated financing costs for our wind energy projects; non-performance by third-party suppliers or subcontractors and major incidents and/or catastrophic events, such as fires, earthquakes or storms, may cause us to experience increased costs with respect to our wind energy projects. As a result, our net losses and accumulated deficit may also increase significantly. To date, our capital expenditures and working capital requirements have been funded by debt, tax equity financing and equity capital. We expect to fund our future capital requirements out of debt and tax equity financing and additional equity capital. If we are unable to raise additional capital, we may have to reduce or terminate our operations.

Our recurring losses from operations, negative operating cash flows, accumulated deficit and need to obtain adequate funding to procure wind turbines and fund capital expenditures raise substantial doubt as to our ability to continue as a going concern.

        In their report dated July 29, 2008, which is also included in this prospectus, our independent registered public accounting firm stated that our consolidated financial statements as of and for the year ended December 31, 2007 were prepared assuming we would continue as a going concern; however, our recurring losses from operations, negative operating cash flows, accumulated deficit and need to obtain adequate funding to procure turbines and fund capital expenditures raise substantial

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doubt about our ability to continue as a going concern. Although our consolidated financial statements have been prepared on a going concern basis (which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future), we may not be able to continue as a going concern if we are unable to raise additional debt or equity financing. Our consolidated financial statements do not give effect to any adjustments that would be necessary should we be unable to continue as a going concern and, therefore, be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in our consolidated financial statements. If we are unable to obtain additional debt or equity financing, we may have to curtail our development activities or be forced to sell assets, perhaps on unfavorable terms, which would have a material adverse effect on our business, financial condition and results of operations. If such doubts persist, or if further doubts are raised, about our ability to continue as a going concern notwithstanding the completion of this offering, our stock price could drop and our ability to raise additional funds, to obtain credit on commercially reasonable terms or to remain in compliance with covenants that we have in place with current lenders may be adversely affected. If such were to be the case, our audit report for 2008 could contain a similar explanatory paragraph.

A sustained decline in market prices for electricity or RECs may materially adversely affect our revenues and the growth of our business.

        We may not be able to develop our pipeline of development projects economically if there is a sustained material decline in market prices for electricity. Electricity prices are affected by various factors and may decline for many reasons that are not within our control, including changes in the cost or availability of fuel, regulation and acts of governments and regulators, changes in supply of generation capacity, changes in power transmission or fuel transportation capacity, seasonality, weather conditions and changes in demand for electricity. In addition, other power generators may develop alternative technologies to produce power, including fuel cells; clean coal and coal gasification; micro turbines; photovoltaic (solar) cells or tidal current based generators, or improve upon traditional technologies and equipment, such as more efficient gas turbines or nuclear or coal power plants with simplified and safer designs, among others. Advances in these or other technologies could cause a sustained decline in market prices for electricity. If there is a sustained decline in the market prices of electricity, we may not develop and construct our pipeline of development projects and grow our business, which would have a material adverse effect on our revenues. Similarly, if there is a sustained material decline in REC prices, we may not be able to achieve expected revenues, which would have an adverse effect on the investment returns on our projects.

The growth of our business depends upon the extension of the expiration date of the PTC, which currently expires on December 31, 2009, and other federal and state governmental policies and standards that support renewable energy development.

        We depend heavily on government policies supporting renewable energy, including the PTC, that enhance the economic feasibility of developing wind energy projects. The PTC is currently scheduled to expire on December 31, 2009. The PTC currently provides a $21 federal tax credit/MWh for a renewable energy facility that uses wind, geothermal or closed-loop biomass fuel sources in each of the first ten years of its operation and applies to facilities that are placed in service before the end of 2009. These facilities will continue to benefit from the current PTC incentive until the end of the ten-year period from the date on which the wind turbines are placed in service. If the PTC is not extended or renewed, we would be unable to use tax equity financing structures, which could render certain of the projects in our development portfolio uneconomic, increase our financing costs and otherwise adversely affect our financing efforts, increase our equity requirements and adversely affect our growth.

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        In addition to the PTC, we rely on other incentives that support the sale of energy generated from renewable sources, including state adopted RPS programs, which vary among states, but generally require power suppliers to provide a minimum percentage or base amount of electricity from specified renewable energy sources for a given period of time. RPS programs often operate in tandem with a credit trading system through which generators can buy or sell RECs that are issued by the state to generators of renewable energy to meet mandated renewable requirements.

        While federal and state governments have promoted renewable energy in the past, policies may be adversely modified or support of renewable energy development, particularly wind energy, may not continue. If governmental authorities fail to continue supporting, or reduce their support for, the development of renewable energy projects, particularly wind energy projects, it could materially adversely affect our ability to develop and construct our pipeline of development projects and grow our business.

One of our key turbine suppliers, Clipper Windpower, has a limited operating history, has experienced certain technical issues with its wind turbine technology and may continue to experience similar issues.

        Clipper Windpower, one of our two turbine suppliers, is a new entrant into the wind turbine market. Clipper Windpower's first prototype wind turbine, the 2.5 MW Liberty™, was placed in service in April 2005. We deployed the first eight commercially produced Liberty™ turbines at our Steel Winds I project, which commenced commercial operations on June 1, 2007. During the first year of commercial operations, the Liberty™ turbine drive trains were found to have a supplier-related deficiency, resulting in a prolonged shutdown of a number of turbines. In addition, in December 2007, following discovery of separation of bonding materials in the blades of several Liberty™ turbines at Steel Winds I, Clipper Windpower initiated a blade reinforcement program to increase blade design margins and ensure a 20-year design life.

        These technical issues significantly and adversely affected the performance of the Steel Winds I project during its first 11 months of operation. As of May 17, 2008, all Liberty™ drive trains at Steel Winds I had been replaced, all Steel Winds I blades had been reinforced and all turbines had been returned to full commercial service. In addition, between May 17, 2008 and August 31, 2008, the cumulative performance of the turbines at Steel Winds I has been consistent with Clipper Windpower's availability warranty applicable to Steel Winds I. However, the Liberty™ turbines may not perform in accordance with Clipper Windpower's specifications for their anticipated useful life or may require additional warranty repairs. For example, on September 24, 2008, Clipper Windpower publicly announced that minor defects in the blade skin resulting from a defective manufacturing process were detected in a limited number of Liberty™blades during routine inspections at a wind energy project not owned by us. Although we have not observed these defects in any of the Liberty™ blades at any of our wind energy projects to date, this defect may manifest itself at Cohocton I and Steel Winds I. Clipper Windpower has advised us that the blade supplier's defective manufacturing process has been remediated and a corrective solution will be implemented for blades experiencing skin defects. To the extent that skin defects are observed at Cohocton I or Steel Winds I, we may experience an adverse effect on revenues derived from those wind energy projects while remediation measures are implemented. In addition, the initial failure of performance may adversely affect our ability to arrange and close turbine supply loans, tax equity financing transactions or construction loans involving Liberty™ turbines. Moreover, Clipper Windpower may not be able to fund the obligations it may owe us or its other customers under its outstanding warranty agreements.

        In addition to the Clipper Windpower turbines we have deployed at our Steel Winds I project, we have entered into purchase contracts for approximately 395 Liberty™ turbines, which are scheduled to be delivered or commissioned between 2008 and 2013, and our growth is substantially dependent on the performance of the Liberty™ turbines we receive. Moreover, in order to meet its delivery obligations to us and other customers, Clipper Windpower must be successful in significantly increasing

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production over current levels, and we cannot predict what impact, if any, the Liberty™ performance issues described above will have on the growth of Clipper Windpower's production.

        A failure of Clipper Windpower to produce Liberty™ turbines that perform within design specifications will preclude us from completing projects incorporating Clipper Windpower technology. Due to the large number of Liberty™ turbines we intend to deploy at our development projects, any such failure could have a material adverse effect on our business, financial condition and results of operations.

We are materially dependent on tax equity financing arrangements.

        In 2007, we entered into two tax equity financing transactions in which we received an aggregate of $146.3 million from tax equity investors in return for investments in our projects, entitling the tax equity investors to substantially all of the applicable project's related operating cash flow from electricity sales and related hedging agreements, PTCs and taxable income or loss until they achieve their agreed rates of return, which we expect to occur in ten years. In January 2008, we executed an agreement for an additional $208.0 million tax equity financing related to a portfolio of our New York projects. Funding of this tax equity financing will occur in tranches upon commencement of commercial operations of each applicable project and the satisfaction of certain other conditions precedent, including commencement of commercial operations of each applicable project by the end of 2009. In August 2008, $19.7 million was funded with respect to our Steel Winds I project. Our counterparty in this tax equity financing is an indirect subsidiary of Lehman Brothers Holdings, Inc., which filed for bankruptcy on September 15, 2008. We are uncertain what impact the bankruptcy will have on the funding of the balance of this financing. We are currently in discussions with other tax equity investors to fund the balance of this financing if and to the extent our counterparty is unable to fund its remaining commitment when due. We may not, however, be able to find financing on similar terms or at all, and the failure to find replacement financing could have a material adverse effect on our business, financial condition and results of operations.

        Our ability to enter into tax equity arrangements in the future depends on the extension of the expiration date or renewal of the PTC, without which the market for tax equity financing would likely cease to exist. Moreover, there are a limited number of potential tax equity investors, they have limited funds and wind energy developers compete with other renewable energy developers and others for tax equity financing. In addition, current and developing conditions in financial and credit markets generally could result in the contraction of available tax equity financing. As the renewable energy industry expands, the cost of tax equity financing may increase and there may not be sufficient tax equity financing available to meet the total demand in any year. If we are unable to enter into tax equity financing agreements with attractive pricing terms or at all, we may not be able to use the tax benefits provided by PTCs and accelerated tax depreciation, which could have a material adverse effect on our business, financial condition and results of operations.

        In a typical tax equity financing, we expect to receive an up-front cash payment of approximately 50-60% of a project's costs in exchange for an equity interest in our subsidiary that owns the project. These equity interests entitle the investors to receive a substantial portion of the project's cash distributions from electricity sales and related hedging agreements, PTCs and taxable income or loss until such investors reach an agreed rate of return on their up-front cash payment, which we typically expect to occur in ten years. As a result, a tax equity financing substantially reduces the cash distributions from the applicable projects available to us for other uses, and the period during which the tax equity investors receive substantially all of the cash distributions from electricity sales and related hedging agreements may last longer than expected if our wind energy projects perform below our expectations.

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        In addition, our tax equity financing agreements provide our tax equity investors with a number of approval rights with respect to the applicable project or projects, including approvals of annual budgets, indebtedness, incurrence of liens, sales of assets outside the ordinary course of business and litigation settlements. As a result of these restrictions, the manner in which we conduct our business may be limited. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Results of Operations—Financing upon commencement of commercial operations—Tax equity financing."

We may not be able to finance the development of our business or the construction costs of building wind energy projects, without which we may never achieve profitability.

        We are in a capital intensive business and we do not have sufficient funds to finance the growth of our business or the construction costs of our development projects or to support our projected capital expenditures of approximately $1.4 billion in the aggregate for 2008 and 2009, respectively. Our projects in development and construction entail significant capital expenditures and construction costs, and recovery of the capital investment in a wind energy project generally occurs over a lengthy period of time. The capital investment required to develop and construct a wind energy project is primarily based on the costs of fixed assets required for the project. The prices of turbines and electrical and other equipment have increased in recent years and may continue to increase as the demand for such equipment increases more rapidly than supply, or if the prices of key components and raw materials used to build the equipment increase. As a result, we will require additional funds from further equity or debt financings, including tax equity financing transactions, to complete the development and construction of our existing projects, to fund our capital expenditures, to identify and carry out development of new projects and to pay the general and administrative costs of operating our business. Current and developing conditions of significant volatility and illiquidity in credit markets and capital markets generally may adversely affect our ability to obtain financing on acceptable terms or at all. If we are unable to raise additional funds when needed, we may be required to delay development and construction of our wind energy projects, reduce the scope of our projects, and/or abandon or sell some or all of our development projects, any of which would adversely affect our business, financial position and results of operations.

Our hedging strategy may not adequately manage our commodity price risk, may expose us to significant losses and may limit our ability to benefit from higher electricity prices.

        Our ownership and operation of wind energy projects exposes us to volatility in market prices of electricity and RECs. In an effort to stabilize our returns from electricity sales, we carefully review the electricity sale options for each of our development projects. As part of this review, we assess the appropriateness of entering into a fixed price PPA and/or a financial hedge. If we sell our electricity into a liquid ISO market, we enter into a financial hedge with institutional investors in order to stabilize our projected revenue stream. Under the terms of our existing financial hedges, we are not obligated to physically deliver or purchase electricity, but we receive payments for certain quantities of electricity based on a fixed price and are obligated to pay the market electricity price for the same quantities of electricity. Thus, if market prices of electricity increase, we are obligated to make payments under these financial hedges. For example, we entered into an oil swap to hedge a variable revenue component of our PPA for our Kaheawa Wind Power I project that is based on the estimated costs that our counterparty avoids in substituting our electrical production for the production it otherwise would have to generate by burning fossil fuels. This hedge agreement involves periodic notional quantity settlements in which we pay a monthly amount equal to the product of (a) the prevailing market price of WTI crude oil on NYMEX and (b) a notional quantity of oil; and we receive a monthly amount equal to the product of (x) a specified fixed price and (y) such notional quantity. Because WTI crude oil prices have increased substantially since we entered into our hedge, we have

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made payments of $5.1 million associated with this oil swap from inception of the swap through June 30, 2008 and had a mark-to-market liability of $32.8 million as of June 30, 2008.

        These financial hedges cover quantities of electricity that we estimate we can produce with a high degree of certainty. As a result, gains or losses under the financial hedges should be offset by decreases or increases in our revenues from spot sales of electricity in liquid ISO markets. However, the actual amount of electricity we generate from operations may be materially different from our estimates for a variety of reasons, including variable wind conditions and turbine availability. To the extent actual amounts produced fall short of the quantities covered in our financial hedges, we will not be hedged and we will be exposed to commodity price risk. In the event a project does not generate the amount of electricity covered by the related hedge, we could incur significant losses under the financial hedge if electricity prices rise substantially above the fixed prices provided for in the hedge. For example, as a result of delays in commencing operations of our Prattsburgh I project, we have incurred aggregate costs of approximately $0.3 million to extend the forward start date under the swap contracts we entered into with respect to that project. If a project generates more electricity than is covered by the relevant hedge, the excess production will not be hedged and the revenues we derive will be subject to market price fluctuations.

        We often seek to sell forward a portion of our RECs in an effort to hedge against future declines in REC prices. If our projects are unable to generate the amount of electricity required to earn the RECs sold forward or if we are unable for any reason to qualify our electricity for RECs in relevant states, we may incur significant losses.

        We have not applied hedge accounting treatment to our hedging activities under Statement of Financial Accounting Standard ("SFAS") No. 133; therefore, we are required to mark our hedges to market through earnings on a periodic basis, which may result in non-cash adjustments to and volatility in our earnings, in addition to potential cash settlements for any losses. For example, we have had to mark-to-market the value of our commodity swaps for Kaheawa Wind Power I, Steel Winds I, Cohocton I and Prattsburgh I under SFAS No. 133 on a periodic basis, which has resulted in our quarterly and annual financial results reflecting changes in the value of these instruments based on changes in the underlying commodity prices.

        We often are required to post cash collateral and issue letters of credit for our obligations under our hedging arrangements, which reduce the available borrowing capacity under the credit agreements under which these letters of credit are issued. We have been and may in the future be required to post additional cash collateral or issue additional letters of credit if electricity and oil prices continue to rise. For example, because of rising electricity prices, our letters of credit covering our obligations under our electricity swaps for Cohocton I and Prattsburgh I increased from $7.5 million on December 31, 2007 to $42.9 million on June 30, 2008.

        In addition, our financial hedges expose us to counterparty credit risk (i.e., the risk that our counterparties may fail to fulfill their payment and other obligations under the contractual terms of our hedges). Counterparty credit risk has increased, given the current and developing conditions in credit markets. We intend to manage counterparty credit risk by assessing the credit standing of our counterparties and entering into hedges only with major financial institutions with high credit ratings if possible, but these efforts may not be sufficient to limit our exposure and potential for loss.

        Our inability to effectively manage market risks and our hedging activities may have a material adverse effect on our business, financial condition or results of operations. In addition, our hedging activities may also limit our ability to realize the full benefit of increases in electricity prices and RECs.

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The growth of our business is dependent on the availability of turbines and turbine financings.

        Wind energy projects require delivery and assembly of turbines. We may encounter supply and/or logistical issues in securing turbines due to the limited number of turbine suppliers and current high demand for turbines. To date, GE Energy and Clipper Windpower have been our only suppliers of turbines, and they have agreed to deliver and commission turbines with an aggregate generating capacity in excess of 1,300 MW through 2013. To meet our targeted operating capacity of approximately 2,300 MW by 2013, we must secure additional turbines with approximately 1,000 MW of generation capacity. In the future, we may not be able to purchase a sufficient quantity of turbines from our suppliers, and our suppliers may give priority to other customers. Our turbine suppliers may delay the performance of or be unable to meet contractual commitments or components and equipment may be unavailable, which would have a material adverse effect on our business, financial condition and results of operations.

        In addition, we must obtain third-party turbine supply loans or otherwise secure financing for our turbine purchases, which account for the majority of the total cost of a wind energy project. We expect to expend approximately $418.2 million and approximately $293.1 million on turbines in 2008 and 2009, respectively. In addition, we have commitments to spend approximately $630.1 million on turbines from 2010 to 2013. These commitments represent our single largest financial obligation. To date, we have initially financed these purchases largely through turbine supply loans. An inability to obtain such financing on attractive terms in the future may preclude us from obtaining additional turbines, severely limiting our growth, and would cause us to default under our turbine supply agreements. Moreover, a significant increase in the cost of obtaining such financing could have a material adverse effect on the investment returns we achieve from our projects.

        In addition, spare parts for wind turbines and key pieces of electrical equipment may be unavailable to us. The sources for two significant spare parts for wind turbines, gear boxes and blades, are located outside of North America. If we were to experience a serial failure of either spare part we would incur delays in waiting for shipment of these items to delivery ports in the U.S. In addition, we do not carry spare substation main transformers. These transformers are designed specifically for each wind energy project, and the current lead time to order this equipment is approximately one year. If we have to replace any of our transformers, we would be unable to sell electricity from the affected wind energy project for more than one year.

        Our inability to secure turbines or third-party turbine supply loans, an impairment or loss of our relationship with either GE Energy or Clipper Windpower or their failure to timely deliver turbines could have a material adverse effect on the growth of our business and/or financial condition and results of operations.

We have a substantial amount of indebtedness maturing in less than one year, which may adversely affect our cash flow and our ability to operate our business, remain in compliance with debt covenants and make payments on our indebtedness.

        As of June 30, 2008, we had outstanding indebtedness of approximately $701.0 million, which represented approximately             % of our total debt and equity capitalization of $             million (after giving effect to this offering), including:

    $444.5 million of debt under turbine supply loans; and

    $256.5 million of other debt used to fund development, construction and general and administrative expenses.

        Of this amount, $679.4 million of our outstanding indebtedness matures prior to June 30, 2009 and we may not be successful in our efforts to extend the maturity of our indebtedness or to otherwise successfully refinance current maturities. Currently, certain of our existing investors have guaranteed

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up to $350.0 million of our borrowings and we expect those guarantees to be released upon the closing of this offering. Because we will no longer have these guarantees of our indebtedness, we may face higher borrowing costs on future indebtedness or a material revision of the terms of our borrowings.

        Our substantial indebtedness could have important consequences to you. For example, it could:

    make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including financial and other restrictive covenants, could result in an event of default under the agreements governing our indebtedness;

    require us to dedicate a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for working capital, capital expenditures, acquisitions, paying our tax equity investors and other general corporate purposes;

    limit our flexibility in planning for and reacting to changes in the wind energy business;

    make us more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

    limit our ability to borrow additional amounts for working capital, make capital expenditures and/or acquisitions, meet our debt service requirements, execute our growth strategy or continue developing and constructing projects; and

    place us at a disadvantage compared to competitors who have less debt.

        Any of these consequences could materially and adversely affect our business, financial condition and results of operations. If we do not have sufficient revenues to service our debt, we may be required to refinance all or part of our existing debt, sell assets, borrow additional amounts or sell securities, which we may not be able to do on favorable terms, or at all. In addition, increases in interest rates and changes in debt covenants may reduce the amounts that we can borrow, reduce the net cash flow generated by our projects and increase the equity investment we may be required to make to complete construction of our projects. These increases may cause some of our projects to become infeasible.

If our subsidiaries default on their obligations under their recourse or limited recourse debt financings, we may be required to make certain payments to the relevant lenders or these lenders may foreclose on the collateral securing this debt, which could cause us to lose certain assets, including our wind energy projects.

        Our debt consists primarily of recourse and limited recourse debt. We also have non-recourse debt, which is repaid solely from the applicable project's revenues and is secured by the project's physical assets, major contracts, cash accounts and, in many cases, our ownership interest in the project subsidiary. Recourse debt refers to debt for which we have provided a guarantee. Limited recourse debt refers to debt for which we have provided a limited guarantee. If our subsidiaries default on their obligations under the relevant financing agreement, creditors of recourse debt will have direct recourse to us and creditors of limited recourse debt will have direct recourse to us to the extent of our limited recourse obligations. This may require us to use distributions received by our other subsidiaries as well as other sources of cash available to us to satisfy these obligations. In addition, if our subsidiaries default on their obligations under the relevant financing agreement and the creditors foreclose on the relevant collateral, we may lose our ownership interest in the relevant subsidiary or some or all of its assets. The loss of our ownership interest in one or more of our subsidiaries could have a material adverse effect on our business, results of operations and financial condition.

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Our wind energy projects' use and enjoyment of real property rights obtained from third parties may be adversely affected by the rights of lienholders and leaseholders whose rights are superior to those of the grantors of these real property rights.

        Each of our wind energy projects is or will be located on land occupied pursuant to various easements and leases. Our rights pursuant to these easements and leases allow us to install wind turbines, related equipment and transmission lines for the projects and to operate the projects. The ownership interests in the land subject to these easements and leases may be subject to mortgages securing loans or other liens (such as tax liens) and other easement and lease rights of third parties (such as leases of oil, gas, coal or other mineral rights) that were created prior to our easements and leases. As a result, our rights under these easements or leases may be subject and subordinate to the rights of such third parties.

        A default by a landowner at one or more of our wind energy projects under a mortgage could result in foreclosure of the landowner's property and thereby terminate our easements and leases required to operate the projects. Similarly, it is possible that another lienholder, such as a government authority with a tax lien, could foreclose upon a parcel and take ownership and possession of the portion of the project located on that parcel. In addition, the rights of a third party pursuant to a superior lease could result in damage to or disturbance of the equipment at a project, or require relocation of project assets.

        If any of our wind energy projects were to suffer the loss of all or a portion of its wind turbines or related equipment as a result of a foreclosure by a mortgagee or other lienholder of a land parcel, or damage arising from the conduct of superior leaseholders, our operations and revenues could be adversely affected.

If operating costs exceed those projected for any wind energy project, the cash flow available from that project will be adversely affected, which may have an adverse impact on our results of operations and financial condition.

        Our wind energy projects are exposed to numerous operational risks, including the impact of force majeure events, turbine breakdowns, electricity network and other utility service failures and other unanticipated events. The cost of repairing or replacing damaged equipment may be considerable, and repeated or prolonged interruption may result in termination of contracts, litigation and substantial damages or penalties for regulatory or contractual non-compliance, reduced cash flows and increased financing costs. Moreover, these amounts may not be recoverable under insurance policies or contractual claims and, in relation to network failures, network service providers and market operators may also benefit from contractual limitations of liability, which would reduce any recovery of damages from them.

The growth of our business depends on locating and obtaining control of suitable operating sites.

        Wind energy projects require wind conditions that are found in limited geographic areas and particular sites. Further, wind energy projects must be interconnected to electricity transmission or distribution networks in order to deliver electricity. Once we have identified a suitable operating site, our ability to obtain requisite land control or other land rights (including access rights, setback and/or other easements) with respect to the site is subject to growing competition from other wind energy producers that have sufficient financial capacity to research, locate and obtain control of such sites and to obtain required electrical interconnection rights. Our competitors may impede our development efforts by acquiring control of all or a portion of a project site we desire to develop or obtaining a right to use land necessary to connect a project site to a transmission or distribution network. If a competitor obtains land rights critical to our project development efforts, we could incur losses as a result of stranded development costs. If we succeed in securing the property rights necessary to

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construct and interconnect our projects, such property rights must be insurable and otherwise satisfactory to our financing counterparties. Obtaining adequate property rights may delay development of a project, or may not be feasible. Any failure to obtain insurable property rights that are satisfactory to our financing counterparties would preclude our ability to obtain third-party financing and could prevent ongoing development and construction of the relevant projects.

We rely on a limited number of key customers.

        We depend on sales of electricity and RECs to certain key customers, and our operations are highly dependent upon such customers' fulfilling their contractual obligations under our PPAs and other material sales contracts. For example, 87% of our revenues were generated from sales of electricity under PPAs with two key customers in 2007. Our customers may not comply with their contractual payment obligations or may become subject to insolvency or liquidation proceedings during the term of the relevant contracts, and the credit support received from such customers may not be sufficient to cover our losses in the event of a failure to perform. An inability or failure by such customers to meet their contractual commitments or insolvency or liquidation of our customers could have a material adverse effect on our business, financial position and results of operations.

Our electricity may cease to qualify for Massachusetts RECs.

        A significant portion of our revenues is expected to be generated from our Northeast projects that have access to Massachusetts RECs. Massachusetts recently enacted a new energy law, which may adversely affect REC qualifications for projects outside the New England Independent Systems Operator ("ISO-NE"). Enabling regulations are currently being considered that will determine whether our existing Northeast operations will be "grandfathered" and continue to qualify for Massachusetts REC sales. If our electricity generated by projects located outside ISO-NE (including our projects under development in Maine and Canada) no longer qualifies for Massachusetts RECs, we will be forced to qualify our electricity in other states with less attractive REC prices. If our operations are not grandfathered and if our other efforts to connect our Northeast projects directly into ISO-NE fail, these changes could have a material adverse effect on our business, financial condition and results of operations.

Our development activities and operations are subject to environmental regulation and risks from environmental, safety and other hazards.

        We are subject to various safety, environmental and natural resource protection laws and regulations in each of the jurisdictions in which we operate. These laws and regulations require us to obtain and maintain permits and approvals, undergo environmental review processes and implement required environmental, health and safety programs and procedures to control risks associated with the siting, construction, operation and decommissioning of wind energy projects. We cannot predict whether all permits required for a given project will be granted, whether the conditions associated with such permits will be achievable or whether such permits will be the subject of significant opposition. The denial of a permit essential to a project or the imposition of conditions with which it is not practicable or feasible to comply could impair or prevent our ability to develop a project. Significant opposition and delay in the environmental review and permitting process also could impair or delay our ability to develop a project.

        If we fail to comply with our permits, we may be required to pay fines or curtail production at our facilities. Violations of environmental laws in certain jurisdictions, including with respect to certain violations of laws protecting migratory birds and endangered species, may also result in criminal penalties.

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        We have incurred and will continue to incur capital and operating expenditures and other costs in the ordinary course of business in complying with safety and environmental laws and regulations in the jurisdictions in which we operate. In addition, we may incur costs outside of the ordinary course of business to compensate for any environmental or other harm caused by our facilities, which may have a material adverse effect on our business, financial condition and results of operations.

We generally rely on transmission lines and other transmission facilities that are owned and operated by third parties. Where we develop our own transmission lines, we are exposed to transmission line development risk, which may delay and increase the costs of our projects.

        We often depend on electric transmission lines owned and operated by third parties to deliver the electricity we sell. Some of our wind energy projects have limited access to interconnection and transmission capacity where there are many parties seeking access to the capacity that is available. We may not be able to secure access to the limited available interconnection or transmission capacity at reasonable prices or at all. Moreover, in the event of a failure in the transmission facilities, we may experience lost revenues. In addition, transmission limitations may cause us to curtail our production of electricity, impairing our ability to fully capitalize on the particular wind energy project's potential. Any such failure could have a material adverse effect on our business, financial condition or results of operations.

        In certain circumstances, we will develop long transmission lines from our projects to nearby electricity transmission or distribution networks when such lines do not already exist. In some cases, these lines may cover significant distances. In order to construct such lines, we must secure requisite approvals, permits and land rights, which may be difficult or impossible to acquire or may require significant expenditures to acquire. We may not be successful in these activities and our projects that rely on such transmission development may be delayed or increase in cost. In addition, we may be required by law or regulation to provide service to third parties at regulated rates, which could potentially constrain transmission of our power on these lines.

Our projects may not be ready for turbine installation at the time we receive turbines under our turbine supply agreements, and the turbine warranties we purchase from our turbine suppliers to protect against turbine non-performance have limited coverage and include time limits and caps on damages.

        To secure a reasonably constant supply of turbines, we have entered into long-term turbine supply agreements, under which we are obligated to pay for and accept turbines at various times irrespective of our need for such turbines at such times. We are not able to predict the precise timing of our need for turbines, and, accordingly, we may be forced to purchase and accept turbines under our turbine supply agreements at a time when we do not have a project site that is ready for installation, resulting in expenditures without a near-term opportunity to generate project revenues.

        When we purchase our turbines, we also enter into warranty agreements with the manufacturer. Damages payable by the manufacturer under these agreements are typically subject to an aggregate maximum cap that is a portion of the total purchase price of the turbines. Losses in excess of these caps will be our responsibility. Since our turbine warranties generally expire within a certain period of time after the turbine delivery date or the date such turbine is commissioned, we may lose all or a portion of the benefit of the warranties if we are unable to deploy turbines we have purchased upon delivery.

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We may be unable to timely complete the construction of our wind energy projects, and our construction costs could increase to levels that could make a new wind energy project too expensive to complete or unprofitable to operate.

        We may experience delays in the completion of our wind energy projects and the total construction cost of these wind energy projects may exceed our initial budget. We may suffer significant construction delays or construction cost increases as a result of a variety of factors, including:

    failure to receive turbines or other critical components and equipment from third parties on schedule and according to design specifications;

    failure to complete interconnection to transmission networks;

    failure to receive quality and timely performance of third-party services;

    failure to secure and maintain required regulatory and environmental permits or approvals;

    inclement weather conditions;

    adverse environmental and geological conditions; and

    force majeure or other events out of our control with respect to our wind energy projects.

        Any of these factors could give rise to construction delays and construction costs in excess of our budgets, which could prevent us from completing construction of a project, cause defaults under our financing transactions and impair our business, financial condition and results of operations.

The loss of one or more members of our senior management or key employees may adversely affect our ability to implement our strategy.

        We depend on our skilled and experienced management team and the loss of one or more key executives could have a negative impact on our operations. We also depend on our ability to retain and motivate key employees and attract qualified new employees in order to meet our business objectives. If we lose a member of the management team or a key employee, we may not be able to replace him or her. We maintain "key man" insurance on certain of these individuals, which may not insure us against all potential losses in the event of his or her death or disability. Integrating new employees into our management team could prove disruptive to our daily operations, require a disproportionate amount of resources and management attention and ultimately prove unsuccessful. An inability to attract and retain sufficient technical and managerial personnel could limit or delay our development efforts, which could have a material adverse effect on our business, financial condition and results of operations.

Technological changes in the energy industry could render existing wind energy projects and technologies uncompetitive or obsolete.

        The energy industry is rapidly evolving and is highly competitive. Technological advances may result in lower costs for sources of energy, and may render existing wind energy projects and technologies uncompetitive or obsolete. Our failure to adopt new technologies as they are developed could have a material adverse affect our business, financial condition and results of operations.

Wind energy project revenues are highly dependent on suitable wind and associated weather conditions.

        The energy and revenues generated at a wind energy project are highly dependent on climatic conditions, particularly wind conditions, which are variable and difficult to predict. Turbines will only operate within certain wind speed ranges that vary by turbine model and manufacturer, and there is no assurance that the wind resource at any given project site will fall within such specifications.

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        We base our investment decisions with respect to each wind energy project on the findings of wind studies conducted on-site before starting construction. However, actual climatic conditions at a project site, particularly wind conditions, may not conform to the findings of these wind studies, and, therefore, our wind energy projects may not meet anticipated production levels, which could adversely affect our forecasted profitability.

        We currently have only three wind energy projects in operation, and we anticipate having only a limited number of wind energy projects in operation over the next two years. As a result, our operations may be subject to material interruption if any of our wind energy projects is damaged or otherwise adversely affected by one or more accidents, severe weather or other natural disasters. Earthquakes, hurricanes, tornados, lightning strikes, floods, severe storms, wildfires or other exceptional weather conditions or natural disasters could damage our wind energy projects and related facilities and decrease production levels. These events could have a material adverse effect on our revenues, particularly to the extent that they affect multiple wind energy projects and project sites.

Weather and atmospheric conditions and operational factors may reduce energy production below our projections.

        When we develop a wind energy project, we evaluate the quality of the wind resources at the selected site through a number of means, and we retain third-party experts to assist us in this evaluation. We use the wind data that we gather on-site and data collected through other sources to develop projections of the wind energy project's performance, revenue generation, operating profit, debt capacity, tax equity capacity and return on investment, which are fundamental elements of our business planning. Wind resource projections at the start of commercial operations can have a significant impact on the amount of third-party capital that we can raise, including the expected contributions by tax equity investors. For this reason, we project the net annual capacity factor for each project in our portfolio. Net capacity factor is one element used in measuring the productivity of a wind turbine, wind energy project or any other power production facility. It compares the turbine's production over a given period of time with the amount of power the turbine could have produced if it had run at full capacity for the same amount of time.

Net Capacity Factor   =   Amount of power produced over time (usually measured annually)

Power that would have been produced if turbine operated at full capacity 100% of the time over the same period of time

        Our net capacity factor projections are subject to change and are not intended to predict the wind at any specific time over the turbine's 20-year useful life. Even if our predictions of a wind energy project's net capacity factor become validated over time, the energy projects may experience hours, days, months, and even years that are below our wind resource projections.

        Projections of net capacity factor depend on wind resource projections, which rely upon assumptions such as wind speeds, interference between turbines, effects of vegetation and land use and terrain effects. The amount of electricity generated by a wind energy project depends upon many factors in addition to the quality of the wind resource, including turbine performance, aerodynamic losses resulting from wear on the wind turbine, degradation of turbine components, icing and the number of times an individual turbine or entire wind energy project may need to be shut down for maintenance or to avoid damage. In addition, conditions on the electrical transmission network can affect the amount of energy we can deliver to the network. Wind energy projects in our portfolio may fail to meet our energy production expectations in any given time period.

        If our wind energy projections are not realized, we could face a number of material issues, including:

    our energy sales may be significantly lower than we forecast;

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    our energy hedging arrangements may be adversely affected;

    we may not produce sufficient energy to meet our forward REC sales and, as a result, we may have to buy RECs on the open market to cover our position;

    we may earn fewer PTCs than projected, which would increase the period during which we must make certain distributions and allocations to our tax equity investors; and

    our wind energy projects may not generate sufficient cash flow to make payments on principal and interest as they become due on our project related debt.

        If, as a result of inaccurate wind resource projections, the performance of one or more of our wind energy projects falls below our projected net capacity factor levels, our business, financial condition and results of operations could be materially adversely affected.

Current or future litigation or administrative proceedings could have a material adverse effect on our business, financial condition and results of operations.

        We have been and continue to be involved in legal proceedings, administrative proceedings, claims and other litigation that arise in the ordinary course of business. Various individuals and interest groups may sue to challenge the issuance of a permit for a wind energy project or seek to enjoin construction of a wind energy project. For example, proceedings have been instituted against us challenging the issuance of some of our permits. In addition, we recently were served with a civil subpoena by the New York Attorney General relating to an investigation of our activities in the State of New York. The costs related to this investigation, as well as our own internal investigation, could be significant. The investigations being conducted by the New York Attorney General and our outside counsel are at an early stage. Therefore, we are unable to anticipate when these investigations may conclude, or what impact the New York Attorney General's investigation may have on current or future development plans, although a material adverse result is possible. Unfavorable outcomes or developments relating to these or other proceedings or investigations, such as judgments for monetary damages and other remedies, including injunctions or revocation of permits, could have a material adverse effect on our financing plans, business, financial condition and results of operations, and we could settle claims that could adversely affect our financial position and results of operations. For more information on these proceedings, other litigation and the New York Attorney General's subpoena, see "Business—Legal Proceedings."

We are not able to insure against all potential risks and may become subject to higher insurance premiums.

        Our business is exposed to the risks inherent in the construction and operation of wind energy projects, such as breakdowns, manufacturing defects, natural disasters, terrorist attacks and sabotage. We are also exposed to environmental risks. We have entered into insurance policies to cover certain risks associated with our business. Our insurance policies do not cover losses as a result of force majeure, natural disasters, terrorist attacks and sabotage. In addition, our insurance policies are subject to annual review by our insurers, and these policies may not be renewed at all or on similar or favorable terms. If we were to incur a serious uninsured loss or a loss significantly exceeding the limits of our insurance policies, the results could have a material adverse effect on our business, financial condition and results of operations.

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Material weaknesses identified in our internal control over financial reporting could result in a material misstatement in our financial statements as well as result in our inability to file periodic reports within the timeframes required by federal securities laws, which could have a material adverse effect on our business and stock price.

        We are required to design, implement and maintain effective controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis.

        In connection with the preparation of our consolidated financial statements as of and for the year ended December 31, 2007, we identified the following material weakness in our internal control over financial reporting:

        Our financial and accounting organization was not adequate to support our financial accounting and reporting needs. Specifically, we did not hire and retain a sufficient level of personnel with accounting knowledge and training in the application of generally accepted accounting principles required to prepare financial statements that are materially accurate or maintain effective internal control. The lack of a sufficient complement of personnel contributed to significant deficiencies specifically related to: (1) effective policies and procedures designed to ensure certain costs are capitalized in accordance with generally accepted accounting principles and captured in the appropriate accounting period; (2) an effective process to ensure the completeness of accounts payable and accrued expenses; and (3) an effective review and approval process, specifically related to journal entries.

        We have taken, or are in the process of taking, the following specific actions with respect to our identified control deficiencies:

    We have taken steps to improve the sufficiency and competency of our financial and accounting organization through the addition of experienced personnel. We have hired a new chief financial officer and added personnel to our accounting and financial reporting functions.

    We have designed and implemented a process that is expected to remediate the internal control deficiencies associated with the completeness of accounts and accrued expenses.

    We have designed and implemented a review and approval process that, when combined with the additional accounting and financial reporting personnel, is expected to remediate the internal control deficiencies we identified.

    We are reviewing and documenting our financial statement closing process to identify specific enhancements that may be made to further improve the overall effectiveness of our internal controls.

    We are undertaking an organizational redesign to more clearly align work flow with financial statement assertions and further increase the size and capabilities of the financial and accounting organization.

However, the measures we have taken or any future measures we plan to or may take may not adequately remediate the material weakness. Failure to implement new or improved controls, or any difficulties encountered in the implementation of such controls, could result in a material misstatement in our annual or interim consolidated financial statements or otherwise cause investors to lose confidence in our reported financial information.

        We are required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of the Sarbanes Oxley Act of 2002, which will require annual management assessments and a report by our independent registered public accounting firm on the effectiveness of our internal control over financial reporting. We must complete our Section 404 annual management

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report and include the report beginning with our 2009 Annual Report on Form 10-K. We may not be able conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 or our independent registered public accounting firm may issue an adverse opinion on the effectiveness of our internal control over financial reporting. If we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with a report that concludes our internal control over financial reporting are effective, investors could lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

        Failure to remediate any identified deficiencies in internal control could cause us to fail to meet our reporting obligations. The rules of the SEC require that we file periodic reports containing our financial statements within a specified time following the completion of quarterly and annual fiscal periods. Any failure by us to timely file our periodic reports with the SEC may result in a number of adverse consequences that could materially and adversely affect our business, including, without limitation, potential action by the SEC against us, possible defaults under our debt agreements, shareholder lawsuits, delisting of our stock and general damage to our reputation.

One of our operating projects and other future projects may be subject to regulation by the Federal Energy Regulatory Commission ("FERC") under the Federal Power Act ("FPA") or other regulations that regulate the sale of electricity, which may adversely affect our business.

        All of our current operating projects are "Qualifying Facilities" that are not subject to regulation as public utilities by FERC under the FPA. One of our operating projects is, however, subject to rate regulation by FERC under the FPA, and certain of our under-construction and development projects may be subject to such rate regulation in the future. Our project that is subject to rate regulation is required to obtain FERC acceptance of its rate schedules for wholesale sales of energy, capacity and ancillary services, and other projects that are subject to rate regulation will be subject to the same requirement. FERC's orders granting generating and power marketing companies market-based rate authority reserve the right to revoke or revise that authority if FERC subsequently determines that generating and power marketing companies can exercise market power in transmission or generation, create barriers to entry or engage in abusive affiliate transactions.

        Any market-based rate authority that we have or will obtain will be subject to certain market behavior rules. If we are deemed to have violated these rules, we will be subject to potential disgorgement of profits associated with the violation and/or suspension or revocation of our market-based rate authority, as well as potential criminal and civil penalties. If we were to lose market-based rate authority for a project, we would be required to obtain FERC's acceptance of a cost-based rate schedule and could become subject to, among other things, the burdensome accounting, record keeping and reporting requirements that are imposed on public utilities with cost-based rate schedules. This would have an adverse effect on the rates we charge for power from our facilities and our cost of regulatory compliance.

        Although the sale of electric energy has been to some extent deregulated, the industry is subject to increasing regulation and even the threat of re-regulation. Due to major regulatory restructuring initiatives at the federal and state levels, the U.S. electric industry has undergone substantial changes over the past several years. We cannot predict the future design of wholesale power markets or the ultimate effect ongoing regulatory changes will have on our business. 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 movement towards competitive markets. If the deregulation of the electric power markets is reversed, discontinued or delayed, our business prospects and financial results could be negatively affected.

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Risks Related to Our Structure

We are a holding company and our only material asset after completion of the reorganization and this offering will be our interest in First Wind Holdings, LLC, and accordingly we are dependent upon distributions from First Wind Holdings, LLC to pay taxes and other expenses.

        We will be a holding company and will have no material assets other than our ownership of Series A Units of First Wind Holdings, LLC. We will have no independent means of generating revenue. First Wind Holdings, LLC will be treated as a partnership for U.S. federal income tax purposes and, as such, will not itself be subject to U.S. federal income tax. Instead, its taxable income will generally be allocated to its members, including us, pro rata according to the number of membership units each member owns. Accordingly, we will incur income taxes on our proportionate share of any net taxable income of First Wind Holdings, LLC and also will incur expenses related to our operations. We intend to cause First Wind Holdings, LLC to distribute cash to its members in an amount at least equal to that necessary to cover their tax liabilities, if any, with respect to the earnings of First Wind Holdings, LLC. To the extent that we need funds to pay our tax or other liabilities or to fund our operations, and First Wind Holdings, LLC is restricted from making distributions to us under applicable agreements, laws or regulations or does not have sufficient earnings to make these distributions, we may have to borrow funds to meet these obligations and operate our business and, thus, our liquidity and financial condition could be materially adversely affected.

We will be required to pay holders of Series B Units most of the tax benefit of any depreciation or amortization deductions we may claim as a result of the tax basis step up we receive in connection with the reorganization and future exchanges of Series B Units.

        Our reorganization is expected to increase our share of the tax basis in the tangible and intangible assets of First Wind Holdings, LLC. In addition, future exchanges of Series B Units (together with the corresponding number of shares of our Class B common stock) for shares of our Class A common stock are expected to result in additional increases in our tax basis. These increases in tax basis are expected to reduce the amount of tax that we would otherwise be required to pay in the future. We expect we will be required to pay a portion of the cash savings we actually realize from such increase to holders of the Series B Units, which include our Sponsors and certain members of management pursuant to a tax receivable agreement. See "The Reorganization and Our Holding Company Structure—Tax Receivable Agreement."

        We intend to enter into a tax receivable agreement with each of the current members of First Wind Holdings, LLC and any future holder of Series B Units, pursuant to which we will pay them            % of the amount of the cash savings, if any, in U.S. federal, state and local income tax that we realize as a result of these increases in tax basis. The actual increase in tax basis, as well as the amount and timing of any payments under this agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of our Class A common stock at the time of the exchanges, the extent to which such exchanges are taxable, the amount and timing of our income and the tax rates then applicable. We expect that, as a result of the size and increases in our share of the tax basis in the tangible and intangible assets of First Wind Holdings, LLC attributable to our interest therein, the payments that we may make to these members likely will be substantial.

        If the IRS successfully challenges the tax basis increases described above, we will not be reimbursed for any payments made under the tax receivable agreement. As a result, in certain circumstances, we could make payments under the tax receivable agreement in excess of our cash tax savings.

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If we are deemed an investment company under the Investment Company Act, our business would be subject to applicable restrictions under that 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 are 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 operating our business as contemplated.

Risks Related to this Offering and Our Class A Common Stock

We will continue to be controlled by our Sponsors after the completion of this offering, which will limit your ability to influence corporate activities and may adversely affect the market price of our Class A common stock.

        Upon completion of the offering, our Sponsors will own or control outstanding common stock representing, in the aggregate, an approximately            % voting interest in us, or approximately            % if the underwriters exercise in full their option to purchase additional shares. As a result of this ownership, our Sponsors will have effective control over the outcome of votes on all matters requiring approval by our stockholders, including the election of directors, the adoption of amendments to our certificate of incorporation and bylaws and approval of a sale of the company and other significant corporate transactions. Our Sponsors can also take actions that have the effect of delaying or preventing a change in control of us or discouraging others from making tender offers for our shares, which could prevent stockholders from receiving a premium for their shares. These actions may be taken even if other stockholders oppose them. Concurrently with the closing of this offering, our Sponsors will enter into a shareholders' agreement pursuant to which they will vote all of the shares of Class A common stock and Class B common stock held by them together on certain matters submitted to a vote of our common shareholders.

The interests of our Sponsors may conflict with the interests of our other stockholders.

        The interests of our Sponsors, or entities controlled by them, may not coincide with the interests of the holders of our Class A common stock. For example, our Sponsors could cause us to make acquisitions or engage in other transactions that increase the amount of our indebtedness or the number of outstanding shares of Class A common stock or sell revenue-generating assets. Additionally, our Sponsors are in the business of trading securities of, and/or investing in, energy companies, including wind energy producers, and related products, including derivatives, commodities and power, and may, from time to time, compete directly or indirectly with us or prevent us from taking advantage of corporate opportunities. Our Sponsors may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us.

Conflicts of interest may arise because some of our directors are representatives of our controlling stockholders.

        Messrs. Alsikafi, Aube, Eilers and Martin, who are representatives of our Sponsors, serve on our board of directors. As discussed above, our Sponsors and entities controlled by them may hold equity interests in entities that directly or indirectly compete with us, and companies in which they currently invest may begin competing with us. As a result of these relationships, when conflicts between the interests of our Sponsors, on the one hand, and the interests of our other stockholders, on the other hand, arise, these directors may not be disinterested. Although our directors and officers have a duty

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of loyalty to us under Delaware law and our certificate of incorporation, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible so long as (1) the material facts relating to the director's or officer's relationship or interest as to the transaction are disclosed to our board of directors and a majority of our disinterested directors, or a committee consisting solely of disinterested directors, approves the transaction, (2) the material facts relating to the director's or officer's relationship or interest as to the transaction are disclosed to our stockholders and a majority of our disinterested stockholders approves the transaction or (3) the transaction is otherwise fair to us. Under our certificate of incorporation, representatives of our Sponsors are not required to offer to us any transaction opportunity of which they become aware and could take any such opportunity for themselves or offer it to other companies in which they have an investment, unless such opportunity is expressly offered to them solely in their capacity as a director of ours.

We have limited the liability of and have agreed to indemnify our Sponsors, their affiliates and their subsidiaries, as well as our directors and officers, which may result in these parties assuming greater risks.

        The liability of our Sponsors, their affiliates and their subsidiaries, as well as of our directors and officers, is limited, and we have agreed to indemnify each of these parties to the fullest extent permitted by law. This may lead such parties to assume greater risks when making investment-related decisions than they otherwise would.

        Under our certificate of incorporation and bylaws, the liability of our directors, officers, and employees is limited. Similarly, First Wind Holdings, LLC's amended and restated limited liability company agreement contains provisions limiting its managing member's, members', officers', and their respective affiliates', including our Sponsors' liability to First Wind Holdings, LLC and its unit holders. Because First Wind Holdings, LLC is a limited liability company, the exculpation and indemnification provisions in its amended and restated limited liability company agreement are not subject to the limitations set forth in the Delaware General Corporation Law (the "DGCL") with respect to the indemnification that may be provided by a Delaware corporation to its directors and officers. In addition, we have contractually agreed to indemnify our directors, officers, employees and their respective affiliates, including our Sponsors, to the fullest extent permitted by law. These protections may result in the indemnified parties', including our Sponsors, tolerating greater risks when making investment-related decisions than otherwise would be the case, for example when determining whether to use leverage in connection with investments. The indemnification arrangements may also give rise to legal claims for indemnification that are adverse to us and holders of our common stock.

We will be a "controlled company" within the meaning of Nasdaq rules and, as a result, may qualify for, and rely on, applicable exemptions from certain corporate governance requirements.

        Following the completion of this offering we will be a "controlled company" under the rules of Nasdaq. Under these rules, a company of which more than 50% of the voting power is held by a group is a "controlled company" and may elect not to comply with certain Nasdaq corporate governance requirements, including (1) the requirement that a majority of the board of directors consist of independent directors, (2) the requirement that the nominating committee be composed entirely of independent directors, (3) the requirement that the compensation committee be composed entirely of independent directors and (4) the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees. We intend to rely on this exemption to the extent it is applicable, and therefore we may not have a majority of independent directors or nominating and compensation committees consisting entirely of independent directors. Accordingly, you may not have the same protections afforded to stockholders of companies that are not deemed "controlled companies."

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The market price of our Class A common stock could decline due to the large number of shares of our Class A common stock eligible for future sale upon the exchange of Series B Units.

        The market price of our Class A common stock could decline as a result of sales of a large number of shares of our Class A common stock eligible for future sale upon the exchange of Series B Units (together with the corresponding number of shares of our Class B common stock), or the perception that such sales could occur. These sales, or the possibility that these sales may occur, also may make it more difficult for us to raise additional capital by selling equity securities in the future, at a time and price that we deem appropriate.

        Upon completion of this offering, approximately            Series B Units of First Wind Holdings, LLC will be outstanding. Subject to certain limitations, each Series B Unit, together with a corresponding share of Class B common stock, will be exchangeable for one share of our Class A common stock as described under "The Reorganization and Our Holding Company Structure—Amended and Restated Limited Liability Company Agreement of First Wind Holdings, LLC." We will enter into a registration rights agreement with our current investors pursuant to which we will grant such investors registration rights with respect to shares of Class A common stock received upon exchange of Series B Units (together with the corresponding number of shares of our Class B common stock).

Requirements associated with being a public company will increase our costs significantly, as well as divert significant company resources and management attention.

        Prior to this offering, we have not been subject to the reporting requirements of the Exchange Act or the other rules and regulations of the SEC or any stock exchange. We are working with our legal, independent accounting and financial advisors to identify those areas in which changes should be made to our financial and management control systems to manage our growth and fulfill our obligations as a public company. These areas include corporate governance, corporate control, internal audit, disclosure controls and procedures, financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas. However, the expenses that will be required in order to prepare adequately for being a public company could be material. Compliance with the various reporting and other requirements applicable to public companies will also require considerable time and attention of management.

        In addition, being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including directors' and officers' liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

Our certificate of incorporation, bylaws and Delaware law contain provisions that could discourage another company from acquiring us, may prevent attempts by our stockholders to replace or remove our current management and could negatively affect our stock price.

        Some provisions of our certificate of incorporation, bylaws and Delaware law may have the effect of delaying, discouraging or preventing a merger or acquisition that our stockholders may consider favorable, including transactions in which stockholders may receive a premium for their shares. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace or remove our board of directors. Our certificate of incorporation and bylaws:

    authorize the issuance of "blank check" preferred stock that could be issued by our board of directors to thwart a takeover attempt without further stockholder approval;

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    classify the board of directors into staggered three-year terms, which may lengthen the time required to gain control of our board of directors;

    prohibit cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of stock to elect some directors; and

    require super-majority (80%) voting to effect amendments to provisions of our certificate of incorporation or bylaws regarding board composition and classes of directors, renouncement of business opportunities and other amendments to our certificate of incorporation or bylaws described above.

        In addition, in our certificate of incorporation, we have elected not to be subject to section 203 of the DGCL, which would otherwise prohibit transactions with a stockholder who owns 15% or more of our stock. As a result, we may be more susceptible to takeover offers that have not been approved by our board. These provisions could limit the price that investors are willing to pay in the future for shares of our Class A common stock. These provisions may also discourage a potential acquisition proposal or tender offer, even if the acquisition proposal or tender offer is at a premium over the then-current market price for our Class A common stock.

Our Class A common stock has not been publicly traded prior to this offering, and we expect that the price of our Class A common stock may fluctuate substantially.

        There has not been a public market for our Class A common stock prior to this offering. A trading market for our Class A common stock may not develop or be liquid. If you purchase shares of our Class A common stock in this offering, you will pay a price that was not established in the public trading markets. The initial public offering price was determined by negotiations between the underwriters and us. You may not be able to resell your shares above the initial public offering price and may suffer a loss of some or all of your investment.

        Broad market and industry factors may adversely affect the market price of our Class A common stock, regardless of our actual operating performance. Other factors that could cause fluctuations in our stock price may include, among other things:

    uncertainty associated with the timing of project development and completion;

    extension or expiration of the PTC and other changes in government policy;

    actual or anticipated variations in quarterly operating results;

    volatility in market prices for electricity and RECs;

    weather conditions that may affect our production;

    changes in financial estimates by us or by any securities analysts who may cover our stock or our failure to meet the estimates made by securities analysts;

    changes in the market valuations of other companies operating in our industry;

    announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;

    additions or departures of key personnel; and

    sales of our Class A common stock, including sales of our Class A common stock by our directors and officers or by affiliates of our Sponsors or our other principal stockholders.

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Factors over which we have little or no control may cause our operating results to vary widely from period to period, which may cause our stock price to decline.

        Our operating results may fluctuate from period-to-period depending on several factors, including varying weather conditions; changes in regulated or market electricity prices; electricity demand, which follows broad seasonal demand patterns; changes in market prices for RECs; marking to market of our hedging arrangements and unanticipated development or construction delays. Thus, a period-to-period comparison of our operating results may not reflect long-term trends in our business and may not prove to be a relevant indicator of future earnings. These factors may harm our business, financial condition and results of operations and may cause our stock price to decline.

We currently do not intend to pay dividends on our Class A common stock for the foreseeable future. As a result, your only opportunity to achieve a return on your investment is if the price of our Class A common stock appreciates.

        We currently do not expect to declare or pay dividends on our Class A common stock for the foreseeable future. Our debt agreements currently limit our ability to pay dividends on our Class A common stock, and we may also enter into other agreements in the future that prohibit or restrict our ability to declare or pay dividends on our Class A common stock. As a result, your only opportunity to achieve a return on your investment will be if the market price of our Class A common stock appreciates and you sell your shares at a profit.

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

        We are in a capital intensive business and we do not have sufficient funds to finance the growth of our business or the construction costs of our development projects or to support our projected capital expenditures. As a result, we will require additional funds from further equity or debt financings, including tax equity financing transactions or sales of preferred shares or convertible debt to complete the development of new projects and pay the general and administrative costs of our business. We may in the future issue our previously authorized and unissued securities, resulting in the dilution of the ownership interests of purchasers of Class A common stock offered hereby. We are currently authorized to issue             shares of common stock and            shares of preferred stock with preferences and rights as determined by our board of directors. The potential issuance of such additional shares of 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 Class A common stock in future public offerings or private placements of our securities for capital raising purposes or for other business purposes, potentially at an offering price or conversion price that is below the offering price for Class A common stock in this offering.

You will suffer immediate and substantial dilution in the book value per share of your Class A common stock as a result of this offering.

        The initial public offering price of our Class A common stock is considerably more than the pro forma net tangible book value per share of our outstanding Class A common stock, as adjusted to reflect completion of this offering. This reduction in the book value of your equity is known as dilution. This dilution occurs in large part because our earlier investors paid substantially less than the initial public offering price when they purchased their shares. Investors purchasing Class A common stock in this offering will incur immediate dilution of $            in pro forma net tangible book value per share of Class A common stock, as adjusted to reflect completion of this offering, based on the initial public offering price of $            per share.

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        The risks described herein are not the only risks we face. Additional risks and uncertainties not currently known to us, or that are currently deemed to be insignificant, also may materially adversely affect our business, financial condition and results of operations.


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        Various statements in this prospectus, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. The forward-looking statements may include projections and estimates concerning the timing and success of specific projects, revenues, income and capital spending. We generally identify forward-looking statements with the words "believe," "intend," "expect," "seek," "may," "should," "anticipate," "could," "estimate," "plan," "predict," "project" or their negatives, and other similar expressions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements.

        These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. The forward-looking statements contained in this prospectus are largely based on our expectations, which reflect many estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors and it is impossible for us to anticipate all factors that could affect our actual results. In addition, management's assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this prospectus are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the factors listed in the "Risk Factors" section and elsewhere in this prospectus. All forward-looking statements are based upon information available to us on the date of this prospectus. We undertake no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as otherwise required by law. These cautionary statements qualify all forward-looking statements attributable to us, or persons acting on our behalf. The risks, contingencies and uncertainties associated with our forward-looking statements relate to, among other matters, the following:

    our ability to complete our wind energy projects;

    fluctuations in supply, demand, prices and other conditions for electricity, other commodities and RECs;

    public response to and changes in the local, state and federal regulatory framework affecting renewable energy projects, including the potential expiration and extension of the PTC;

    the ability of our counterparties to satisfy their financial commitments and RECs;

    the limited operating history of and technical issues experienced by one or our key turbine suppliers, Clipper Windpower;

    the availability of financing, including tax equity financing, for our wind energy projects;

    our ability to continue as a going concern;

    our ability to qualify the electricity from certain Northeast projects for Massachusetts RECs;

    risks associated with our hedging strategies;

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    the availability of equipment required for the construction of our wind energy projects, particularly wind turbines;

    our substantial indebtedness described in this prospectus;

    competition from other energy developers;

    development constraints, including limited geographic availability for suitable sites, timing of permits and availability of interconnection;

    potential environmental liabilities and the cost of compliance with applicable environmental laws and regulations;

    our electrical production projections for our wind energy projects;

    our ability to operate our business efficiently, manage capital expenditures and costs (including general and administrative expenses) effectively and generate earnings and cash flow;

    our ability to retain and attract senior management and key employees;

    our ability to keep pace with and take advantage of new technologies;

    weather conditions that may affect our electricity production;

    the effects of litigation, including administrative and other proceedings or investigations relating to our wind energy projects under development and those in operation;

    conditions in energy markets as well as financial markets generally, which will be affected by interest rates, foreign currency fluctuations and general economic conditions;

    strains on our resources due to the expansion of our business;

    non-payment by customers and enforcement of certain contractual provisions;

    the effective life and cost of maintenance of our wind turbines and other equipment; and

    other factors discussed under "Risk Factors."


MARKET AND INDUSTRY DATA

        This prospectus includes market and industry data that we have developed from independent consultant reports, publicly available information, various industry publications, other published industry sources and our internal data and estimates. Our internal data, estimates and forecasts are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and our management's understanding of industry conditions.


USE OF PROCEEDS

        We estimate that the net proceeds to us from the sale of Class A common stock in this offering will be approximately $            , based on an offering price of $            per share, the midpoint of the range set forth on the cover of this prospectus, and after deducting the underwriting discount and estimated offering expenses.

        We intend to use our net proceeds from this offering to repay approximately $             million of outstanding indebtedness under our First Wind Holdings, LLC revolving credit facility, to repay approximately $             million of outstanding indebtedness under our First Wind Acquisition, LLC turbine supply loan and the remaining $             million to fund a portion of our expected capital expenditures in 2008 and 2009.

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        As of June 30, 2008, $223.1 million was outstanding under the First Wind Holdings, LLC revolving credit facility. We used the net proceeds of the revolver loan to finance the development, construction, ownership and operation of the Steel Winds I, Cohocton I and Prattsburgh I projects in New York. As of June 30, 2008, the interest rate for borrowings under the revolver loan was 3.60%. The revolver loan matures on October 15, 2008. We are currently negotiating an extension of the maturity of our revolving credit facility.

        As of June 30, 2008, $267.2 million was outstanding under the First Wind Acquisition, LLC turbine supply loan. We used the net proceeds of the turbine supply loan to acquire GE Energy turbines. As of June 30, 2008, the interest rate for borrowings under the turbine supply loan was 4.85%. The outstanding balance under the turbine supply loan matures on April 15, 2009.

        All of the indebtedness being repaid using the net proceeds from this offering has been guaranteed by certain of our existing investors. We expect that these guarantees will terminate upon such repayment. See "Certain Relationships and Related Party Transactions—Related Party Loans and Advances."

        A $1.00 increase or decrease in the assumed initial public offering price of $            would increase or decrease net proceeds to us from this offering by approximately $             million after deducting underwriting discounts and commissions and estimated offering expenses.


DIVIDEND POLICY

        We do not expect to declare or pay any cash or other dividends in the foreseeable future on our Class A common stock, as we intend to reinvest cash flow generated by operations in our business. Class B common stock will not be entitled to any dividend payments. Our debt agreements effectively limit our ability to pay dividends on our Class A common stock, and we may also enter into credit agreements or other arrangements in the future that prohibit or restrict our ability to declare or pay dividends on our Class A common stock.

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CAPITALIZATION

        The following table sets forth the consolidated cash and cash equivalents and capitalization of First Wind Holdings, LLC as of June 30, 2008 on an actual basis and of First Wind Holdings Inc. on a pro forma and a pro forma as adjusted basis after giving effect to:

    on an actual basis;

    on a pro forma basis as of June 30, 2008 to give effect to all of the reorganization transactions described in "The Reorganization and Our Holding Company Structure;" and

    on a pro forma as adjusted basis as of June 30, 2008 to give further effect to our sale of            shares of common stock in this offering at an assumed initial public offering price of $            per share, the midpoint of the range listed on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expense payable by us.

        You should read this table together with the information set forth in "Unaudited Pro Forma Financial Information," "Selected Historical Financial and Operating Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "The Reorganization and Our Holding Company Structure," "Description of Capital Stock" and the consolidated financial statements included elsewhere in this prospectus.

 
  As of June 30, 2008  
 
  First Wind
Holdings, LLC
Actual
  First Wind
Holdings Inc.
Pro Forma
  First Wind
Holdings Inc.
Pro Forma
As Adjusted(2)
 
 
  (unaudited)
 
 
  (in thousands, except share amounts)
 

Long-term debt, including debt with maturities less than one year(1)

  $ 701,031   $     $    
               

Members' capital/stockholders' equity:

                   
   

Members' capital

    290,137            
   

Class A common stock, $0.001 par value, no shares authorized, issued and outstanding, actual;            shares authorized and            shares issued and outstanding, pro forma;             shares authorized and             shares issued and outstanding, pro forma as adjusted

                 
   

Class B common stock, $0.0001 par value, no shares authorized, issued and outstanding, actual;             shares authorized and            shares issued and outstanding pro forma;            shares authorized and            shares issued and outstanding, pro forma as adjusted

                 
 

Additional paid-in capital

                 
 

Accumulated deficit

    (185,537 )            
               
   

Total members' capital/stockholders' equity

    104,600              
               

Total capitalization

  $ 805,631   $     $    
               

(1)
Approximately $679.4 million of our outstanding indebtedness had a maturity of less than one year as of June 30, 2008.

(2)
A $1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) each of the pro forma as adjusted cash and cash equivalents and stockholders' equity by $            million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and following completion of this offering will be adjusted based on the actual offering price and other terms of this offering determined at pricing.

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DILUTION

        At June 30, 2008 after giving effect to the reorganization, the net tangible book value per share of our Class A common stock was $            . Net tangible book value per share is determined by dividing our tangible net worth (tangible assets less total liabilities) by the total number of outstanding shares of Class A common stock. After giving effect to the sale of the shares in this offering and based on an assumed offering price of $            per share, the midpoint of the range shown on the cover page of this prospectus, assuming the receipt of the estimated net proceeds, after deducting the estimated discounts and offering expenses and assuming all Series B Units that will be outstanding immediately after the reorganization are, together with the corresponding number of shares of our Class B common stock, exchanged for the corresponding number of shares of our Class A common stock, our net tangible book value at June 30, 2008 would have been approximately $            per share. This represents an immediate and substantial increase in the net tangible book value of $            per share to existing stockholders and an immediate dilution of $            per share to new investors purchasing Class A common stock in this offering, resulting from the difference between the offering price and the net tangible book value after this offering. The following table illustrates the per share dilution to new investors purchasing Class A common stock in this offering:

Assumed initial public offering price per share

        $    

Net tangible book value per share at June 30, 2008

  $          

Increase in net tangible book value per share attributable to new investors

  $          
             

As adjusted net tangible book value per share after this offering

        $    
             

Dilution per share to new investors

        $    
             

        The following table sets forth at June 30, 2008 after giving effect to the reorganization, the total number of shares of Class A common stock purchased from us, and the total consideration and average price per share paid by existing equity holders and by new investors purchasing Class A common stock in this offering, assuming all Series B Units that will be outstanding immediately after the consummation of the reorganization are, together with the corresponding number of shares of our Class B common stock, exchanged for the corresponding number of shares of our Class A common stock, at an assumed initial public offering price of $            per share, the midpoint of the range set forth on the cover page of this prospectus.

 
  Shares Issued   Total Consideration    
 
 
  Average Consideration Per Share  
 
  Number   Percent   Amount   Percent  

Existing stockholders

                               
                         

New investors

                               
                         
 

Total

          100 %         100 %      
                         

        If the underwriters' option to purchase additional shares is exercised in full, the number of shares held by existing stockholders after this offering would decrease to            , or        %, of the total number of shares of Class A common stock outstanding immediately following this offering, and the number of shares held by new investors would increase to            or approximately        % of the total number of shares of Class A common stock outstanding immediately following this offering.

        A $1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) total consideration paid by new investors in this offering and by all investors by $             million, and would increase (decrease) the average price per share paid by new investors by $            , assuming the number of shares of Class A common stock offered by us, as set forth on the front cover page of this prospectus, remains the same.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

        The following unaudited consolidated pro forma statements of operations for the year ended December 31, 2007 and the six months ended June 30, 2008 and the unaudited pro forma consolidated balance sheet as of June 30, 2008 present our consolidated results of operations and financial position to give pro forma effect to the reorganization transactions described in "The Reorganization and our Holding Company Structure" and the sale of shares in this offering (excluding shares issuable upon exercise of the underwriters' option to purchase additional shares, if any) and the application of the net proceeds from this offering as if all such transactions had been completed as of January 1, 2007 with respect to the unaudited consolidated pro forma statement of operations and as of June 30, 2008 with respect to the unaudited pro forma consolidated balance sheet data. The unaudited pro forma consolidated financial statements reflect pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions we believe are reasonable, but are subject to change. We have made, in our opinion, all adjustments that are necessary to present fairly the pro forma financial data.

        The unaudited pro forma financial data are presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the reorganization transactions and this offering been consummated on the dates indicated, and do not purport to be indicative of statements of financial condition data or results of operations as of any future date or any future period.

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FIRST WIND HOLDINGS INC.
Unaudited Pro Forma Consolidated Balance Sheet
As of June 30, 2008
(in thousands, except share amounts)

 
  First Wind Holdings, LLC
Historical
  Reorganization Adjustments   First Wind Holdings Inc.(1)
Pro Forma
  Offering
Adjustments
  First Wind
Holdings Inc.(1)
Pro Forma
as Adjusted
 
 
  (unaudited)
   
   
   
   
 

Assets

                               

Current assets:

                               
 

Cash and cash equivalents

  $ 10,349   $     $     $     $    
 

Restricted cash

    17,661                          
 

Accounts receivable

    2,663                          
 

Prepaid expenses and other current assets

    8,492                          
 

Deferred financing costs, net of accumulated amortization of $5,212 as of June 30, 2008

    4,774                          
                       
   

Total current assets

    43,939                          

Property, plant and equipment, net

    188,040                          

Construction in progress

    463,566                          

Turbine deposits

    315,365                          

Other non-current assets

    20,215       (2)                  
                       
   

Total assets

  $ 1,031,125   $     $     $     $    
                       

Liabilities and Stockholders' Equity

                               

Current liabilities:

                               
 

Accrued capital expenditures

  $ 41,992   $     $     $     $    
 

Accounts payable and accrued expenses

    24,240                          
 

Derivative liabilities

    13,264                          
 

Deferred tax liability

          (3)                  
 

Other current liabilities

          (3)                  
 

Debt with maturities less than one year

    679,361                   (4)      
                       
   

Total current liabilities

    758,857                          

Long-term debt, net of current portion

    21,670                          

Long-term derivative liabilities

    81,981                          

Deferred revenue

    2,085                          

Asset retirement obligations

    2,587                          
                       
   

Total liabilities

    867,180                          

Commitments and contingencies

                               

Minority interest

    59,345                          

Members' capital/stockholders' equity:

                               
 

Members' capital

    290,137       (2)                  
 

Class A common stock, $0.001 par

                               
 

    value, no shares authorized, issued and outstanding, actual;         shares authorized and shares issued and outstanding, as adjusted

          (2)           (4)      
 

Class B common stock, $0.0001 par

            (3)                  
 

    value, no shares authorized, issued and outstanding, actual;             shares authorized and shares issued and outstanding, as adjusted

          (2)                  
 

Additional paid in-capital

          (2)                  
 

Accumulated deficit

    (185,537 )                        
                       
   

Total members' capital/stockholders' equity

    104,600                          
                       
   

Total liabilities and members' capital/stockholders' equity

  $ 1,031,125   $     $     $     $    
                       

(1)
As a newly formed entity, First Wind Holdings Inc. will have no assets or results of operations until the completion of this offering.

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(2)
Represents adjustments to reflect minority interest resulting from the existing members' ownership interest of approximately        % of the Series B Units of First Wind Holdings, LLC. As described in "The Reorganization and Our Holding Company Structure," following this offering and the reorganization that we are undertaking in connection therewith, our only material asset will be our ownership of approximately    % of the membership units of First Wind Holdings, LLC and our only business will be to act as the sole managing member of First Wind Holdings, LLC. As such, we will operate and control all of its business and affairs and will consolidate its financial results into our financial statements. The ownership interests of the other members of First Wind Holdings, LLC will be accounted for as a minority interest in our consolidated financial statements after this offering.
(3)
Our reorganization and the new holding company structure are expected to increase our share of the tax basis in the tangible and intangible assets of First Wind Holdings, LLC. The step-up in tax basis is initially deductible for tax purposes over a 15-year period. We will enter into a tax receivable agreement with certain holders of Series B Units after giving effect to the reorganization and any future holder of Series B Units that will require us to pay such holders    % of the amount of cash savings, if any, in U.S. federal, state and local income tax that we actually realize (or are deemed to realize in the case of an early termination payment by us, or a change in control, as discussed below) as a result of the increases in tax basis and of certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. The adjustments assume that there are no material changes in the relevant tax law.
(4)
We expect to receive net proceeds from this offering of $             million based on an aggregate underwriting discount of $             million and estimated offering expenses of $             million. We intend to use our net proceeds from this offering to repay approximately $             million of outstanding indebtedness under one of our revolving credit facilities, to repay approximately $         million of outstanding indebtedness under one of our turbine supply loans and to fund a portion of our expected capital expenditures in 2008 and 2009.

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FIRST WIND HOLDINGS INC.
Unaudited Pro Forma Consolidated Statement of Operations
Year ended December 31, 2007
(in thousands, except share and per share amounts)

 
  First Wind
Holdings, LLC
Historical
  Reorganization
Adjustments
  First Wind
Holdings Inc.(1)
Pro Forma
  Offering
Adjustments
  First Wind
Holdings Inc.(1)
Pro Forma
as Adjusted
 

Statement of Operations Data:

                               

Revenues:

                               
 

Revenues

  $ 23,817   $     $     $     $    
 

Risk management activities related to operating projects

    (11,471 )                        
                       
   

Total revenues

    12,346                          
                       

Cost of revenues:

                               
 

Wind energy project operating expenses

    9,175                          
 

Depreciation and amortization of operating assets

    8,800                          
                       
   

Total cost of revenues

    17,975                          
                       
   

Gross loss

    (5,629 )                        
                       

Project development expenditures

    25,861                          

General and administrative

    13,308                          

Depreciation and amortization

    1,215                          
                       
 

Total expenditures

    40,384                          
                               
 

Loss from operations

    (46,013 )                        

Risk management activities related to non-operating projects

    (21,141 )                        

Other income

    843                          

Interest expense, net of capitalized interest

    (9,585 )                 (2)      
                       
 

Net loss before minority interest in operations of subsidiaries

    (75,896 )                        

Minority interest in operations of subsidiaries

    7,825       (3)                  
                       
 

Net loss before income taxes

    (68,071 )                        

Income tax expense

          (4)                  
                       
 

Net loss

  $ (68,071 ) $     $     $     $    
                       

Pro forma net loss per share—basic and diluted(5)

              $           $    
                             

Shares used in computing pro forma net loss per share—basic and diluted(5)(6)(7)

                               
                             

(1)
As a newly formed entity, First Wind Holdings Inc. will have no assets or results of operations until the completion of this offering.
(2)
We expect to receive net proceeds from this offering of $             million based on an aggregate underwriting discount of $             million and estimated offering expenses of $             million. We intend to use our net proceeds from this offering to repay approximately $             million of outstanding indebtedness under one of our revolving credit facilities, to repay approximately $         million of outstanding indebtedness under one of our turbine supply loans and to fund a portion of our expected capital expenditures in 2008 and 2009.
(3)
As described in "The Reorganization and Our Holding Company Structure," following this offering, and the reorganization that we are undertaking in connection therewith, our only material asset will be our ownership of approximately    % of the

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    membership units of First Wind Holdings, LLC and our only business will be to act as the sole managing member of First Wind Holdings, LLC. As such, we will operate and control all of its business and affairs and will consolidate its financial results into our financial statements. The ownership interests of the other members of First Wind Holdings, LLC will be accounted for as a minority interest in our consolidated financial statements after this offering. Represents adjustments to reflect minority interest resulting from the existing members' ownership interest of approximately         % of the Series B Units of First Wind Holdings, LLC.

(4)
First Wind Holdings, LLC is currently taxed as a partnership for federal income tax purposes. Therefore, we are not subject to entity-level federal income taxation, and our taxes with respect to First Wind Holdings, LLC are payable by our equity holders at rates applicable to them. Following this offering, and the reorganization that we are undertaking in connection therewith, earnings recorded by us will be subject to federal income taxation. Reflects provision for income taxes based on an assumed effective tax rate of     %.
(5)
Basic and diluted net income per share was computed by dividing the pro forma net income attributable to our Class A common stockholders by the             shares of Class A common stock that we will issue and sell in this offering (assuming that the underwriters do not exercise their option to purchase an additional             shares of Class A common stock to cover over-allotments), plus            shares issued in connection with our initial capitalization, assuming that these             shares of Class A common stock were outstanding for the entirety of each of the historical periods presented on a pro forma basis. No pro forma effect was given to the future potential exchanges of the            Series B Units, together with the corresponding number of shares of our Class B common stock, of our subsidiary, First Wind Holdings, LLC, that will be outstanding immediately after the consummation of this offering and the reorganization transactions for the corresponding number of shares of our Class A common stock because the issuance of shares of Class A common stock upon these exchanges would not be dilutive.

    A $1.00 increase (decrease) in the assumed initial public offering price of $        per share would increase (decrease) each of the pro forma as adjusted cash and cash equivalents and stockholders' equity by $         million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and following completion of this offering will be adjusted based on the actual offering price and other terms of this offering determined at pricing.

(6)
We made dividend distributions of $23,692 during 2007 and $75 during 2008 to minority members of First Wind Holdings, LLC. We have assumed an increase in the number of shares that, when multiplied by the offering price, would be sufficient to replace the capital in excess of the earnings withdrawn. This pro forma adjustment resulted in an additional                        shares added to the calculation of "Shares used in computing pro forma net loss per share—basic and diluted".

(7)
The shares used in computing pro forma net loss per share include only the number of shares for which the proceeds are being reflected in the pro forma adjustments above. The table below summarizes the corresponding number of shares, assuming an offering price of $                        , issued related to each pro forma adjustment:

 
  Number of shares  

Pro forma adjustment(a)—debt reduction of $                

       

Pro forma adjustment(b)—minority interest of $                

       

Pro forma adjustment(c)—income tax expense of $                

       

Pro forma adjustment(d)—dividend paid of $32,283

       

Total pro forma shares

       

      (a)
      See footnote (2).
      (b)
      See footnote (3).
      (c)
      See footnote (4).
      (d)
      See footnote (6).

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FIRST WIND HOLDINGS INC.
Unaudited Pro Forma Consolidated Statement of Operations
Six months ended June 30, 2008
(in thousands, except share and per share amounts)

 
  First Wind Holdings, LLC
Historical
  Reorganization
Adjustments
  First Wind Holdings Inc.(1)
Pro Forma
  Offering
Adjustments
  First Wind
Holdings Inc.(1)
Pro Forma
as Adjusted
 
 
  (unaudited)
   
   
   
   
 

Statement of Operations Data:

                               

Revenues:

                               
 

Revenues

  $ 13,863   $     $     $     $    
 

Risk management activities related to operating projects

    (21,300 )                        
                       
   

Total revenues

    (7,437 )                        
                       

Cost of revenues:

                               
 

Wind energy project operating expenses

    4,501                          
 

Depreciation and amortization of operating assets

    4,612                          
                       
   

Total cost of revenues

    9,113                          
                       
   

Gross loss

    (16,550 )                        
                       

Project development expenditures

    15,685                          

General and administrative

    14,542                          

Depreciation and amortization

    1,061                          
                       
 

Total expenditures

    31,288                          
                       
 

Loss from operations

    (47,838 )                        

Risk management activities related to non-operating projects

    (34,635 )                        

Other income

    29                          

Interest expense, net of capitalized interest

    (3,352 )                 (2)      
                       
 

Net loss before minority interest in operations of subsidiaries

    (85,796 )                        

Minority interest in operations of subsidiaries

    16,681       (3)                  
                       
 

Net loss before income taxes

    (69,115 )                        

Income tax expense

          (4)                  
                       
 

Net loss

  $ (69,115 ) $     $     $     $    
                       

Pro forma net loss per share—basic and diluted(5)

              $           $    
                             

Shares used in computing pro forma net loss per share—basic and diluted(5)(7)

                               
                             

(1)
As a newly formed entity, First Wind Holdings Inc. will have no assets or results of operations until the completion of this offering.
(2)
We expect to receive net proceeds from this offering of $             million based on an aggregate underwriting discount of $             million and estimated offering expenses of $             million. We intend to use our net proceeds from this offering to repay approximately $             million of outstanding indebtedness under one of our revolving credit facilities, to repay approximately $         million of outstanding indebtedness under one of our turbine supply loans and to fund a portion of our expected capital expenditures in 2008 and 2009.
(3)
As described in "The Reorganization and Our Holding Company Structure," following this offering, and the reorganization that we are undertaking in connection therewith, our only material asset will be our ownership of approximately    % of the membership units of First Wind Holdings, LLC and our only business will be to act as the sole managing member of First Wind Holdings, LLC. As such, we will operate and control all of its business and affairs and will consolidate its financial results into our financial statements. The ownership interests of the other members of First Wind Holdings, LLC will be accounted for as a minority interest in our consolidated financial statements after this offering. Represents adjustments to reflect minority interest resulting from the existing members' ownership interest of approximately        % of the Series B Units of First Wind Holdings, LLC.

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(4)
First Wind Holdings, LLC is currently taxed as a partnership for federal income tax purposes. Therefore, we are not subject to entity-level federal income taxation, and our taxes with respect to First Wind Holdings, LLC are payable by our equity holders at rates applicable to them. Following this offering, and the reorganization that we are undertaking in connection therewith, earnings recorded by us will be subject to federal income taxation. Reflects provision for income taxes based on an assumed effective tax rate of     %.
(5)
Basic and diluted net income per share was computed by dividing the pro forma net income attributable to our Class A common stockholders by the             shares of Class A common stock that we will issue and sell in this offering (assuming that the underwriters do not exercise their option to purchase an additional             shares of Class A common stock to cover over-allotments), plus            shares issued in connection with our initial capitalization, assuming that these             shares of Class A common stock were outstanding for the entirety of each of the historical periods presented on a pro forma basis. No pro forma effect was given to the future potential exchanges of the            Series B Units, together with the corresponding number of shares of our Class B common stock, of our subsidiary, First Wind Holdings, LLC, that will be outstanding immediately after the consummation of this offering and the reorganization transactions for the corresponding number of shares of our Class A common stock because the issuance of shares of Class A common stock upon these exchanges would not be dilutive.

    A $1.00 increase (decrease) in the assumed initial public offering price of $        per share would increase (decrease) each of the pro forma as adjusted cash and cash equivalents and stockholders' equity by $         million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and following completion of this offering will be adjusted based on the actual offering price and other terms of this offering determined at pricing.

(6)
We made dividend distributions of $23,692 during 2007 and $75 during 2008 to minority members of First Wind Holdings, LLC. We have assumed an increase in the number of shares that, when multiplied by the offering price, would be sufficient to replace the capital in excess of the earnings withdrawn. This pro forma adjustment resulted in an additional                        shares added to the calculation of "Shares used in computing pro forma net loss per share—basic and diluted".

(7)
The shares used in computing pro forma net loss per share include only the number of shares for which the proceeds are being reflected in the pro forma adjustments above. The table below summarizes the corresponding number of shares, assuming an offering price of $                        , issued related to each pro forma adjustment:

 
  Number of shares  

Pro forma adjustment(a)—debt reduction of $                

       

Pro forma adjustment(b)—minority interest of $                

       

Pro forma adjustment(c)—income tax expense of $                

       

Pro forma adjustment(d)—dividend paid of $32,283

       

Total pro forma shares

       

      (a)
      See footnote (2).
      (b)
      See footnote (3).
      (c)
      See footnote (4).
      (d)
      See footnote (6).

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SELECTED HISTORICAL FINANCIAL AND OPERATING DATA

        You should read the following selected consolidated financial data together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and notes thereto appearing elsewhere in this prospectus. The selected consolidated statement of operations data for the years ended December 31, 2005, 2006 and 2007 and the selected consolidated balance sheet data as of December 31, 2006 and 2007 are derived from our audited consolidated financial statements included elsewhere in this prospectus. In their report dated July 29, 2008, which is also included in this prospectus, our independent registered public accounting firm stated that our consolidated financial statements as of and for the year ended December 31, 2007 were prepared assuming we would continue as a going concern; however, our recurring losses from operations, negative operating cash flows, accumulated deficit and need to obtain adequate funding to procure turbines and fund capital expenditures raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to obtain additional debt or equity financing, we may have to curtail our development activities or be forced to sell assets, perhaps on unfavorable terms, which would have a material adverse effect on our business, financial condition and results of operations. The selected consolidated statement of operations data for the fiscal year ended December 31, 2004 and the selected consolidated balance sheet data as of December 31, 2004 are derived from our audited consolidated financial statements not included in this prospectus. The selected consolidated statement of operations data for the fiscal year ended December 31, 2003 and the selected consolidated balance sheet data as of December 31, 2003 are derived from our unaudited consolidated financial statements not included in this prospectus. The selected consolidated statement of operations data for the six months ended June 30, 2007 and 2008 and the selected consolidated balance sheet data as of June 30, 2008 are derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus. The unaudited interim period financial information, in the opinion of management, includes all adjustments, which are normal and recurring in nature, necessary for the fair presentation of the periods shown. Our historical results may not be indicative of the operating results to be expected in any future periods.

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  Year ended December 31,   Six Months ended
June 30,
 
 
  2003   2004   2005   2006   2007   2007   2008  
 
  (unaudited)
   
   
   
   
  (unaudited)
 
 
  (in thousands, except unit data and operating data)
 

Statement of Operations Data:

                                           

Revenues:

                                           
 

Revenues

  $   $   $ 72   $ 7,063   $ 23,817   $ 8,397   $ 13,863  
 

Risk management activities related to operating projects

                8,848     (11,471 )   (1,835 )   (21,300 )
                               
   

Total revenues

            72     15,911     12,346     6,562     (7,437 )
                               

Cost of revenues:

                                           
 

Wind energy project operating expenses

                1,339     9,175     4,675     4,501  
 

Depreciation and amortization of operating assets

                1,945     8,800     4,162     4,612  
                               
   

Total cost of revenues

                3,284     17,975     8,837     9,113  
                               
   

Gross profit (loss)

            72     12,627     (5,629 )   (2,275 )   (16,550 )
                               
 

Project development expenditures

    1,881     4,369     6,706     16,028     25,861     13,418     15,685  
 

General and administrative

            1,557     6,598     13,308     5,898     14,542  
 

Depreciation and amortization

            158     294     1,215     303     1,061  
                               
   

Total expenditures

    1,881     4,369     8,421     22,920     40,384     19,619     31,288  
                               
   

Loss from operations

    (1,881 )   (4,369 )   (8,349 )   (10,293 )   (46,013 )   (21,894 )   (47,838 )
 

Risk management activities related to non-operating projects

            (6,784 )   (13,131 )   (21,141 )   (2,156 )   (34,635 )
 

Other income

        11     19     282     843     262     29  
 

Interest expense, net of capitalized interest

    (123 )   (340 )   (2,803 )   (3,049 )   (9,585 )   (3,627 )   (3,352 )
                               
   

Net loss before minority interest in operations of subsidiaries and cumulative effect of adoption of FIN 46R

    (2,004 )   (4,698 )   (17,917 )   (26,191 )   (75,896 )   (27,415 )   (85,796 )

Minority interest in operations of subsidiaries

                176     7,825     1,106     16,681  
                               
   

Net loss before cumulative effect of adoption of FIN 46R

    (2,004 )   (4,698 )   (17,917 )   (26,015 )   (68,071 )   (26,309 )   (69,115 )
 

Cumulative effect of adoption of FIN 46R(1)

            (703 )                
                               
   

Net loss

  $ (2,004 ) $ (4,698 ) $ (18,620 ) $ (26,015 ) $ (68,071 ) $ (26,309 ) $ (69,115 )
                               

Basic and diluted net loss attributable per common unit(2)

  $ (0.05 ) $ (0.10 ) $ (0.38 ) $ (0.24 ) $ (0.36 ) $ (0.14 ) $ (0.35 )
                               

Basic and diluted weighted average number of common units

    42,774,193     45,567,426     49,095,347     107,712,405     189,161,855     182,432,532     197,239,108  

Other Financial Data:

                                           
 

Net cash provided by (used in):

                                           
   

Operating activities

  $ (75 ) $ (283 ) $ (3,195 ) $ (31,799 ) $ (26,370 ) $ (12,134 ) $ (16,106 )
   

Investing activities

    75     (124 )   (25,286 )   (311,281 )   (334,007 )   (107,222 )   (284,782 )
   

Financing activities

        980     30,244     346,500     358,107     119,371     307,710  

Selected Operating Data (at year end):

                                           
 

Aggregate operating capacity

                30 MW     92 MW              
 

Aggregate prospective capacity

    940 MW     1,818 MW     3,497 MW     3,222 MW     5,415 MW              
 

Aggregate contracted turbines

            30 MW     319 MW     1,316 MW              

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  As of December 31,    
 
 
  As of
June 30,
2008
 
 
  2003   2004   2005   2006   2007  
 
  (unaudited)
   
   
   
   
  (unaudited)
 
 
  (in thousands)
 

Balance Sheet Data:

                                     
 

Property, plant and equipment, net

  $ 62   $ 141   $ 484   $ 81,452   $ 192,076   $ 188,040  
 

Construction in progress

            29,075     85,153     346,320     463,566  
 

Total assets

    167     763     37,998     372,500     770,666     1,031,125  
 

Long-term debt, including debt with maturities less than one year

            35,195     257,884     465,449     701,031  
 

Members' capital (deficit)

    (2,851 )   (6,602 )   (24,672 )   88,519     68,795     104,600  

(1)
We adopted FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, an interpretation of FIN 46(R) effective December 31, 2006, and as a result of being the primary beneficiary of certain VIEs, were required to consolidate them in accordance with GAAP. FIN 46(R) defines a VIE as an entity in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE must be consolidated only by its primary beneficiary, which is defined as the party who, along with its affiliates and agents, absorbs a majority of the VIE's expected losses or receives a majority of the expected residual returns as a result of holding variable interests.

(2)
The basic and diluted net loss attributable per common unit for each of the five-year periods ended December 31, 2007 and the six month periods ended June 30, 2007 and 2008 has been presented for informational and historical purposes only. Upon completion of this offering, as a result of the reorganization events that have taken place in 2008 and other reorganization events that will take place immediately prior to completion of the offering as described in "The Reorganization and Our Holding Company Structure," the shares used in computing net earnings or loss per share will bear no relationship to these historical common units.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

        The following discussion is intended to assist in understanding our results of operations and our present financial condition. The historical financial data discussed below reflect the historical results of operations and financial condition of our operating company and do not give effect to our reorganization. See "The Reorganization and Our Holding Company Structure" and "Unaudited Pro Forma Financial Information," included elsewhere in this prospectus, for a description of our reorganization and its effect on our historical results of operations. Our consolidated financial statements and the accompanying notes included elsewhere in this prospectus contain additional information that should be referred to when reviewing this material. Statements in this discussion may be forward-looking. These forward-looking statements involve risks and uncertainties, including those discussed below, which could cause actual results to differ from those expressed.

Overview

        We are an independent North American wind energy company focused exclusively on the development, ownership and operation of wind energy projects. As of August 31, 2008, our portfolio of wind energy projects included approximately 5,564 MW of operating and prospective capacity, of which 92 MW were operating and 182 MW were under construction. We expect to start construction on a 203 MW project in 2008 and, as a result, to be simultaneously constructing three wind energy projects, representing 385 MW. Our goal is to have approximately 1,100 MW of operating capacity by the end of 2010 and we target the construction and commissioning of approximately 400 MW annually thereafter to achieve approximately 2,300 MW of operating capacity by the end of 2013. We have entered into purchase contracts for turbines with an aggregate generating capacity in excess of 1,300 MW, which are scheduled to be delivered or commissioned between 2008 and 2013. We expect this supply will be sufficient to meet all of our anticipated turbine needs in 2008 and 2009 and approximately 80% of our anticipated turbine needs in 2010. Our ability to complete the projects in our development pipeline and achieve our targeted capacity is subject to a number of risks and uncertainties as described in the "Risk Factors" section of this prospectus.

Factors Affecting Our Results of Operations

        The following are the principal factors that we believe have had a significant influence on our financial condition and results of operations for the periods presented:

Expansion of our business

        Since 2002, we have experienced substantial growth and we expect to continue significantly increasing our installed capacity over time. As we grow, we expect to require significant additional amounts of debt, tax equity financing and equity capital. To date, we have funded our development and construction expenditures through a combination of turbine supply loans, construction loans, term loans, tax equity financing and equity capital. As of June 30, 2008, we had $701.0 million of outstanding indebtedness, approximately $679.4 million of which matures prior to June 30, 2009. In addition, we had purchase obligations, principally turbine purchase commitments, of $1.2 billion at June 30, 2008, $435.3 million of which is payable before June 30, 2009. As a result of our recurring losses from operations, negative operating cash flows, accumulated deficit and need to obtain adequate funding to procure turbines and fund capital expenditures, the report of our independent registered public accounting firm as of and for the year ended December 31, 2007 contains an explanatory paragraph raising substantial doubt as to our ability to continue as a going concern. For further discussion of our indebtedness and purchase commitments, see "—Liquidity and Capital Resources."

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Overview of financing

        Our wind energy projects are financed with a combination of debt, tax equity financing and equity capital. At the initial stage of a project's development, we use a combination of equity capital and turbine supply loans to cover development expenses and turbine costs. Turbine supply loans are employed to finance approximately 60-90% of the cost of a project's turbines. Once a project moves to the construction phase, we use a combination of equity capital and construction loans to finance the construction of the project. Proceeds from the construction loans are typically used to fund construction and installation costs as well as to retire the turbine supply loans. Finally, once a project is complete and commercial operations begin, we permanently finance the project through a combination of term loans and tax equity financing transactions, the proceeds of which are used to retire the construction loans and provide for a return of a portion of equity capital. Although the percentage of each of these three forms of permanent financing varies regionally and by project, tax equity financing typically represents a majority of a project's permanent financing.

Turbine supply loans

        The majority of the total cost of a wind energy project is attributable to turbine purchases. Our turbine purchases have been and will continue to be our principal capital expenditure. During 2006 and 2007, we entered into purchase contracts for turbines with an aggregate cost of $298.0 million and $1.5 billion, respectively.

        In recent years, the combined effect of a limited number of turbine suppliers, the weakening dollar, rising commodity costs and increasing demand for turbines has led to escalating turbine prices. To mitigate supply-related uncertainty, we seek to secure and finance our anticipated turbine needs well in advance of our targeted installation dates. We have entered into purchase contracts with GE Energy and Clipper Windpower for turbines with an aggregate generating capacity in excess of 1,300 MW, which are scheduled to be delivered or commissioned between 2008 and 2013. We expect this supply will be sufficient to meet all of our anticipated turbine needs in 2008 and 2009 and approximately 80% of our anticipated turbine needs in 2010. We have also secured turbines for a portion of our anticipated development and construction needs for 2011, 2012 and 2013. See "Risk Factors—Risks Related to Our Business and the Wind Energy Industry—One of our key turbine suppliers, Clipper Windpower, has a limited operating history, has experienced certain technical issues with its wind turbine technology and may continue to experience similar issues."

        Generally, turbine suppliers require up-front payments upon execution of a turbine supply agreement and significant progress payments well in advance of turbine delivery. We finance our turbine supply agreements through a combination of turbine supply loans and equity capital. Our equity capital contributions to each project vary from 10-40% depending on the terms available from turbine supply loan lenders. As of June 30, 2008, we had approximately $444.5 million in turbine supply loans outstanding, and the balance of our existing turbine commitments was approximately $1.2 billion. We expect to continue to incur turbine indebtedness in the future as we grow. For additional information regarding our turbine loans, see "—Liquidity and Capital Resources" below.

Development financing

        We have historically funded the development expenditures of our projects, primarily consisting of permitting, community outreach and meteorological expenses, through equity capital contributions or debt guaranteed by certain of our current investors. In the future, we expect to fund the development of our wind energy projects with a combination of cash flows from operations, the proceeds of this offering and future debt and/or equity offerings.

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Construction loans

        After we have developed a wind energy project to the point where we are prepared to commence construction, we typically enter into a limited recourse construction loan. Proceeds from construction loans are typically used to retire turbine indebtedness and to pay construction costs, including costs to construct roads, substations, transmission lines and the balance of plant. Construction loans are generally secured by the project's assets. In certain instances we enter into a construction loan for a single project, while in other instances we are able to finance multiple projects through a single credit facility. We also use equity capital contributions to fund a portion of each project's construction costs.

Financing upon commencement of commercial operations

        Once construction of a wind energy project is completed and commercial operations commence we seek to finance the project on a long-term basis through a combination of term loans and tax equity financing, as described in more detail below.

         Term loans.    Term loans provide long-term debt financing and are repaid with project cash flows. In conjunction with our term loans, our projects often retain separate credit facilities to provide letters of credit. Our subsidiaries that raise term loan financing generally secure these term loans through pledges of membership interests in the project companies.

         Tax equity financing.    We generally seek to secure tax equity financing to provide the majority of each project's permanent capital needs. In a typical tax equity financing, we expect to receive an up-front cash payment of approximately 50-60% of a project's cost in exchange for an equity interest in our subsidiary that owns the project. These equity interests entitle the tax equity investors to receive a portion of the project's cash distributions from electricity sales and related hedging agreements, PTCs and taxable income or loss until such investors reach an agreed rate of return on their up-front cash payment, which we typically expect to occur in ten years. The availability of tax equity financing depends on federal tax attributes that encourage renewable energy development. These attributes primarily include (i) renewable energy PTCs, which are federal income tax credits related to the quantity of renewable energy produced and sold during a taxable year and (ii) accelerated depreciation of renewable energy assets as calculated under the Modified Accelerated Cost Recovery System of the Internal Revenue Code ("MACRS"). We do not generate sufficient taxable income to use all of the PTCs or the accelerated depreciation available to us under these programs. We seek to maximize project profitability, improve project returns and reduce equity capital requirements by monetizing the value of these incentives through tax equity financing transactions.

        The PTC incentive currently provides a $21 federal tax credit per MWh for a renewable energy facility that uses wind, geothermal or "closed-loop" bioenergy fuel sources in each of the first ten years of its operation, and applies to facilities that are placed in service before the end of 2009. These facilities will continue to benefit from the current PTC incentive until the end of the ten-year period from the date on which the facilities are placed in service. Our current tax equity financing model is substantially dependent on the PTC incentive and to the extent it is not extended our anticipated growth will be adversely affected. See "Risk Factors—Risks Related to Our Business and the Wind Energy Industry—The growth of our business depends upon the extension of the expiration date of the PTC, which currently expires on December 31, 2009, and other federal and state governmental policies and standards that support renewable energy development."

        The Tax Reform Act of 1986 established MACRS as the method to calculate depreciation for federal income tax purposes. Under MACRS, wind power assets are provided a depreciable life of five years, which is substantially shorter than the 15- to 20-year depreciable lives associated with traditional power generation facilities. Accelerated depreciation results in tax losses in the early stages of a wind energy project's life. Typically, 90% of a wind energy project's assets qualify for five-year accelerated depreciation under MACRS.

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        The up-front cash payment made by our tax equity investors is determined by discounting the projected future value of the cash distributions from electricity sales and related hedging agreements, PTCs and taxable income or loss that the tax equity investors are entitled to receive until such investors reach an agreed investment return on the up-front cash payment, which we typically expect to occur in ten years. The after-tax discount rate used for this calculation is an agreed-upon targeted investment return for the tax investor. As described in more detail in the table below, prior to achieving the targeted investment return, our tax equity investors receive substantially all of the project's cash distributions from electricity sales and related hedging agreements, PTCs and taxable income or loss. Following achievement of the targeted investment return, the allocation of the project's cash distributions from electricity sales and related hedging agreements, PTCs and taxable income or loss "flips" or reverses from our tax equity investors to us so that we receive substantially all of the project's cash distributions from electricity sales and related hedging agreements, PTCs and taxable income or loss from that point forward. If the project outperforms expectations, the flip will occur sooner and if a project underperforms, it will take longer for the flip to occur.

        To date, our projects' tax equity investors have been large financial institutions with significant taxable income. After giving effect to a tax equity financing, we retain day-to-day operational and management control of the applicable project. However, our tax equity financing agreements provide our tax equity investors with a number of approval rights, including approvals of annual budgets, indebtedness, incurrence of liens, sales of assets outside the ordinary course of business and litigation settlements. Tax equity investors do not receive a lien on the project's assets.

        Although the economic terms of each tax equity financing vary substantially, the following table provides an illustration of an allocation to tax equity investors of cash distributions, PTCs and taxable income or loss that may characterize a tax equity financing. The column titled "Cash Distributions" reflects the apportionment of cash distributions from electricity sales and related hedging agreements; the column titled "PTCs" reflects the allocation of PTCs for U.S. federal income tax purposes; and the column titled "Taxable Income or Loss" reflects the allocation of taxable income or loss for U.S. federal income tax purposes.

 
  Cash Distributions   PTCs(1)   Taxable Income
or Loss
 
 
  Project
Owner
  Tax Equity
Investors
  Project
Owner
  Tax Equity
Investors
  Project
Owner
  Tax Equity
Investors
 

Year 1 to Flip Date(2)

    30 %   70 %   1 %   99 %   1 %   99 %

Thereafter

    95 %   5 %   95 %   5 %   95 %   5 %

(1)
PTCs lapse after ten years of commercial operations and the assets are generally fully depreciated five years after commercial operations commence.
(2)
Actual flip dates, as discussed above, vary and depend on the date the tax equity investors earn the agreed upon targeted investment return.

        During the year ended December 31, 2007, we completed two tax equity financing transactions, receiving approximately $146.3 million in aggregate up-front payments in exchange for equity interests in our subsidiaries that own our Kaheawa Wind Power I and Mars Hill projects. As discussed above, these equity interests entitle our tax equity investors to substantially all of the cash distributions from electricity sales and related hedging agreements, PTCs and taxable income or loss generated by our Kaheawa Wind Power I and Mars Hill projects until the tax equity investors achieve their targeted investment returns. Upon the tax equity investors' achieving their targeted investment returns, we have the option to acquire the equity interests, at the then fair value, from the tax equity investors. For the year ended December 31, 2007, we made distributions of $23.7 million to our tax equity investors and a minority member of the subsidiary that owns our Kaheawa Wind Power I project. See "Certain Relationships and Related Party Transactions."

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        In January 2008, we executed an agreement for an additional $208.0 million tax equity financing related to a portfolio of our New York projects (Steel Winds I, Cohocton I and Prattsburgh I). Funding of this tax equity financing will occur in tranches upon commencement of commercial operations of each applicable project and the satisfaction of certain other conditions precedent. In August 2008, $19.7 million was funded with respect to our Steel Winds I project. We used these proceeds for working capital and to fund operations. Our counterparty in this tax equity financing is an indirect subsidiary of Lehman Brothers Holdings, Inc., which filed for bankruptcy on September 15, 2008. We are uncertain what impact the bankruptcy will have on the funding of the balance of this financing. We are currently in discussions with other tax equity investors to fund the balance of this financing if and to the extent our counterparty is unable to fund its remaining commitment when due, but such financing may not be available.

        Following the "flip" date for each tax equity financing transaction, we have the option to purchase our tax equity investors' equity interests at the then-current fair market value or, if greater, the investors' capital account balances.

        Under each of these transactions, we retained day-to-day management control of our subsidiaries and, therefore, will continue to consolidate our subsidiaries that own Kaheawa Wind Power I, Mars Hill and the New York projects into our consolidated financial results. These transactions have been accounted for as equity financings using a balance sheet methodology of accounting. See "—Critical Accounting Policies and Estimates—Tax Equity Transactions" for more information regarding our accounting for tax equity financing transactions.

Material Trends and Uncertainties

        As of August 31, 2008, our portfolio of wind energy projects included approximately 5,564 MW of operating and prospective capacity, of which 92 MW were operating and 182 MW were under construction. Our goal is to have approximately 1,100 MW of operating capacity by the end of 2010 and we target the construction and commissioning of approximately 400 MW thereafter to achieve approximately 2,300 MW by the end of 2013. The growth of our business will depend upon our ability to convert our pipeline of projects under development into operating projects. The development and construction of wind energy projects involves numerous risks and uncertainties. See "Risk Factors—Risks Related to Our Business and the Wind Energy Industry—The growth of our business depends on our ability to convert our pipeline of projects under development into operating projects." In the near term, we expect that our net losses and cash used in operating activities will increase compared to prior periods as we increase our development activities.

        The market prices of electricity and RECs materially affect the economic feasibility of our development projects and our results of operations. In the past twelve months, we have observed an upward trend in the price of electricity in the markets in which we operate based in part on the rising costs of fossil fuels. We have not observed any clear trend in the market price for RECs or capacity in the markets in which we operate as a result of the limited history and liquidity in these markets. If there is a sustained material decline in market prices for electricity, we may not be able to develop our pipeline of development projects economically.

        To limit the impact of market price variability on our revenues, we enter into financial hedges that are intended to cover quantities of electricity that we estimate we can produce with a high degree of certainty. However, the actual amount of electricity we generate from operations may be materially different from estimates for a variety of reasons, including variable wind conditions and turbine availability. In the event that a project does not generate the amount of electricity covered by the related hedge, we could incur significant losses under the financial hedge if electricity prices rise substantially above the fixed prices provided for in the hedge. See "Risk Factors—Risks Related to Our Business and the Wind Energy Industry—Our hedging strategy may not adequately manage our

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commodity price risk, may expose us to significant losses and may limit our ability to benefit from higher electricity prices." The impact of our hedges may result in significant volatility in our quarterly and annual financial results as we are required to mark our hedges to market through earnings on a periodic basis.

        During the six months ended June 30, 2008, we have experienced increased costs relating to key aspects of our development, financing and operational activities. These increases could have a negative impact on our future business, financial condition and results of operations, and include:

    the price of wind turbines and transportation costs due to, among other things, rising fuel costs;

    the cost of construction due to increased labor and subcontracting costs and increases in the prices of certain construction equipment that we rely on for turbine erection;

    the interest rates, target yields and fees we may have to pay in connection with the debt and tax equity financing structures that we use; and

    the prices we must pay to landowners for access to land with attractive wind resources.

        We believe that the costs for some or all of these items are likely to continue to increase in future periods and, therefore, could negatively impact our results of operations. In addition, we will continue to experience significant variability in our earnings due to increased project development activities, the commissioning of wind energy projects, volatility in commodity prices that affects the fair value of our financial hedges and the overall increased cost of expanding our business and public company compliance.

        We depend heavily on government policies supporting renewable energy, including the PTC, that enhance the economic feasibility of developing wind energy projects. The PTC is currently scheduled to expire on December 31, 2009. If the PTC is not extended or renewed, we would be unable to obtain tax equity financing, which could render certain of the projects in our portfolio uneconomic, increase our financing costs or otherwise adversely affect our financing efforts, increase our equity requirements and adversely affect our growth.

Components of Revenues and Expenses

        Set forth below is a description of the components of our revenues and expenses.

Revenues

        We generate revenues from the sale of electricity and capacity from our operating wind energy projects as well as from the sale of RECs attributable to such operations.

         Electricity.    We typically sell the power generated by our wind energy projects either pursuant to PPAs with local utilities or power companies or directly into the local power grid at market prices. To date, we have entered into four PPAs, with terms ranging from three to 20 years with fixed prices, market prices or a combination of fixed and market prices. We seek to hedge a significant portion of the market component of our power sales revenue. See "—Hedging and risk management activities" for a description of our hedging activities. For the year ended December 31, 2007, we generated 90% of our revenues from electricity sales and approximately 33% of our electricity sales were based on market prices. For the six months ended June 30, 2008, we generated 80% of our revenues from electricity sales and approximately 29% of our electricity sales were based on market prices.

         Capacity payments.    In some states in which we have operating projects, payments are made to energy generators, including wind energy projects, as a market incentive to promote the development and continued operation of capacity sufficient to meet regional land and reserve requirements. Market systems have been established to ensure that generators receive these payments based on their

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availability to generate electricity. Payments are generally allocated to wind energy projects based on the prior year's capacity for the peak hours during winter and summer qualifying periods. Capacity payments are not currently a significant source of revenue to us and are not broken out separately in our statement of operations. We believe significant opportunities for capturing the value of such payments may develop in the markets in which we operate.

         Renewable energy certificates.    Currently, 32 states and the District of Columbia have adopted RPS programs, 27 of which, along with the District of Columbia, require renewable generation to supply a varying range of total power production, typically from 10% to 20% escalating over time. The mandatory RPS programs in 21 of these states and the District of Columbia operate in tandem with a credit trading system in which generators buy and sell RECs for renewable power they generate in excess of state-mandated requirements or purchase RECs to cover any shortfall in their renewable power generation below state-mandated requirements. REC prices are driven by various market forces. Generally speaking, the higher or more stringent a state's RPS program, the more valuable the state's RECs. We generated 10% and 20% of our revenues from REC sales for the year ended December 31, 2007 and for the six months ended June 30, 2008, respectively.

Hedging and risk management activities

        Our ownership and operation of wind energy projects expose us to volatility in electricity prices. If we sell a project's electricity into a liquid ISO market, we seek to protect ourselves against variability in spot electricity prices by entering into a long-term (typically ten-year) financial hedge with a creditworthy financial institution ("swap counterparty") with respect to a specified amount ("notional quantity") of electricity projected to be generated at the project to secure the project's returns and stabilize our projected revenue stream. Under the terms of our existing financial hedges, we are not obligated to physically deliver or purchase electricity but, rather, we pay the swap counterparty a monthly amount equal to the product of (a) the prevailing market price for the project's electricity that we sell in that month and (b) the notional quantity; and the swap counterparty pays us a monthly amount equal to the product of (x) a specified fixed price and (y) the notional quantity.

         Hedging.    Our financial hedges cover quantities of electricity that we estimate we can produce with a high degree of certainty. As a result, gains or losses under the financial hedges should be offset by decreases or increases in our revenues from spot sales of electricity in liquid ISO markets. However, the actual amount of electricity we generate from operations may be materially different from our estimates for a variety of reasons, including variable wind conditions and turbine performance and availability. If a project does not generate the amount of electricity covered by its related hedge, we could incur significant losses under the financial hedge if electricity prices rise substantially above the fixed prices provided for in the hedge. If a project generates more electricity than is covered by its relevant hedge, the excess production will not be hedged and the revenues we derive will be subject to fluctuations in market prices.

        Once wind energy projects commence commercial operations, fair value changes and cash settlements related to our financial hedges are recorded in the consolidated statements of operations as risk management activities related to operating projects, a component of revenues. Prior to a wind energy project's commencing commercial operations, fair value changes and cash settlements related to these financial hedges are recorded in earnings in the consolidated statements of operations as risk management activities related to non-operating projects. Because we are required to mark-to-market the value of our hedges for financial reporting purposes, our quarterly and annual financial results will reflect changes in the value of these investments based on changes in the underlying commodity prices.

        We have not applied hedge accounting treatment to our hedging activities under SFAS No. 133; therefore, we are required to mark-to-market through earnings our swap contracts, which resulted in losses on these swap contracts for the years ended December 31, 2005, 2006, and 2007. These net

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losses were a result of increases in the underlying forward electricity and oil prices that the commodity swap contracts are intended to hedge. As commodity prices increase, we realize commensurate increases in the price for which we sell our variable rate electricity.

         Risk management activities.    In the year ended December 31, 2007, we recorded a loss of $11.5 million for risk management activities related to operating projects, including $10.0 million related to an oil swap we entered into to hedge variable revenue of our Kaheawa Wind Power I project. Payments under the hedge agreement are based on the estimated costs that our counterparty avoids in substituting our electrical production for the production it otherwise would have to generate by burning fossil fuels. This hedge agreement involves periodic notional quantity settlements in which we pay a monthly amount equal to the product of (a) the prevailing market price of WTI crude oil on NYMEX and (b) a notional quantity of oil; and we receive a monthly amount equal to the product of (x) a specified fixed price and (y) such notional quantity. Because WTI crude oil prices have increased substantially since we obtained the hedge agreement, we have made payments of $5.1 million associated with this oil swap from inception of the swap through June 30, 2008 and have a mark-to-market liability of $32.8 million as of June 30, 2008.

        We have reported the following fair value adjustments in our consolidated statements of operations related to our commodity price swaps for the years ended December 31, 2005, 2006 and 2007 and the six months ended June 30, 2007 and 2008:

 
  Year ended December 31,   Six Months
ended June 30,
 
 
  2005   2006   2007   2007   2008  
 
   
   
   
  (unaudited)
 
 
  (in thousands)
 

Gain (loss)

                               
 

Revenues:

                               
   

Risk management activities related to operating projects

  $   $ 9,770   $ (9,801 ) $ (1,330 ) $ (18,759 )
 

Expenses:

                               
   

Risk management activities related to non-operating projects

    (6,784 )   (13,131 )   (21,141 )   (2,156 )   (34,635 )
                       
   

Total loss attributable to commodity swap fair value adjustments

  $ (6,784 ) $ (3,361 ) $ (30,942 ) $ (3,486 ) $ (53,394 )
                       

        We seek to sell forward a portion of our RECs in an effort to hedge against future declines in REC prices. If our projects are unable to generate the amount of electricity necessary to earn the RECs sold forward or if we are unable for any reason to qualify our electricity for RECs in the relevant states, we may incur significant losses.

        For additional information regarding our hedging activities, please see "—Critical Accounting Policies and Estimates—Derivative Financial Instruments and Risk Management Activities."

Cost of revenues

         Wind energy project operating expenses.    We incur costs associated with operating our wind energy projects and turbine maintenance expenses for either parts or service not covered under our warranties. We expect these expenses to rise as additional projects become operational and as our warranties expire. Wind energy project operating expenses consist of such costs as contracted operations and maintenance fees, turbine and related equipment warranty fees, land rent, insurance, professional fees and permit compliance.

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         Depreciation and amortization of operating assets.    Cost of revenues also includes depreciation and amortization of operating assets.

Operating expenses

         Project development expenditures.    We incur project development costs for expenses such as initial permitting, land rights, preliminary engineering work, analysis of project wind resource, analysis of project economics and legal work. Permitting activities constitute a substantial component of our project development expenditures. We expense all project development costs until management deems a project probable of being technically, commercially and financially viable. This determination generally occurs in tandem with management's determination that a project should be classified as an advanced development project. See "Business—How We Classify Our Projects."

         General and administrative.    General and administrative expenses include the cost of finance, accounting and corporate administrative staff, corporate facilities costs, corporate development and marketing costs and legal and other professional fees.

Other expenses

         Interest expense, net of capitalized interest.    Interest expense consists primarily of payments of interest on our loans, and amortization of related debt issuance costs, to finance working capital and project development expenditures. Payments of interest on our loans, and amortization of related debt issuance costs, to finance the construction of wind energy projects and the acquisition of turbines and related equipment are capitalized until the projects are in service or when construction ceases or is terminated.

Minority interest in operations of subsidiaries

        Minority interest in operations of subsidiaries in the consolidated statement of operations reflects periodic changes in the value of the tax equity investors' investments. See "—Factors Affecting Our Results of Operations—Financing upon commencement of commercial operations—Tax equity financing."

Internal Controls

        We are required to design, implement and maintain effective controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis.

        In connection with the preparation of our consolidated financial statements as of and for the year ended December 31, 2007, we identified the following material weakness in our internal control over financial reporting:

        Our financial and accounting organization was not adequate to support our financial accounting and reporting needs. Specifically, we did not hire and retain a sufficient level of personnel with accounting knowledge and training in the application of generally accepted accounting principles required to prepare financial statements that are materially accurate or maintain effective internal control. The lack of a sufficient complement of personnel contributed to significant deficiencies specifically related to: (1) effective policies and procedures designed to ensure certain costs are capitalized in accordance with generally accepted accounting principles and captured in the appropriate accounting period; (2) an effective process to ensure the completeness of accounts payable and accrued expenses; and (3) an effective review and approval process, specifically related to journal entries. We

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have taken, or are in the process of taking, the following specific actions with respect to our identified control deficiencies:

    We have taken steps to improve the sufficiency and competency of our financial and accounting organization through the addition of experienced personnel. We have hired a new chief financial officer and added personnel to our accounting and financial reporting functions.

    We have designed and implemented a process that is expected to remediate the internal control deficiencies associated with the completeness of accounts and accrued expenses.

    We have designed and implemented a review and approval process that, when combined with the additional accounting and financial reporting personnel, is expected to remediate the internal control deficiencies we identified.

    We are reviewing and documenting our financial statement closing process to identify specific enhancements that may be made to further improve the overall effectiveness of our internal controls.

    We are undertaking an organizational redesign to more clearly align work flow with financial statement assertions and further increase the size and capabilities of the financial and accounting organization.

        We expect to remediate the material weaknesses described above by December 31, 2008. In addition, we have begun the process of documenting our internal controls in connection with the requirements of Section 404 of the Sarbanes Oxley Act of 2002. However, the measures we have taken or any future measures that we plan to or may take may not adequately remediate the material weakness. Failure to implement new or improved controls, or any difficulties encountered in the implementation of such controls, could result in a material misstatement in our annual or interim consolidated financial statements or otherwise cause investors to lose confidence in our reported financial information.

Critical Accounting Policies and Estimates

        Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles. In applying these critical accounting policies, our management uses its judgment to determine the appropriate assumptions to be used in making certain estimates. These estimates are based on management's historical experience, the terms of existing contracts, management's observance of trends in the wind energy industry, information provided by our customers and information available to management from other outside sources, as appropriate. These estimates are subject to an inherent degree of uncertainty.

        Estimates, assumptions and judgments are used by us for such items as the depreciable lives of property, plant and equipment, amortization periods for identifiable intangible assets, valuation of long term swap contracts, asset retirement obligations and assumptions for share-based payments, testing long-lived intangible assets for impairment and to determine their fair value if impaired. These estimates, assumptions and judgments are derived and continually evaluated based on available information, historical experience and various other assumptions believed to be reasonable under the circumstances. This experience derives from management's industry experience. To the extent these estimates are materially incorrect and need to be revised, our reported operating results may be materially adversely affected.

        Our critical accounting policies include:

         Revenue Recognition.    We earn revenue from two primary sources: (1) the sale of electricity and (2) the sale of RECs. We recognize revenues from the sale of electricity under long-term power

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purchase agreements based upon the output delivered at rates specified under the contracts. We recognize revenues from the sale of RECs based upon the certificates delivered at rates specified under the contracts. We defer recognition of revenue in instances when not all criteria to recognize revenue have been met.

        We evaluate our long-term power purchase agreements to determine whether they are leases pursuant to Emerging Issues Task Force Issue No. 01-8, Determining Whether an Arrangement is a Lease and SFAS No. 13, Accounting for Leases. At the inception of the lease or subsequent modification, we determine whether the lease is an operating or capital lease based upon its terms and characteristics. We have determined that our long-term power purchase agreements for Kaheawa Wind Power I and Mars Hill are operating leases that have significant contingent rental payments that are dependent on future operating characteristics of the respective wind energy projects, such as wind availability. We recognize contingent rental income as a component of our electricity sales when it becomes probable of receipt.

         Property, Plant and Equipment.    Property, plant and equipment are stated at cost, less accumulated depreciation. Renewals and betterments that increase the useful lives of the assets are capitalized. Repairs and maintenance expenditures that increase the efficiency of the assets are expensed as incurred. Wind energy project equipment and related assets are depreciated over their estimated useful life on a straight-line basis over 20 years. Other non-wind-energy-project-related property, plant and equipment are depreciated over their estimated useful lives on a straight-line basis ranging from three to seven years.

        Construction-in-progress payments, insurance, interest and other costs related to construction activities are capitalized. Construction in progress is reclassified to other balances within property, plant and equipment as each turbine commences commercial operations. Depreciation of these amounts begins on the date each turbine commences commercial operations.

        Many of our construction and equipment procurement agreements contain damage clauses relating to construction delays and contractually specified performance targets. These clauses cover a portion of the lost margin or revenues from the wind energy project's failure to operate when targeted or to perform as guaranteed. Payments received pursuant to these clauses are recorded as a reduction of construction-in-progress.

         Project Development Costs.    We capitalize project development costs as construction in progress once management deems a project probable of being technically, commercially and financially viable. This determination generally occurs in tandem with management's determination that a project should be classified as an advanced development project. See "Business—How We Classify Our Projects."

         Impairment of Long-Lived Assets.    Long-lived assets primarily include property, plant and equipment. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we periodically review long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flows to the recorded value of the asset. If there is indication of impairment, the asset is written down to its estimated fair value based on a discounted cash flow analysis. Determining the fair value of long-lived assets entails the exercise of judgment by management and different judgments could yield different results.

         Derivative Financial Instruments and Risk Management Activities.    In the normal course of business, we employ financial instruments to manage our exposure to fluctuations in interest rates and commodity prices. We apply the provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, which requires that all derivative instruments be recorded in the consolidated balance sheets at their respective fair values. When specific hedge accounting criteria are

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not met, SFAS No. 133 requires that all changes in a derivative's fair value be recognized currently in earnings.

        Special accounting for qualifying hedges allows a derivative's gains and losses to offset related results on the hedged item in the income statement and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. We have not formally documented or designated our interest and commodity swaps as hedges, and therefore do not apply hedge accounting to these instruments. In accordance with provisions of SFAS No. 133, these instruments have been marked-to-market through earnings. The estimated fair values of derivative instruments are calculated based on market rates. These values represent the estimated amounts we would receive or pay to terminate agreements, taking into consideration current market rates and the current creditworthiness of the counterparty.

        We use interest rate swap agreements to convert our anticipated cash payments under our variable rate financing to a fixed rate basis. These agreements involve the receipt of variable payments in exchange for fixed payments over the term of the agreements without the exchange of the underlying principal amounts.

        We use commodity swap agreements to manage our exposure to commodity price volatility inherent in our power sales contracts or when selling electricity into an open market. Under the terms of our existing financial hedges, we are not obligated to physically deliver or purchase electricity. Instead, we pay the swap counterparty a monthly amount equal to the product of (a) the prevailing market price for the project's electricity that we sell in that month and (b) the notional quantity; and the swap counterparty pays us a monthly amount equal to the product of (x) a specified price and (y) the notional quantity.

        Prior to a wind energy project's commencing commercial operations, fair value changes and cash settlements related to commodity derivative instruments are recorded in earnings in the consolidated statements of operations as risk management activities related to non-operating projects. Once wind energy projects commence commercial operations, fair value changes and cash settlements related to commodity swaps are recorded in the consolidated statements of operations as a component of revenue.

         Tax Equity Transactions.    We account for minority interests in projects where we have entered into our tax equity financings using a balance sheet methodology. Under this methodology, the amount reported as minority interest in our consolidated balance sheet represents the amount the institutional tax equity investors would receive, at each balance sheet date, if the net assets of the projects subject to the financing were liquidated at the values reflected on our balance sheet. We recognize periodic changes in minority interest in the consolidated balance sheets in the consolidated statements of operations as minority interest in operations of subsidiaries.

         Fair Value Measurements.    On January 1, 2008, we adopted the provisions of SFAS No. 157, Fair Value Measurements, for certain financial assets and financial liabilities that are measured at fair value on a recurring basis. In February 2008, we adopted FASB Staff Position ("FSP") No. 157-2, Partial Deferral of the Effective Date of Statement 157, which deferred the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities measured at fair value on a nonrecurring basis to fiscal years beginning after November 15, 2008. SFAS No. 157 provides a consistent definition of fair value, with a focus on exit price from the perspective of a market participant.

        We hold interest rate and commodity price swap agreements that are carried at fair value. We determine fair value of interest rate and commodity swap agreements based upon quoted prices when available or through the use of alternative approaches when market quotes are not readily accessible or available.

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        Valuation techniques for fair value are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our best estimate, considering all relevant information. These valuation techniques involve some level of management estimation and judgment. The valuation process to determine fair value also includes making appropriate adjustments to the valuation model outputs to consider risk factors. The fair value hierarchy of our inputs used to measure the fair value of our assets and liabilities consists of three levels:

    Level 1—Quoted prices for identical instruments in active markets.

    Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

    Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

        If inputs used to measure an asset or liability fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the asset or liability. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

        In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and liabilities that are required to be measured at fair value as of June 30, 2008:

 
  June 30, 2008  
 
  Fair Value Measurements Using    
 
 
  Liabilities at Fair Value  
 
  Level 1   Level 2   Level 3  
 
  (Unaudited)
 

Liabilities:

                         
 

Interest rate derivatives

  $   $ 764   $   $ 764  
 

Commodity price swap derivatives

        32,818     61,663     94,481  
                   

  $   $ 33,582   $ 61,663   $ 95,245  
                   

Recent Accounting Pronouncements

        In December 2007, the FASB issued SFAS No. 141(R), Business Combinations and SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of Accounting Research Bulletin No. 51. These statements require most identifiable assets, liabilities, noncontrolling interests and goodwill acquired in a business combination to be recorded at "full fair value" and require noncontrolling interests (previously referred to as minority interests) to be reported as a component of equity, which changes the accounting for transactions with noncontrolling interest holders. Both statements are effective for us for the fiscal year beginning January 1, 2009. Early adoption is not permitted. SFAS 141(R) will be applied to business combinations occurring after the effective date. We are in the process of evaluating the impact, if any, that this statement will have on our consolidated results of operations and financial position.

        In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities. This statement is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after

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November 15, 2008, with early application encouraged. We are currently evaluating the impact, if any, that this statement will have on our disclosures related to hedging activities.

        In April 2008, the FASB issued FASB Staff Position No. FAS 142-3, Determination of the Useful Life of Intangible Assets. This FSP amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R) and other U.S. generally accepted accounting principles. We are in the process of evaluating the impact, if any, that this statement will have on our consolidated results of operations and financial position.

Effects of Inflation

        Inflation in the U.S. has been relatively low in recent years and did not have a material impact on our results of operations for the years ended December 31, 2005, 2006 or 2007. However, since mid-2007 commodity prices, particularly oil and gas prices, have risen substantially, resulting in increased material and transportation costs. For example, the cost of steel required to construct our wind energy projects and the cost to transport turbines and other materials to our project sites have risen significantly. If commodity prices remain at current levels or continue to rise, inflation may have a material impact on our results of operations.

Stock-Based and Other Compensation

        Effective January 1, 2006, we adopted SFAS No. 123(R), Share-Based Payment, which establishes the accounting for employee stock based awards. Under the provisions of SFAS No. 123(R), stock based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period of the grant). We recognize share based compensation expenses associated with our Series B Units on a straight-line basis over the requisite service period using the fair value method. The fair value of each Series B Unit is estimated on the date of grant using a probability weighted expected return model. Under a probability weighted expected return model, the value of an enterprise equity instrument is estimated based upon an analysis of future values assuming various possible future liquidity events. Equity instrument value is based upon the probability weighted present value of expected cash flows, considering each of the possible future events, as well as the rights and preferences of each share class.

Effects of the Reorganization

        On May 9, 2008, we were incorporated as a Delaware corporation. After the completion of the reorganization and this offering, our outstanding capital will consist of Class A common stock and Class B common stock. Our Class A common stock will be held by the investors in this offering as well as entities in the D. E. Shaw group. Our Class B common stock will be held by our Sponsors, certain of our employees and other existing investors. Our Class B common stock (together with the corresponding number of Series B Units) is, subject to certain limitations, convertible into Class A common stock at the election of the holders thereof and votes together with the Class A common stock as a single class. After the completion of the reorganization and this offering our Sponsors will own    % of our outstanding common stock on a combined basis (        % if the underwriters exercise their option to purchase additional shares of Class A common stock in full) and will have effective control over the outcome of votes on all matters requiring approval by our stockholders.

        We were formed in contemplation of this offering and upon its completion all of our business and operations will continue to be conducted through First Wind Holdings, LLC, which owns all of our operating subsidiaries. We will be the sole managing member of First Wind Holdings, LLC. In

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connection with the reorganization we are completing immediately prior to this offering, all of the outstanding equity of First Wind Holdings, LLC will be either exchanged for our Class A common stock or reclassified into Series B Units of First Wind Holdings, LLC. Our Sponsors, certain of our employees and other existing investors will own all of First Wind Holdings, LLC's Series B Units, which have no voting rights, except with regard to certain amendments of First Wind Holdings, LLC's limited liability company agreement that adversely affect the rights of holders of Series B Units. Each holder of Series B Units in First Wind Holdings, LLC will receive an equal number of shares of our Class B common stock, which (together with the corresponding number of Series B Units) is convertible into Class A common stock. Certain entities in the D. E. Shaw group have elected to receive Class A common stock in lieu of receiving Series B Units. For more detailed information regarding our reorganization and holding company structure, see "The Reorganization and Our Holding Company Structure."

        Following the reorganization and this offering, our only material asset will be our ownership of approximately        % of the membership units of First Wind Holdings, LLC and our only business will be to act as the sole managing member of First Wind Holdings, LLC. As such, we will operate and control all of its business and affairs and will consolidate its financial results into our financial statements. The ownership interests of holders of Series B Units of First Wind Holdings, LLC will be accounted for as a minority interest in our consolidated financial statements after this offering.

        Our reorganization and the new holding company structure are expected to increase our share of the tax basis in the tangible and intangible assets of First Wind Holdings, LLC. In addition, future exchanges of Series B Units, together with a corresponding number of shares of Class B common stock, for shares of our Class A common stock are expected to result in additional increases in our tax basis. These increases in tax basis, which would not have been available but for the reorganization, are expected to reduce the amount of tax that we would otherwise be required to pay in the future. We may be required to pay a portion of the cash savings we actually realize from such increase to the holders of the Series B Units, which include our Sponsors and certain members of management, pursuant to a tax receivable agreement. See "—Tax Receivable Agreement."

        First Wind Holdings, LLC is currently taxed as a partnership for federal income tax purposes. Therefore, we are not subject to entity-level federal income taxation, and our taxes with respect to First Wind Holdings, LLC are payable by our equity holders at rates applicable to them. Following the reorganization and this offering, earnings recorded by us will be subject to federal income taxation. For a more complete description of our reorganization and other related party transactions see "Certain Relationships and Related Party Transactions."

Public Company Expenses

        We believe that our general and administrative expenses will increase in connection with the completion of this offering. This increase will consist of legal and accounting fees and additional expenses associated with compliance with the Sarbanes-Oxley Act of 2002 and other regulations. We anticipate that our ongoing general and administrative expenses will also increase as a result of being a publicly traded company. This increase will be due primarily to the cost of accounting support services, filing annual and quarterly reports with the SEC, investor relations, directors' fees, directors' and officers' insurance, and registrar and transfer agent fees. As a result, we believe that our general and administrative expenses for future periods will increase significantly. Our consolidated financial statements following the completion of this offering will reflect the impact of these increased expenses and affect the comparability of our financial statements with periods prior to the completion of this offering.

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Results of Operations

Six Months Ended June 30, 2007 and 2008

 
  Six Months ended
June 30,
 
 
  2007   2008   % Change  
 
  (unaudited)
(in thousands)

   
 

Revenues:

                   
 

Revenues

  $ 8,397   $ 13,863     65 %
 

Risk management activities related to operating projects

    (1,835 )   (21,300 )   1,061  
                 
   

Total revenues

    6,562     (7,437 )   213  
                 

Cost of revenues:

                   
 

Wind energy project operating expenses

    4,675     4,501     4  
 

Depreciation and amortization of operating assets

    4,162     4,612     11  
                 
   

Total cost of revenues

    8,837     9,113     3  
                 
   

Gross loss

    (2,275 )   (16,550 )   627  
                 

Project development expenditures

    13,418     15,685     17  

General and administrative

    5,898     14,542     147  

Depreciation and amortization

    303     1,061     250  
                 
   

Total expenditures

    19,619     31,288     59  
                 
   

Loss from operations

    (21,894 )   (47,838 )   118  

Risk management activities related to non-operating projects

    (2,156 )   (34,635 )   1,506  

Other income

    262     29     89  

Interest expense, net of capitalized interest

    (3,627 )   (3,352 )   8  
                 
   

Net loss before minority interest in operations of subsidiaries

    (27,415 )   (85,796 )   211  

Minority interest in operations of subsidiaries

    1,106     16,681     1,408  
                 
   

Net loss

    (26,309 )   (69,115 )   163  
                 

Revenues

         Revenues.    Revenues for the six months ended June 30, 2008 were $13.9 million, compared with $8.4 million for the six months ended June 30, 2007. Our change in revenues is discussed in detail below:

         Electricity sales.    Electricity sales for the six months ended June 30, 2008 were $11.1 million, compared with $8.4 million for the six months ended June 30, 2007. This increase was principally attributable to: (1) Mars Hill's commencing commercial operations on March 27, 2007; and (2) Steel Winds I's commencing commercial operations on June 1, 2007.

         Renewable energy certificates and other revenues.    Total capacity payments and sales of RECs for the six months ended June 30, 2008 were $2.8 million, compared with $45 thousand for the six months ended June 30, 2007. This increase was attributable to: (1) Mars Hill's commencing commercial operations on March 27, 2007; and (2) Steel Winds I's commencing commercial operations on June 1, 2007.

         Risk management activities related to operating projects.    Risk management activities related to operating projects resulted in a loss of $21.3 million for the six months ended June 30, 2008, compared with a loss of $1.8 million for the six months ended June 30, 2007. The $19.5 million increase for the six months ended June 30, 2008 compared to the same period in 2007 relates to the $18.8 million of

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mark-to-market losses on two commodity swap contracts that were executed in August 2007 and $2.5 million of cash settlements losses on the same commodity swaps.

        The following table sets forth a breakdown of our risk management activities related to operating projects for the periods indicated:

 
  Six Months
ended June 30,
 
 
  2007   2008  
 
  (unaudited)
(in thousands)

 

Net cash settlements

  $ (505 ) $ (2,541 )

Fair value changes

    (1,330 )   (18,759 )
           

Total

  $ (1,835 ) $ (21,300 )
           

Cost of revenues

         Wind energy project operating expenses.    Wind energy project operating expenses for the six months ended June 30, 2008 were $4.5 million, compared with $4.7 million for the six months ended June 30, 2007. The $0.2 million decrease for the six months ended June 30, 2008 compared to the same period in 2007 was attributable to the decrease in site maintenance expenses of $0.3 million incurred at Mars Hill offset by an increase in substation maintenance costs and equipment rentals totaling $0.1 million.

         Depreciation and amortization of operating assets.    Depreciation and amortization of operating assets for the six months ended June 30, 2008 was $4.6 million, compared with $4.2 million for the six months ended June 30, 2007. This increase was principally attributable to: (1) Mars Hill's commencing commercial operations on March 27, 2007; and (2) Steel Winds I's commencing commercial operations on June 1, 2007.

Expenditures

         Project development expenditures.    Project development expenditures for the six months ended June 30, 2008 were $15.7 million, compared with $13.4 million for the six months ended June 30, 2007. The $2.3 million increase for the six months ended June 30, 2008 compared to the same period in 2007 was attributable to an increase in expenses for land lease agreements totaling $3.9 million offset by decreased legal, engineering, and consulting costs totaling $1.6 million.

         General and administrative expenses.    General and administrative expenses for the six months ended June 30, 2008 were $14.5 million, compared with $5.9 million for the six months ended June 30, 2007. The increase of $8.6 million for the six months ended June 30, 2008 compared to the same periods in 2007 was principally attributable to: (1) an increase in legal and consulting expenditures of $1.6 million; (2) the expansion of our business, which resulted in an increase of $6.9 million for the six months ended June 30, 2008 in salaries and benefits related to increased headcount; (3) a $0.2 million increase for the six months ended June 30, 2008 in corporate facilities costs; and (4) a $0.4 million increase for the six months ended June 30, 2008 in promotion and advertising.

         Depreciation and amortization.    Depreciation and amortization for the six months ended June 30, 2008 was $1.1 million, compared with $0.3 million for the six months ended June 30, 2007. This increase was primarily attributable to: (1) an increase in capital expenditures related to anemometers to perform wind resource analysis at our development projects; (2) corporate assets such as vehicles, office equipment and furniture; and (3) depreciation of construction equipment.

         Risk management activities related to non-operating projects.    Risk management activities related to non-operating projects for the six months ended June 30, 2008 was a loss of $34.6 million, compared

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with a loss of $2.2 million for the six months ended June 30, 2007. Risk management activities related to non-operating projects represent the mark-to-market adjustments related to commodity swaps prior to the relevant projects' commencing commercial operations. The losses for the six months ended June 30, 2008 compared to the same period in 2007 were primarily attributable to the effect of increasing electricity prices for Zone C of NYISO and ISO-NE on our electricity hedge for the six months ended June 30, 2008.

Other expenses

         Other income.    Other income for the six months ended June 30, 2008 was $0 million, compared with $0.3 million for the six months ended June 30, 2007. Other income consisted primarily of interest income earned on cash held in overnight sweep checking accounts and restricted cash money market accounts.

         Interest expense, net of capitalized interest.    Interest expense for the six months ended June 30, 2008 was $3.4 million, compared with $3.6 million for the six months ended June 30, 2007. The increase for the six months ended June 30, 2008 compared to the same periods in 2007 was primarily attributable to an increase in interest on borrowings principally under our revolving loan and certain term loans, partially offset by lower interest expense on non-recourse project debt at Mars Hill which was repaid in March 2007. We incurred gross interest expense of $20.2 million for the six months ended June 30, 2008, compared with $11.3 million for the six months ended June 30, 2007. We capitalized $16.8 million related to the construction of our wind energy projects during the six months ended June 30, 2008, compared with $7.7 million during the six months ended June 30, 2007.

Minority interest in operations of subsidiaries

        Minority interest in operations of subsidiaries for the six months ended June 30, 2008 was $16.7 million, compared with $1.1 million for the six months ended June 30, 2007. We account for minority interests in projects where we have entered into tax equity financings using a balance sheet methodology. Under this methodology, the amount reported as minority interest in our consolidated balance sheet represents the amount the institutional investors would receive at each balance sheet date if the net assets of the projects subject to the financing were liquidated at the values reflected on our balance sheet. This increase was primarily attributable to the recognition of periodic changes in minority interest in the consolidated balance sheets using a balance sheet methodology of accounting for tax equity financing transactions consummated in March and August 2007.

        Minority interest in operations of subsidiaries for the six months ended June 30, 2008 and 2007 represent periodic changes in a minority member's equity in the subsidiaries that own our Kaheawa Wind Power I wind energy project and our Mars Hill wind energy project.

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Years Ended December 31, 2006 and 2007

 
  Year ended December 31,    
 
 
  2006   2007   % Change  
 
  (in thousands)
   
 

Revenues:

                   
 

Revenues

  $ 7,063   $ 23,817     237 %
 

Risk management activities related to operating projects

    8,848     (11,471 )   230  
                 
   

Total revenues

    15,911     12,346     22  
                 

Cost of revenues:

                   
 

Wind energy project operating expenses

    1,339     9,175     585  
 

Depreciation and amortization of operating assets

    1,945     8,800     352  
                 
   

Total cost of revenues

    3,284     17,975     447  
                 
   

Gross profit (loss)

    12,627     (5,629 )   145  
                 

Project development expenditures

    16,028     25,861     61  

General and administrative

    6,598     13,308     102  

Depreciation and amortization

    294     1,215     313  
                 
   

Total expenditures

    22,920     40,384     76  
                 
   

Loss from operations

    (10,293 )   (46,013 )   347  

Risk management activities related to non-operating projects

    (13,131 )   (21,141 )   61  

Other income

    282     843     199  

Interest expense, net of capitalized interest

    (3,049 )   (9,585 )   214  
                 
   

Net loss before minority interest in operations of subsidiaries

    (26,191 )   (75,896 )   190  

Minority interest in operations of subsidiaries

    176     7,825     4,346  
                 
   

Net loss

  $ (26,015 ) $ (68,071 )   162 %
                 

Revenue

         Revenues.    Revenues for the year ended December 31, 2007 were $23.8 million, compared with $7.1 million for the year ended December 31, 2006. Our change in revenues is discussed in detail below:

         Electricity sales.    Electricity sales for the year ended December 31, 2007 were $21.5 million, compared with $6.6 million for the year ended December 31, 2006. This increase was principally attributable to: (1) Kaheawa Wind Power I's being operational for twelve months in 2007 compared to approximately six months in 2006; (2) Mars Hill's commencing commercial operations on March 27, 2007; and (3) Steel Winds I's commencing commercial operations on June 1, 2007.

         Renewable energy certificates and other revenues.    RECs and other revenues for the year ended December 31, 2007 were $2.3 million, compared with $0.5 million for the year ended December 31, 2006. This increase was attributable to: (1) Mars Hill's commencing commercial operations on March 27, 2007; and (2) Steel Winds I's commencing commercial operations on June 1, 2007. Other revenues for the year ended December 31, 2006 represented revenues earned on providing administrative services to a related party that was developing wind energy projects. We discontinued providing these services in 2006 and do not anticipate earning similar revenues in the future.

         Risk management activities related to operating projects.    Risk management activities related to operating projects resulted in a loss of $11.5 million for the year ended December 31, 2007, compared

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with a gain of $8.8 million for the year ended December 31, 2006. This decrease was principally attributable to movements in underlying commodity prices.

        The following table sets forth a breakdown of our risk management activities related to operating projects for the years indicated:

 
  Years ended December 31,  
 
  2006   2007  
 
  (in thousands)
 

Net cash settlements

  $ (922 ) $ (1,670 )

Fair value changes

    9,770     (9,801 )
           

Total

  $ 8,848   $ (11,471 )
           

Cost of revenues

         Wind energy project operating expenses.    Wind energy project operating expenses for the year ended December 31, 2007 were $9.2 million, compared with $1.3 million for the year ended December 31, 2006. This increase was principally attributable to: (1) Kaheawa Wind Power I's being operational for twelve months in 2007 compared to approximately six months in 2006; (2) Mars Hill's commencing commercial operations on March 27, 2007; and (3) Steel Winds I's commencing commercial operations on June 1, 2007.

         Depreciation and amortization of operating assets.    Depreciation and amortization of operating assets for the year ended December 31, 2007 was $8.8 million, compared with $1.9 million for the year ended December 31, 2006. This increase was principally attributable to: (1) Kaheawa Wind Power I's being operational for twelve months in 2007 compared to approximately six months in 2006; (2) Mars Hill's commencing commercial operations on March 27, 2007; and (3) Steel Wind I's commencing commercial operations on June 1, 2007.

Expenditures

         Project development expenditures.    Project development expenditures for the year ended December 31, 2007 were $25.9 million, compared with $16.0 million for the year ended December 31, 2006. Development personnel expenditures increased from $1.1 million in 2006 to $5.8 million in 2007 as a result of a two-fold increase in employee headcount to support our rapid growth. Increases in the cost of the procurement of land leases of $3.0 million and other professional fees of $2.7 million incurred to advance the development of our Cohocton I, Prattsburgh I, Stetson I, Milford I and Sheffield wind energy projects also contributed significantly to the change from 2006 to 2007.

         General and administrative expenses.    General and administrative expenses for the year ended December 31, 2007 were $13.3 million, compared with $6.6 million for the year ended December 31, 2006. This increase was principally attributable to an expansion of our business operations to support the growth of our company, including: increased salaries and benefits of $3.7 million as a result of a doubling of our employee headcount, travel expenses of $1.5 million and corporate facilities costs of $0.9 million.

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         Depreciation and amortization.    Depreciation and amortization for the year ended December 31, 2007 was $1.2 million, compared with $0.3 million for the year ended December 31, 2006. This increase was primarily attributable to an increase in capital expenditures related to anemometers to perform wind resource analysis at our development projects; corporate assets such as vehicles, office equipment and furniture; and depreciation of construction equipment.

         Risk management activities related to non-operating projects.    Risk management activities related to non-operating projects for the year ended December 31, 2007 were a loss of $21.1 million, compared with a loss of $13.1 million for the year ended December 31, 2006. Risk management activities related to non-operating projects represent the mark-to-market adjustments related to commodity swaps prior to the relevant project's commencing commercial operations. The losses were attributable to two commodity swaps in 2007, compared with a single commodity swap in 2006.

Other expenses

         Other income.    Other income for the year ended December 31, 2007 was $0.8 million, compared with $0.3 million for the year ended December 31, 2006. Other income consists primarily of interest income earned on cash held in overnight sweep checking accounts and restricted cash money market accounts.

         Interest expense, net of capitalized interest.    Interest expense for the year ended December 31, 2007 was $9.6 million, compared with $3.0 million for the year ended December 31, 2006. This increase in 2007 was primarily attributable to interest expense on non-recourse project debt at Kaheawa Wind Power I and Mars Hill, which commenced commercial operations June 2006 and March 2007, respectively, and interest on borrowings related to project development and general and administrative expenses. We incurred gross interest expense of $27.3 million and $14.4 million for the years ended December 31, 2007 and 2006, respectively, and capitalized $17.7 million and $11.3 million related to the construction of our wind energy projects during the years ended December 31, 2007 and 2006, respectively. Interest expense for the year ended December 31, 2007 included $2.1 million of deferred financing costs that were written off as a result of the repayment of the term financing related to Kaheawa Wind Power I.

Minority interest in operations of subsidiaries

        Minority interest in operations of subsidiaries for the year ended December 31, 2007 was $7.8 million, compared with $0.2 million for the year ended December 31, 2006. We account for minority interests in projects where we have entered into tax equity financings using a balance sheet methodology. Under this methodology, the amount reported as minority interest in our consolidated balance sheet represents the amount the institutional investors would receive at each balance sheet date if the net assets of the projects subject to the financing were liquidated at the values reflected on our balance sheet. This increase was primarily attributable to the recognition of periodic changes in minority interest in the consolidated balance sheets using a balance sheet methodology of accounting for tax equity transactions consummated in March and August 2007.

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Years Ended December 31, 2005 and 2006

 
  Year ended December 31,    
 
 
  2005   2006   % Change  
 
  (in thousands)
   
 

Revenues:

                   
 

Revenues

  $ 72   $ 7,063     9,710 %
 

Risk management activities related to operating projects

        8,848      
                 
   

Total revenues

    72     15,911     21,999  
                 

Cost of revenues:

                   
 

Wind energy project operating expenses

        1,339      
 

Depreciation and amortization of operating assets

        1,945      
                 
   

Total cost of revenues

        3,284      
                 
   

Gross profit

    72     12,627     17,438  
                 

Project development expenditures

    6,706     16,028     139  

General and administrative

    1,557     6,598     324  

Depreciation and amortization

    158     294     86  
                 
   

Total expenditures

    8,421     22,920     172  
                 
   

Loss from operations

    (8,349 )   (10,293 )   23  

Risk management activities related to non-operating projects

    (6,784 )   (13,131 )   94  

Other income

    19     282     1,384  

Interest expense, net of capitalized interest

    (2,803 )   (3,049 )   9  
                 
   

Net loss before minority interest in operations of subsidiaries

    (17,917 )   (26,191 )   46  

Minority interest in operations of subsidiaries

        176      
                 
   

Net loss before cumulative effect of adoption of FIN 46R

  $ (17,917 ) $ (26,015 )   45 %
                 

Revenues

         Revenues.    Revenues for the year ended December 31, 2006 were $7.1 million, compared with $0.1 million for the year ended December 31, 2005. Our change in revenues is discussed in detail below:

         Electricity sales.    Electricity sales for the year ended December 31, 2006 were $6.6 million, compared with $0 for the year ended December 31, 2005. This increase was attributable to Kaheawa Wind Power I's commencing commercial operations on June 22, 2006.

         Renewable energy certificates and other revenues.    We did not have any REC sales for the years ended December 31, 2006 and 2005. Other revenues for the year ended December 31, 2006 were $0.5 million, as compared with $0.1 million for the year ended December 31, 2005. Other revenues represent revenues earned on providing administrative services to a related party that was developing wind energy projects. We discontinued providing these services in 2006 and do not anticipate earning similar revenues in the future.

         Risk management activities related to operating projects.    Risk management activities related to operating projects resulted in a gain of $8.8 million for the year ended December 31, 2006, compared with $0 for the year ended December 31, 2005. This gain was attributable to a mark-to-market gain of $9.8 million and net cash settlement loss of $0.9 million on the Kaheawa Wind Power I oil hedge.

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Cost of Revenues

         Wind energy project operating expenses.    Wind energy project operating expenses for the year ended December 31, 2006 were $1.3 million, as compared with $0 for the year ended December 31, 2005. This increase was attributable to Kaheawa Wind Power I's commencing commercial operations on June 22, 2006.

         Depreciation and amortization of operating assets.    Depreciation and amortization of operating assets for the year ended December 31, 2006 was $1.9 million, as compared with $0 for the year ended December 31, 2005. This increase was attributable to Kaheawa Wind Power I's commencing commercial operations on June 22, 2006.

Expenditures

         Project development expenditures.    Project development expenditures for the year ended December 31, 2006 were $16.0 million, compared with $6.7 million for the year ended December 31, 2005. This increase was primarily attributable to $4.2 million of development expenses in order to advance the development of early and intermediate projects in Hawaii and New York. Increases in legal expenses of $2.1 million and professional fees of $2.4 million related to advancing the wind energy projects also contributed significantly to the change from 2005 to 2006.

         General and administrative.    General and administrative expenses for the year ended December 31, 2006 were $6.6 million, compared with $1.6 million for the year ended December 31, 2005. This increase was principally attributable to an expansion of our business operations to support our growth, including increased salaries and benefits of $2.8 million, travel expenses of $1.6 million, and professional fees of $0.6 million.

         Depreciation and amortization.    Depreciation and amortization for the year ended December 31, 2006 was $0.3 million, compared with $0.2 million for the year ended December 31, 2005. This increase was primarily attributable to an increase in capital expenditures related to anemometers to perform wind resource analysis at our development projects and corporate assets, such as vehicles, office equipment and furniture.

         Risk management activities related to non-operating projects.    Risk management activities related to non-operating projects for the year ended December 31, 2006 were a loss of $13.1 million, compared to a loss of $6.8 million for the year ended December 31, 2005. This increase was attributable to increasing oil prices, which resulted in mark-to-market losses on the Kaheawa Wind Power I oil hedge.

Other Expenses

         Other income.    Other income for the year ended December 31, 2006 was $0.3 million, compared with $0 for the year ended December 31, 2005. Other income consisted primarily of interest income earned on cash held in overnight sweep checking accounts and restricted cash money market accounts.

         Interest expense, net of capitalized interest.    Interest expense for the year ended December 31, 2006 was $3.0 million, compared with $2.8 million for the year ended December 31, 2005. This increase was principally attributable to interest expense on non-recourse debt related to Kaheawa Wind Power I and the project's commencing commercial operations in June 2006. This increase was offset by a greater utilization of borrowed funds to finance project development expenditures and general and administrative expenses in 2005 compared with 2006. We incurred gross interest expense of $14.3 million and $3.5 million for the years ended December 31, 2006 and 2005, respectively, and capitalized $11.3 million and $0.7 million related to the construction of our wind energy projects during the years ended December 31, 2006 and 2005, respectively.

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Minority interest in operations of subsidiaries

        Minority interest in operations of subsidiaries for the year ended December 31, 2006 was $0.2 million, compared with $0 for the year ended December 31, 2005. This increase was primarily attributable to the recognition of periodic changes of a minority member's equity in the subsidiary that owns our Kaheawa Wind Power I project.

Liquidity and Capital Resources

        Wind energy project development is a capital intensive process. The majority of the total cost of a wind energy project is attributable to turbine purchases. Generally, turbine suppliers require up-front payments upon execution of a turbine supply agreement and significant progress payments well in advance of turbine delivery. Our turbine purchases have been and will continue to be our principal capital expenditure. During 2006 and 2007, we entered into purchase contracts for turbines with an aggregate cost of $298.0 million and $1.5 billion, respectively. We also incur material expenses for land acquisition, feasibility studies, construction and other development costs.

        As of June 30, 2008, we had accumulated losses since inception of $185.5 million, $701.0 million of long-term indebtedness (including current maturities) and $1.2 billion of contractual obligations (primarily related to turbine purchases and exclusive of debt obligations). These losses and obligations are largely attributable to our turbine purchases and ongoing development activities. As of such date and as a result of our development activities, we had total assets of $1,031.1 million. We expect to continue to incur significant capital expenditures and significant losses for the foreseeable future as we develop and construct new wind energy projects, purchase additional turbines, hire additional employees, expand our operations and incur additional costs of operating as a public company.

        We have a successful track record of obtaining the capital necessary to execute our development plan through a combination of debt, tax equity financing and cash equity, all of which are described in "—Factors Affecting Our Results of Operations—Overview of financing." As of June 30, 2008, we had received $274.1 million in cash equity capital contributions, which includes $21.7 million of loans from members converted to equity on May 3, 2008, and $146.3 million in proceeds from tax equity financing transactions and had $701.0 million of long-term indebtedness (including current maturities and of which $350.0 million is guaranteed by certain of our existing investors). In connection with this offering, we expect that the guarantees provided by our existing investors will be released through the repayment and/or refinancing of the related indebtedness.

        We expect our development plan will require approximately $2.0 billion in total capital resources for the remaining six months of 2008 and 2009, consisting of:

    approximately $600 million to fund turbine purchase obligations;

    approximately $700 million to fund construction costs, development expenditures and working capital requirements; and

    approximately $700 million to repay or refinance indebtedness maturing during this period.

We expect to meet these capital requirements from the following sources:

    approximately $700 million from the extension of the maturity or refinancing of existing indebtedness;

    approximately $            million from borrowings under new or existing debt facilities;

    approximately $            million from new or existing tax equity financing transactions; and

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    approximately $           million of additional equity, consisting of $23.6 million of capital contributions received from our existing investors subsequent to June 30, 2008 and $           million from the net proceeds of this offering.

        The forward-looking information presented above with respect to the estimated sources and uses of capital for our development plan through 2009 is based on numerous estimates and assumptions made by our management. While we believe that these estimates and assumptions are reasonable in light of management's current beliefs concerning future events, because our new financing sources are not currently committed, such estimates and assumptions are inherently uncertain and are subject to significant business, economic, regulatory and competitive risks and uncertainties that could cause actual sources and uses of capital resources to differ materially from the amounts set forth above. See "Cautionary Statement Regarding Forward-Looking Statements."

        Assuming we are able to successfully execute our debt and tax equity financing plan as described above, we believe that the capital contributions received to date from our existing investors, together with the net proceeds of this offering, should provide sufficient equity capital to support our current development plan through 2009. While we expect that we will be able to enter into new debt and new tax equity financings as described above, there can be no assurance that such financings will be available or, that if such financings are available, that they will be available on terms acceptable to us. Our future capital raising efforts are subject to a number of risks and uncertainties described in this prospectus, including in "Risk Factors." Moreover, additional funds may be necessary sooner than we currently anticipate in the event of changes to our development schedule, increases in development costs, unanticipated prepayments to suppliers or to meet other unanticipated expenses. In addition, we may choose to modify our development plan in order to capture additional opportunities that become available to us. If and to the extent we are unable to refinance or extend the maturity of our existing indebtedness, procure additional indebtedness or close additional tax equity financings or if our development otherwise changes materially, we may be required to raise additional capital through public or private issuances of equity or convertible securities. If we are unable to raise additional capital, we may be required to delay development and construction of our wind energy projects, reduce the scope of our projects, or abandon or sell some or all of our development projects, all of which would adversely affect our business, financial condition and results of operations.

        In their report dated July 29, 2008, our independent registered public accounting firm stated that our consolidated financial statements have been prepared assuming we would continue as a going concern; however, our recurring losses from operations, negative operating cash flows, accumulated deficit and need to obtain adequate funding to procure turbines and fund capital expenditures raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Uses of Funds

        Our requirement for liquidity and capital resources, other than for general corporate and administrative expenses and working capital needs, can generally be categorized as follows:

    wind turbine purchases;

    other capital expenditures;

    debt service requirements; and

    wind energy project operating expenses.

         Wind Turbine Purchases.    Because turbine demand has exceeded overall market supply in recent years, we secure our supply of turbines well in advance of construction by pre-ordering turbines to match a planned level of construction across our portfolio. We have entered into purchase contracts

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with GE Energy and Clipper Windpower for turbines with an aggregate generating capacity in excess of 1,300 MW, which are scheduled to be delivered or commissioned between 2008 and 2013. We expect this supply to be sufficient to meet all of our anticipated turbine needs in 2008 and 2009 and approximately 80% of our anticipated needs in 2010. We are currently in advanced negotiations with GE Energy and Clipper Windpower to secure our turbine needs for 2010 and part of 2011, and we intend to negotiate with GE Energy, Clipper Windpower and other turbine suppliers to secure our additional turbine needs. See "Risk Factors—Risks Related to Our Business and the Wind Energy Business" and "Business—Turbine procurement and allocation."

        Generally, turbine suppliers require up-front payments upon execution of a turbine supply agreement and significant progress payments well in advance of turbine delivery. We finance our turbine supply agreements through a combination of turbine supply loans and equity capital. As of June 30, 2008, we had approximately $444.5 million in turbine supply loans outstanding, and the balance of our existing turbine commitments was approximately $1.2 billion. We expect to continue to incur turbine indebtedness in the future as we grow.

         Other Capital Expenditures.    Our capital expenditures principally relate to investments in property and equipment relating to the development of our wind energy projects. Currently, we anticipate making capital expenditures in the aggregate of approximately $1.4 billion for the remainder of 2008 and 2009. Our capital expenditure estimates are based on our current plans to develop and construct our portfolio of projects. These estimates are subject to change depending upon a number of factors, including, among other things, our ability to convert our pipeline of projects under construction and development into operating projects.

         Debt Service Requirements.    As of June 30, 2008, we had total indebtedness outstanding of $701.0 million, approximately $679.4 million of which requires repayment prior to June 30, 2009. See "—Capital Resources—Debt".

         Derivative Instruments and Hedging.    We often are required to post cash collateral and issue letters of credit for our obligations under our hedging arrangements, which reduce the available borrowing capacity under the credit agreements under which these letters or credit are issued. We have been and may in the future be required to post additional cash collateral or issue additional letters of credit if electricity and oil prices continue to rise. For example, because of rising electricity prices, our letters of credit covering our obligations under our electricity swaps for Cohocton I and Prattsburgh I increased from $7.5 million on December 31, 2007 to $42.9 million on June 30, 2008.

        At June 30, 2008 we had $17.7 million of restricted cash, of which $17.2 million represented cash collateral on certain derivative contracts. Subsequent to June 30, 2008, the full amount of this cash collateral was released to us as a result of declining oil prices.

         Wind Energy Project Operating Expenses.    As of June 30, 2008, we have three operational wind energy projects that generate sufficient cash flows to self-fund their operations. Since we generally seek to enter into tax equity financing transactions that entitle the tax equity investors to substantially all of the project's cash distributions from electricity sales and related hedging activities up to the "flip date", we do not anticipate cash flows from operating projects to be a significant source of financing for the near future.

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         Contractual Obligations.    As of December 31, 2007, we had the following contractual obligations:

 
  Payments due by Period  
 
  Remaining
Total
  Less than
1 year
  2-3 years   4-5 years   Thereafter  
 
  (in thousands)
 

Purchase obligations(1)

  $ 1,471,595   $ 514,641   $ 517,252   $ 331,587   $ 108,115  

Debt(2)

    465,449     222,028     227,691     3,397     12,333  

Estimated interest payments on long-term debt obligations(3)

    55,105     15,534     4,056     4,402     31,113  

Operating leases

    12,312     1,006     1,996     1,955     7,355  
                       

Total(4)

  $ 2,004,461   $ 753,209   $ 750,995   $ 341,341   $ 158,916  
                       

(1)
Purchase obligations consist principally of turbine purchase commitments, including warranty and operations and maintenance agreements and construction contract commitments.
(2)
Subsequent to December 31, 2007, we amended the terms of our indebtedness to extend the maturity of $219.6 million of such amounts to April 2009. For more information regarding our debt as of December 31, 2007, see "Description of Principal Indebtedness" and Note 6 to our audited consolidated financial statements.
(3)
Estimated interest payments assume no additional borrowings or repayments subsequent to December 31, 2007. Interest rates are based on one and three-month LIBOR and assume a compounding period and a forward rate curve that is consistent with the LIBOR rate applicable to each debt facility. Maturity dates include those in effect as of December 31, 2007, and do not include any amendments executed subsequent to December 31, 2007.
(4)
Distributions to our tax equity investors under our tax equity financing arrangements and to holders of Series B Units pursuant to our tax receivable agreement are unquantifiable future commitments and are, therefore, excluded from our contractual obligations. For additional information, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Results of Operations" and "The Reorganization and Our Holding Company Structure—Tax Receivable Agreement."

Sources of Funds

        The principal sources of liquidity for our future operating and capital expenditures are expected to be derived from existing and new debt financings, existing and new capital contributions, existing cash and cash flow from operations.

Capital Resources

        Our wind energy projects are financed with a combination of debt, tax equity financing and cash equity, all of which are described under "—Factors Affecting Our Results of Operations—Overview of financing" above.

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         Debt.    The following table summarizes our outstanding debt as of June 30, 2008 (unaudited):

Debt facilities:
  Maximum
Facility(1)
  Total
Outstanding
  Current
Maturity
  Remaining
Facility
Amount(1)
  Outstanding
Member
Guarantees(2)
  Interest
Rate
at
June 30,
2008
  Final
Maturity(1)
 
 
  (in thousands)
   
   
 

Turbine supply loans:

                                           
 

First Wind Acquisition, LLC

  $ 267,200   $ 267,200   $ 267,200   $   $ 20,000     4.85 %   2009  
 

First Wind Acquisition III, LLC

    95,500     95,500     95,500             5.85     2009  
 

First Wind Acquisition IV, LLC

    83,000     81,762     81,762             5.35     2008  

Revolver loans:

                                           
 

First Wind Acquisition, LLC

    60,000             60,000             2009  
 

First Wind Holdings, LLC

    270,000     223,119     223,119     46,881     223,119     3.60     2008  

Term loans:

                                           
 

First Wind Acquisition, LLC

    7,200     7,200     7,200             4.85     2009  
 

Maine Wind Partners, LLC

    24,750     19,852     3,808             4.27 - 6.27     2022  

Construction equipment financing

    6,531     6,112     698             8.00     2013  

Vehicle loans

    N/A     286     74             1.90 - 11.59     2008 - 2013  
                                     

Total

        $ 701,031   $ 679,361   $ 106,881   $ 243,119              
                                     

(1)
Reflects amendments to certain of such facilities executed subsequent to June 30, 2008.
(2)
As of June 30, 2008, certain of our current investors had provided guarantees of up to $350.0 million in support of our indebtedness to our lenders. Those guarantees are comprised as follows: (i) up to $270.0 million under the First Wind Holdings Loan, (ii) $20.0 million under one of our turbine supply loans and (iii) up to $60.0 million under our letter of credit facility. As of June 30, 2008, the outstanding amount of obligations guaranteed by these investors was $223.1 million under one of our revolving credit facilities and $20.0 million under one of our turbine supply loans.

        Borrowings under each of our turbine supply and construction loans are typically secured by a lien on the assets of the wind energy project to which the loans relate, including the development assets, turbine deposits, turbine contracts and construction contracts of the project, and, in the case of our First Wind Holdings, LLC loan facility, by a pledge of the units and guarantees of certain members of First Wind Holdings, LLC. Borrowings under our term loans are typically secured by a pledge of membership interests of our project subsidiaries. Our loan agreements generally contain covenants, including, among others, limitations on the use of proceeds and restrictions on indebtedness, liens, asset sales, dividends and distributions, investments, transactions with affiliates, transfers of ownership interests and certain changes in business. These covenants limit our subsidiaries' ability to pay dividends or make loans or advances to us. We were in compliance with the covenants in each of our loan agreements as of June 30, 2008. For more information on our principal loan agreements, see "Description of Principal Indebtedness" and Note 6 to our consolidated financial statements included in this prospectus.

        All of our third-party debt to date has been arranged by one lender, HSH Nordbank AG, New York Branch ("HSH"). On May 19, 2008, we amended the First Wind Holdings, LLC revolver loan to increase it to $270.0 million. As of June 30, 2008 $223.1 million was outstanding under this revolver loan. In April 2008, we closed an $83.0 million Clipper Windpower turbine supply loan. This facility matures in October 2008, and extends to 2010 with capacity increasing to $177.0 million upon syndication. As of June 30, 2008 there was $81.8 million outstanding under this facility. In April 2008, we amended the First Wind Acquisition, LLC facility to extend the maturity of the total $334.4 million facility, comprised of turbine supply, revolver and term loans, to April 15, 2009. We are currently

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negotiating with HSH for the extension of the First Wind Holdings, LLC revolver loan of $223.1 million that matures during 2008. We are also negotiating with HSH and other lenders for additional financing to fund the acquisition of turbines and development and construction of our projects.

         Tax Equity Financing.    During the year ended December 31, 2007, we completed two tax equity financing transactions, receiving approximately $146.3 million in aggregate up-front payments in exchange for equity interests in our subsidiaries that own our Kaheawa Wind Power I and Mars Hill projects. These equity interests entitle our tax equity investors to substantially all of the cash distributions generated from electricity sales and related hedging arrangements, PTCs and taxable income or loss generated by our Kaheawa Wind Power I and Mars Hill projects until the investors achieve their targeted investment return. In January 2008, we executed an agreement for an additional $208.0 million tax equity financing related to a portfolio of our New York projects (Steel Winds I, Cohocton I and Prattsburgh I). Funding of this tax equity financing will occur in tranches upon commencement of commercial operations of each applicable project and the satisfaction of certain other conditions precedent, including commencement of commercial operations of each applicable project by the end of 2009. In August 2008, $19.7 million was funded with respect to our Steel Winds I project. Our counterparty in this tax equity financing is an indirect subsidiary of Lehman Brothers Holdings, Inc., which filed for bankruptcy on September 15, 2008. We are uncertain what impact the bankruptcy will have on the funding of the balance of this financing. We are currently in discussions with other tax equity investors to fund the balance of this financing if and to the extent our counterparty is unable to fund its remaining commitment when due, but such financing may not be available. In connection with our completed tax equity financing transactions, we have guaranteed our project subsidiaries' indemnity obligations for breaches of representations and warranties made by those project companies in the applicable financing agreements.

         Equity Capital and Member Guarantees.    As of June 30, 2008, the members of First Wind Holdings, LLC have made cash contributions of $274.1 million, which includes $21.7 million of member loans, and certain of our members have provided $350.0 million of guarantees. In addition, certain members of First Wind Holdings, LLC provided additional capital commitments of $141.0 million, of which $87.4 million has been funded through June 30, 2008, and provided additional guarantees to lenders of $50.0 million. Subsequent to June 30, 2008, certain members of First Wind Holdings, LLC made capital contributions of $23.6 million.

Cash Flow

        The following table summarizes our sources and uses of funds for the periods discussed:

 
  Year ended December 31,   Six months ended
June 30,
 
 
  2005   2006   2007   2007   2008  
 
   
   
   
  (unaudited)
 
 
  (in thousands)
 

Cash flows used in operations

  $ (3,195 ) $ (31,799 ) $ (26,370 ) $ (12,134 ) $ (16,106 )

Cash flows used in investing activities

    (25,286 )   (311,281 )   (334,007 )   (107,222 )   (284,782 )

Cash flows provided by financing activities

    30,244     346,500     358,107     119,371     307,710  

Net increase (decrease) in cash and cash equivalents

    1,763     3,420     (2,270 )   15     6,822  

Six Months Ended June 30, 2007 and 2008

         Operating Activities.    Net cash used in operating activities during the six months ended June 30, 2008 was $16.1 million, compared with $12.1 million during the six months ended June 30, 2007. The net loss adjusted for all non-cash income and expenses was $21.1 million in the six months ended June 30, 2008, compared to $18.4 million in the six months ended June 30, 2007. In the six months

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ended June 30, 2008, increases in accounts payable and accrued expenses provided $10.6 million partially offset by increases in prepaid expenses and other assets, which used $6.8 million.

         Investing Activities.    Net cash used in investing activities during the six months ended June 30, 2008 was $284.8 million, compared with $107.2 million during the six months ended June 30, 2007. This increase was the result of higher capital expenditures and deposits for turbines in the first quarter of 2008 compared to the same period in 2007. The increase in capital expenditures for the six months ended June 30, 2008 was principally attributable to construction expenditures related to Cohocton I and Stetson I. In addition, we used $17.0 million during the six months ended June 30, 2008 for cash collateral on certain derivative contracts, compared to $0.8 million during the six months ended June 30, 2007.

         Financing Activities.    Net cash provided by financing activities during the six months ended June 30, 2008 was $307.7 million, compared with $119.4 million during the six months ended June 30, 2007. This increase was principally attributable to a $173.1 million increase in proceeds from debt, net of repayments, offset by $11.6 million of distributions to members. Proceeds from capital contributions of $87.4 million during the six months ended June 30, 2008 increased $74.1 million, compared to $13.3 million during the same period in 2007. Proceeds from the sale of subsidiary company interests in the amount of $43.6 million were received in March of 2007.

Years Ended December 31, 2006 and 2007

         Operating Activities.    Net cash used in operating activities during the year ended December 31, 2007 was $26.4 million, compared with $31.8 million during the year ended December 31, 2006. The net loss adjusted for all non-cash income and expense was $28.3 million in 2007 compared to $19.3 million in 2006. From 2006 to 2007, increases in accounts payable and accrued expenses provided $6.2 million partially offset by increases in accounts receivable and other assets that used $4.3 million.

         Investing Activities.    Net cash used in investing activities during the year ended December 31, 2007 was $334.0 million, compared with $311.3 million during the December 31, 2006. This increase was principally due to an increase of $34.8 million in capital expenditures, including turbines deposits and land acquisition, net of a $12.0 million decrease in restricted cash.

         Financing Activities.    Net cash provided by financing activities during the year ended December 31, 2007 was $358.1 million, compared with $346.5 million during the year ended December 31, 2006. This increase was principally attributable to $146.3 million of proceeds from the sale of subsidiary company interests and an increase in proceeds from loans from related parties of $18.6 million. These increases were offset by a $143.3 million decrease in proceeds from capital contributions and a $15.1 decrease in proceeds from the issuance of debt, net of repayments. During 2006, we repurchased $32.2 million of limited liability company units in First Wind Holdings, LLC. During 2007, we paid $2.3 million for transaction costs related to the sale of subsidiary company interests and we paid $4.8 million in financing costs, which was $1.1 million more than in 2006. Also during 2007, we made distributions of $23.7 million to minority members of subsidiaries. See "Certain Relationships and Related Party Transactions."

Years Ended December 31, 2005 and 2006

         Operating Activities.    Net cash used in operating activities during the year ended December 31, 2006 was $31.8 million, compared with $3.2 million during the year ended December 31, 2005. The net loss adjusted for all non-cash income and expense was $19.3 million in 2006 compared to $9.3 million in 2005. From 2005 to 2006, increases in accounts receivable and other assets used approximately $3.4 million that was partially offset by an increase in accounts payable and accrued expenses of about

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$2.6 million. In 2006, we used $11.6 million of cash to pay a liability due to a related party. Please see "—Off Balance Sheet Arrangements."

         Investing Activities.    Net cash used in investing activities during the year ended December 31, 2006 was $311.3 million, compared with $25.3 million during the year ended December 31, 2005. This increase was principally due to an increase in capital expenditures of $109.2 million, an increase in turbine deposits of $170.8 million, and a $6.1 million increase in restricted cash.

         Financing Activities.    Net cash provided by financing activities during the year ended December 31, 2006 was $346.5 million, compared with $30.2 million during the year ended December 31, 2005. This increase was principally attributable to an increase in net borrowings of $187.5 million, an increase in proceeds from capital contributions of $156.1 million and a repayment of an advance of $3.1 million from a related party. This increase was offset by a repurchase of company units of $32.2 million and a $1.4 million increase in deferred financing costs in 2006 compared to 2005.

Off Balance Sheet Arrangements

         Letters of Credit.    Our customers, vendors and regulatory agencies often require us to post letters of credit in order to guarantee performance under relevant contracts and agreements. We are also required to post letters of credit to secure our obligations under various swap agreements and leases and may, from time to time, decide to post letters of credit in lieu of cash deposits in reserve accounts under certain financing arrangements. The amount that can be drawn under some of these letters of credit may be increased from time to time subject to the satisfaction of certain conditions.

        The following table summarizes the total amount of letters of credit we have issued to customers, vendors, regulatory agencies and lessors as of December 31, 2007:

Commodity swap agreements

  $ 15,340  

Construction contracts

    7,822