- Increases dividend to $0.422 per Class A common
share for Q4 2017 -
SAN FRANCISCO, Nov. 9, 2017 /CNW/ -- Pattern Energy Group Inc.
(the "Company" or "Pattern Energy") (NASDAQ & TSX: PEGI) today
announced its financial results for the 2017 third quarter.
Highlights
(Figures reported below are for the third quarter of fiscal
2017, unless otherwise noted)
- Proportional gigawatt hours ("GWh") sold of 1,514 GWh
- Net cash provided by operating activities of $2.1 million
- Cash available for distribution ("CAFD") of $9.5 million, and on track to meet the narrowed
full year guidance(1)
- Net loss of $48.4 million
- Adjusted EBITDA of $54.7
million
- Revenue of $92.0 million
- Declared a fourth quarter dividend of $0.422 per Class A common share or $1.69 on an annualized basis, subsequent to the
end of the period, representing a 0.5% increase over the previous
quarter's dividend
- Completed the acquisition of a 51% interest in the 179 MW
Meikle Wind facility from Pattern Energy Group
LP ("Pattern Development 1.0")(2) for a
total investment of approximately $68
million
- Announced the addition of the 100 megawatt ("MW") Ishikari wind
project in Japan to the Company's
identified ROFO ("right of first offer") list, and as such the
identified ROFO list now totals 1,150 MW of potential owned
capacity
- Completed an equity offering of approximately $215 million
in gross proceeds, subsequent to the end of the period
"The strategic transactions we announced earlier this year
together with the new capital we raised last month represent the
beginning of the next phase of our growth strategy," said
Mike Garland, President and CEO of
Pattern Energy. "With the steps we have taken this year, the
business is significantly stronger today. We have a clear
opportunity to capitalize on the assets from the identified ROFO
list and our investment in Pattern Development 2.0. The expansion
of the identified ROFO list demonstrates the progress we are making
toward achieving our goal of 5 gigawatts ("GW") by 2020."
(1)
|
The forward
looking measure of 2017 full year cash available for distribution
(CAFD) is a non-GAAP measure that cannot be reconciled to net cash
provided by operating activities as the most directly comparable
GAAP financial measure without unreasonable effort primarily
because of the uncertainties involved in estimating forward-looking
changes in working capital balances which are added to earnings to
arrive at cash provided by operations and subtracted therefrom to
arrive at CAFD. A description of the adjustments to determine CAFD
can be found within Item 2, Management's Discussion and Analysis of
Financial Condition and Results of Operations - Key Metrics, of
Pattern Energy's 2017 Quarterly Report on Form 10-Q for the period
ended September 30, 2017.
|
(2)
|
In December
2016, Pattern Energy Group LP ("Pattern
Development 1.0") formed Pattern Energy Group 2 LP
("Pattern Development 2.0"), and together such companies are
referred to as "Pattern Development".
|
Financial and Operating Results
Pattern Energy sold 1,513,997 megawatt hours ("MWh") of
electricity on a proportional basis in the third quarter of 2017
compared to 1,472,300 MWh sold in the same period last year.
Pattern Energy sold 5,663,782 MWh of electricity on a proportional
basis for the nine months ended September 30, 2017 (YTD 2017)
compared to 4,988,621 MWh sold in the same period last year. The 3%
increase in the quarterly period was primarily attributable to the
acquisition of new projects, specifically Armow in the fourth
quarter of 2016, Broadview in the
second quarter 2017 and Meikle in the third quarter of 2017, offset
by unfavorable wind conditions as previously announced in the press
release dated September 29, 2017.
Production for the quarter was 15% below the long-term average
forecast for the period.
Net cash provided by operating activities was $2.1 million for the third quarter of 2017
compared to $37.4 million for the
same period last year. Net cash provided by operating activities
was $159.3 million for YTD 2017
compared to $107.4 million for
the same period last year. The change in the quarterly period was
primarily due to increases of $21.6
million in cash payments for accounts payable and accrued
liabilities due to timing of payments, $13.8
million in interest payments due to the issuance of the
Unsecured Senior Notes in January
2017 and debt associated with the acquisitions in 2017,
$7.3 million in transmission costs
and $2.7 million in project expenses,
as well as a decrease of $4.7 million
in cash receipts due to timing of collections from trade
receivables. These changes to net cash from operating activities
were partially offset by a $11.4
million increase in distributions from unconsolidated
investments and by a $2.6 million
increase in revenues (excluding unrealized loss on energy
derivative and amortization of PPAs).
Cash available for distribution was $9.5
million for the third quarter of 2017, which is above the
midpoint of the guidance provided in the Company's press release
dated September 29, 2017, compared to
$20.2 million for the same period
last year. Cash available for distribution was $103.8 million for YTD 2017 compared to
$96.7 million for the same period in
the prior year. The $10.7 million
change in the quarterly period was primarily due to increases of
$7.3 million in interest expense from
the issuance of the Unsecured Senior Notes in January 2017 and debt associated with the
acquisitions in 2017, $7.3 million in
transmission costs, $2.7 million in
project expenses and $1.0 million in
distributions to noncontrolling interests. The change was partially
offset by increases of $5.9 million
in total distributions from unconsolidated investments,
$2.6 million in revenues (excluding
unrealized loss on energy derivative and amortization of PPAs),
$0.3 million network upgrade
reimbursement related to Broadview, as well as a decrease of
$0.5 million in operating
expense.
Net loss was $48.4 million in the
third quarter of 2017, compared to $11.1
million for the same period last year. Net loss was
$60.5 million for YTD 2017 compared
to $55.7 million in the same period
last year. The change in the quarterly period was primarily
attributable to increases of $18.7
million in cost of revenues due to the acquisitions in 2017
and $24.4 million in other expense
related to a decrease in earnings in unconsolidated investments,
net of increases to interest expense, loss on undesignated
derivatives and realized loss on designated derivatives. The impact
of these items was partially offset by an increase in tax benefit
of $5.2 million.
Adjusted EBITDA was $54.7 million
for the third quarter of 2017 compared to $62.3 million for the same period last year.
Adjusted EBITDA was $244.8 million
for YTD 2017 compared to $219.0
million for the same period last year. The $7.6 million change in the quarterly period was
primarily due to increases of $7.3
million in transmission costs and $2.7 million in project expense, and a decrease
of $0.7 million in the proportionate
share of Adjusted EBITDA from unconsolidated investments. These
changes were partially offset by a $2.6
million increase in revenues (excluding unrealized loss on
energy derivative and amortization of PPAs) and a $0.5 million decrease in operating expense.
Fourth Quarter Wind Conditions
Based on conditions to date in the fourth quarter of 2017, wind
levels for the fourth quarter are in line with the long-term
average forecast, which represents a substantial improvement from
the wind levels in the first two months of the third quarter.
2017 Financial Guidance
Pattern Energy is narrowing its targeted annual cash available
for distribution for 2017 to a range of $145
million to $160 million. The new range maintains the
midpoint of the original range and that midpoint represents an
increase of 15% compared to cash available for distribution in
2016. The range assumes long-term average proportionate production
of the fleet for the remainder of 2017 and takes into account a
potential adverse impact of any extended electric grid outage
in Puerto Rico during the fourth quarter of 2017. As
noted above, forward-looking cash available for distribution is a
non-GAAP measure that cannot be reconciled to net cash provided by
operating activities as the most directly comparable GAAP financial
measure without unreasonable effort for the reasons stated
above.
Quarterly Dividend
Pattern Energy declared an increased dividend for the fourth
quarter 2017, payable on January 31,
2018, to holders of record on December 29, 2017 in the amount of $0.422 per Class A common share, which
represents $1.69 on an annualized
basis. This is a 0.5% increase from the third quarter 2017 dividend
of $0.42.
Operations Update
The completed evaluation of the 101 MW Santa Isabel project
in Puerto Rico reported no material damage to the turbines or
the project. While all of the turbines are operational, at present
Santa Isabel has not been reconnected to the high voltage grid and
the timing of when the project will be reconnected is not certain.
Pattern Energy is working with the Puerto Rico Electric Power
Authority ("PREPA"), the offtaker for the Santa Isabel project, to
support PREPA's broader efforts to restore the high voltage grid so
the project can help support providing much needed power to the
Puerto Rican communities.
Project Acquisition
During the third quarter, Pattern Energy acquired a 91 MW owned
interest in the 179 MW Meikle project, with PSP Investments
acquiring the remaining 88 MW interest. The Meikle project, located
in the Peace River Regional District of British Columbia, commenced commercial
operations in the first quarter of 2017 and operates under a
25-year power purchase agreement with BC Hydro, which has a
AAA/Aaa2 credit rating.
Pattern Energy acquired its 51% interest in Meikle for a total
investment of approximately $68
million(1), paid at closing, which represents a
CAFD multiple of 10x of the project's five-year average
CAFD(2).
Construction Pipeline
Pattern Energy has agreed to acquire a 51% interest in the 143
MW Mont Sainte-Marguerite project, located in the
Chaudière-Appalaches region south of Québec City. The project
is currently in the final stages of construction and commissioning
and is expected to commence commercial operations in late 2017. The
project will operate under a 25-year power purchase agreement with
Hydro-Québec, which has a AA-/Aa2 credit rating.
Pattern Energy will acquire its 51% interest in Mont
Sainte-Marguerite for a total investment of
approximately $40 million(3), which represents a
CAFD multiple of 10x of the five-year average CAFD(2).
The acquisition is expected to close during the first quarter of
2018, following the commencement of commercial operations and
subject to customary closing conditions. It will be funded at the
time of closing using available liquidity.
(1)
|
Based on a CAD to
USD exchange rate of $1.27
|
(2)
|
This forward
looking measure of five-year average annual purchase price multiple
of CAFD contribution from the Meikle and Mont Sainte-Marguerite
projects is a non-GAAP measure that cannot be reconciled to net
cash provided by operating activities as the most directly
comparable GAAP financial measure without unreasonable effort
primarily because of the uncertainties involved in estimating
forward-looking changes in working capital balances which are added
to earnings to arrive at cash provided by operations and subtracted
therefrom to arrive at CAFD. A description of the adjustments to
determine CAFD can be found within Item 2, Management's Discussion
and Analysis of Financial Condition and Results of Operations - Key
Metrics, of Pattern Energy's 2017 Quarterly Report on Form 10-Q for
the period ended September 30, 2017.
|
(3)
|
Based on a CAD to
USD exchange rate of $1.32
|
Acquisition Pipeline
Pattern Development's pipeline of development projects totals
more than 10 GW. Pattern Energy has a ROFO on a pipeline of
acquisition opportunities from Pattern Development. The identified
ROFO list stands at 1,150 MW of potential owned capacity and
represents a portion of the Pattern Development pipeline of
development projects, all of which are subject to Pattern Energy's
ROFO. Since its IPO, Pattern Energy has purchased, or agreed to
purchase, 1,358 MW from Pattern Development 1.0 and in aggregate
grown the identified ROFO list from 746 MW to more than 2 GW.
Below is a summary of the identified ROFO projects
that Pattern Energy expects to acquire from Pattern
Development in connection with Pattern
Energy's project purchase rights:
|
|
|
|
|
|
|
|
|
|
|
|
Capacity
(MW)
|
Identified
ROFO
Projects
|
|
Status
|
|
Location
|
|
Construction
Start
(1)
|
|
Commercial
Operations (2)
|
|
Contract
Type
|
|
Rated
(3)
|
|
Pattern
Development-
Owned
(4)
|
Pattern
Development 1.0 Projects
|
|
|
|
|
|
|
|
|
|
|
|
|
Otsuki
Wind
|
|
Operational
|
|
Japan
|
|
n/a
|
|
2006
|
|
PPA
|
|
12
|
|
12
|
Kanagi
Solar
|
|
Operational
|
|
Japan
|
|
2014
|
|
2016
|
|
PPA
|
|
10
|
|
10
|
Futtsu
Solar
|
|
Operational
|
|
Japan
|
|
2014
|
|
2016
|
|
PPA
|
|
31
|
|
31
|
Conejo
Solar(5)
|
|
Operational
|
|
Chile
|
|
2015
|
|
2016
|
|
PPA
|
|
104
|
|
104
|
El Cabo
|
|
In
construction
|
|
New Mexico
|
|
2016
|
|
2017
|
|
PPA
|
|
298
|
|
125
|
Belle
River
|
|
In
construction
|
|
Ontario
|
|
2016
|
|
2017
|
|
PPA
|
|
100
|
|
43
|
Ohorayama
|
|
In
construction
|
|
Japan
|
|
2016
|
|
2018
|
|
PPA
|
|
33
|
|
33
|
North Kent
|
|
In
construction
|
|
Ontario
|
|
2017
|
|
2018
|
|
PPA
|
|
100
|
|
35
|
Henvey
Inlet
|
|
Late stage
development
|
|
Ontario
|
|
2017
|
|
2019
|
|
PPA
|
|
300
|
|
150
|
Tsugaru
|
|
Late stage
development
|
|
Japan
|
|
2017
|
|
2020
|
|
PPA
|
|
122
|
|
122
|
Sumita
|
|
Late stage
development
|
|
Japan
|
|
2019
|
|
2021
|
|
PPA
|
|
100
|
|
62
|
Pattern
Development 2.0 Projects
|
|
|
|
|
|
|
|
|
|
|
|
|
Stillwater Big
Sky
|
|
Late stage
development
|
|
Montana
|
|
2017
|
|
2018
|
|
PPA
|
|
79
|
|
67
|
Crazy
Mountain
|
|
Late stage
development
|
|
Montana
|
|
2017
|
|
2019
|
|
PPA
|
|
80
|
|
68
|
Grady
|
|
Late stage
development
|
|
New Mexico
|
|
2018
|
|
2019
|
|
PPA
|
|
220
|
|
188
|
Ishikari
|
|
Late stage
development
|
|
Japan
|
|
2019
|
|
2022
|
|
PPA
|
|
100
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
1,689
|
|
1,150
|
|
|
(1)
|
Represents year of
actual or anticipated commencement of construction.
|
|
|
(2)
|
Represents year of
actual or anticipated commencement of commercial
operations.
|
|
|
(3)
|
Rated capacity
represents the maximum electricity generating capacity of a project
in MW. As a result of wind and other conditions, a project or a
turbine will not operate at its rated capacity at all times and the
amount of electricity generated will be less than its rated
capacity. The amount of electricity generated may vary based on a
variety of factors.
|
|
|
(4)
|
Pattern
Development-Owned capacity represents the maximum, or rated,
electricity generating capacity of the project in MW multiplied by
Pattern Development 1.0's or Pattern Development 2.0's percentage
ownership interest in the distributable cash flow of the
project.
|
|
|
(5)
|
From time to time,
the Company conducts strategic reviews of its markets. Pattern
Energy is conducting a strategic review of the market, growth, and
opportunities in Chile. In the event management believes the
Company can utilize funds that have already been invested in Chile
or funds that might otherwise be invested in Chile in a more
productive manner elsewhere that could generate a higher return on
investment, the Company may decide to exit Chile for other
opportunities with greater potential. In addition, Pattern
Development 1.0 is also concurrently exploring strategic
alternatives for its assets in Chile.
|
Cash Available for Distribution and Adjusted EBITDA Non-GAAP
Reconciliations
The following tables reconcile non-GAAP net cash provided by
operating activities to cash available for distribution and net
income (loss) to Adjusted EBITDA, respectively, for the periods
presented (in thousands):
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net cash provided by
operating activities(1)
|
$
|
2,147
|
|
|
$
|
37,395
|
|
|
$
|
159,330
|
|
|
$
|
107,371
|
|
Changes in operating
assets and liabilities
|
25,481
|
|
|
(4,513)
|
|
|
(22,475)
|
|
|
800
|
|
Network upgrade
reimbursement
|
346
|
|
|
—
|
|
|
8,936
|
|
|
—
|
|
Release of restricted
cash to fund project and general and administrative
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
590
|
|
Operations and
maintenance capital expenditures
|
(254)
|
|
|
(133)
|
|
|
(517)
|
|
|
(879)
|
|
Distributions from
unconsolidated investments
|
2,821
|
|
|
8,292
|
|
|
11,211
|
|
|
40,066
|
|
Other
|
598
|
|
|
(195)
|
|
|
1,974
|
|
|
(130)
|
|
Less:
|
|
|
|
|
|
|
|
Distributions to
noncontrolling interests
|
(4,537)
|
|
|
(3,584)
|
|
|
(13,701)
|
|
|
(11,771)
|
|
Principal payments
paid from operating cash flows
|
(17,140)
|
|
|
(17,060)
|
|
|
(40,911)
|
|
|
(39,322)
|
|
Cash available for
distribution
|
$
|
9,462
|
|
|
$
|
20,202
|
|
|
$
|
103,847
|
|
|
$
|
96,725
|
|
|
|
(1)
|
Included in net cash
provided by operating activities is the portion of distributions
from unconsolidated investments paid from cumulative earnings
representing the return on investment.
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net loss
|
$
|
(48,376)
|
|
|
$
|
(11,050)
|
|
|
$
|
(60,521)
|
|
|
$
|
(55,744)
|
|
Plus:
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
26,710
|
|
|
19,583
|
|
|
73,009
|
|
|
60,906
|
|
Tax (benefit)
provision
|
(3,839)
|
|
|
1,311
|
|
|
5,477
|
|
|
4,038
|
|
Depreciation,
amortization and accretion
|
56,650
|
|
|
45,755
|
|
|
156,629
|
|
|
136,974
|
|
EBITDA
|
31,145
|
|
|
55,599
|
|
|
174,594
|
|
|
146,174
|
|
Unrealized loss on
energy derivative (1)
|
3,113
|
|
|
818
|
|
|
10,134
|
|
|
14,970
|
|
Gain (loss) on
undesignated derivatives, net
|
4,081
|
|
|
(1,825)
|
|
|
9,480
|
|
|
17,685
|
|
Realized loss on
derivatives
|
2,207
|
|
|
—
|
|
|
2,207
|
|
|
—
|
|
Net loss on
transactions
|
466
|
|
|
314
|
|
|
1,585
|
|
|
353
|
|
Adjustments from
unconsolidated investments
|
—
|
|
|
(8,439)
|
|
|
—
|
|
|
(19,573)
|
|
Plus,
proportionate share from unconsolidated investments:
|
|
|
|
|
|
|
|
Interest expense, net
of interest income
|
10,270
|
|
|
7,634
|
|
|
29,108
|
|
|
22,778
|
|
Depreciation,
amortization and accretion
|
9,361
|
|
|
6,660
|
|
|
26,390
|
|
|
19,624
|
|
(Gain) loss on
undesignated derivatives, net
|
(5,908)
|
|
|
1,544
|
|
|
(8,696)
|
|
|
17,015
|
|
Adjusted
EBITDA
|
$
|
54,735
|
|
|
$
|
62,305
|
|
|
$
|
244,802
|
|
|
$
|
219,026
|
|
|
|
(1)
|
Amount is included in
electricity sales on the consolidated statements of
operations.
|
Conference Call and Webcast
Pattern Energy will host a conference call and webcast to
discuss these results at 10:30 a.m. Eastern
Time, today, November 9, 2017.
Mike Garland, President and CEO, and
Mike Lyon, CFO, will co-chair the
call. Participants should call (888) 231-8191 or
(647) 427-7450 and ask an operator for the Pattern Energy
earnings call. Please dial in 10 minutes prior to the call to
secure a line. A replay will be available shortly after the call.
To access the replay, please dial (855) 859-2056 or
(416) 849-0833 and enter access code 8787979. The replay
recording will be available until 11:59 p.m.
Eastern Time, November 30,
2017.
A live webcast of the conference call will be also available on
the events page in the investor section of Pattern Energy's website
at www.patternenergy.com. An archived webcast will be available for
one year.
About Pattern Energy
Pattern Energy Group Inc. (Pattern Energy) is an independent
power company listed on the NASDAQ Global Select Market and Toronto
Stock Exchange. Pattern Energy has a portfolio of 20 wind
power facilities, including one project it has agreed to acquire,
with a total owned interest of 2,736 MW in the United States, Canada and Chile that use proven, best-in-class
technology. Pattern Energy's wind power facilities generate stable
long-term cash flows in attractive markets and provide a solid
foundation for the continued growth of the business. For more
information, visit www.patternenergy.com.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements contained in this press release constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and "forward-looking
information" within the meaning of Canadian securities laws,
including statements regarding the ability to achieve the 2017 cash
available for distribution target; achieve the five year average
annual CAFD generated by Meikle and Mont Sainte-Marguerite; achieve
the next phase of its growth strategy; capitalize on the assets
from the iROFO list and investment in Pattern Development 2.0;
achieve its target of 5 GW by 2020; the outcome of wind conditions
in the fourth quarter; the timing for the Santa Isabel project to
be reconnected to the high voltage grid or for PREPA to restore the
high voltage grid in Puerto Rico;
the timing of the consummation of the acquisition of Mont
Sainte-Marguerite; and the ability of the Company to consummate
additional acquisitions from the iROFO list. These forward-looking
statements represent the Company's expectations or beliefs
concerning future events, and it is possible that the results
described in this press release will not be achieved. These
forward-looking statements are subject to risks, uncertainties and
other factors, many of which are outside of the Company's control,
which could cause actual results to differ materially from the
results discussed in the forward-looking statements.
Any forward-looking statement speaks only as of the date on
which it is made, and, except as required by law, the Company does
not undertake any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. New factors emerge from time to time,
and it is not possible for the Company to predict all such factors.
When considering these forward-looking statements, you should keep
in mind the risk factors and other cautionary statements in the
Company's annual report on Form 10-K and any quarterly reports on
Form 10-Q. The risk factors and other factors noted therein could
cause actual events or the Company's actual results to differ
materially from those contained in any forward-looking
statement.
Contacts:
Media
Relations
Matt
Dallas
917-363-1333
matt.dallas@patternenergy.com
|
|
Investor
Relations
Ross
Marshall
416-526-1563
ross.marshall@loderockadvisors.com
|
|
Pattern Energy
Group Inc.
Consolidated
Balance Sheets
(In thousands of
U.S. Dollars, except share data)
(Unaudited)
|
|
September 30,
|
|
December
31,
|
|
2017
|
|
2016
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
91,057
|
|
|
$
|
83,932
|
|
Restricted
cash
|
7,150
|
|
|
11,793
|
|
Funds deposited by
counterparty
|
33,530
|
|
|
43,635
|
|
Trade
receivables
|
48,960
|
|
|
37,510
|
|
Derivative assets,
current
|
18,824
|
|
|
17,578
|
|
Prepaid
expenses
|
18,405
|
|
|
13,803
|
|
Deferred financing
costs, current, net of accumulated amortization of $11,360 and
$9,350 as of September 30, 2017 and December 31, 2016,
respectively
|
2,514
|
|
|
2,456
|
|
Other current
assets
|
19,058
|
|
|
7,350
|
|
Total current
assets
|
239,498
|
|
|
218,057
|
|
Restricted
cash
|
19,866
|
|
|
13,646
|
|
Property, plant and
equipment, net
|
4,023,355
|
|
|
3,135,162
|
|
Unconsolidated
investments
|
303,833
|
|
|
233,294
|
|
Derivative
assets
|
14,865
|
|
|
26,712
|
|
Deferred financing
costs
|
4,339
|
|
|
4,052
|
|
Net deferred tax
assets
|
6,107
|
|
|
5,559
|
|
Finite-lived
intangible assets, net
|
138,516
|
|
|
91,895
|
|
Other
assets
|
22,649
|
|
|
24,390
|
|
Total
assets
|
$
|
4,773,028
|
|
|
$
|
3,752,767
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
other accrued liabilities
|
$
|
53,200
|
|
|
$
|
31,305
|
|
Accrued construction
costs
|
2,765
|
|
|
1,098
|
|
Counterparty deposit
liability
|
33,530
|
|
|
43,635
|
|
Accrued
interest
|
7,043
|
|
|
9,545
|
|
Dividends
payable
|
37,645
|
|
|
35,960
|
|
Derivative
liabilities, current
|
12,095
|
|
|
11,918
|
|
Revolving credit
facility
|
253,000
|
|
|
180,000
|
|
Current portion of
long-term debt, net
|
58,213
|
|
|
48,716
|
|
Other current
liabilities
|
13,133
|
|
|
4,698
|
|
Total current
liabilities
|
470,624
|
|
|
366,875
|
|
Long-term debt,
net
|
1,871,607
|
|
|
1,334,956
|
|
Derivative
liabilities
|
21,979
|
|
|
24,521
|
|
Net deferred tax
liabilities
|
50,573
|
|
|
31,759
|
|
Finite-lived
intangible liability, net
|
52,062
|
|
|
54,663
|
|
Contingent
liabilities
|
58,820
|
|
|
576
|
|
Other long-term
liabilities
|
98,519
|
|
|
60,673
|
|
Total
liabilities
|
2,624,184
|
|
|
1,874,023
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Class A common stock,
$0.01 par value per share: 500,000,000 shares authorized;
88,569,377 and 87,410,687 shares outstanding as of September 30,
2017 and December 31, 2016, respectively
|
886
|
|
|
875
|
|
Additional paid-in
capital
|
1,062,252
|
|
|
1,145,760
|
|
Accumulated
loss
|
(104,225)
|
|
|
(94,270)
|
|
Accumulated other
comprehensive loss
|
(24,821)
|
|
|
(62,367)
|
|
Treasury stock, at
cost; 115,146 and 110,964 shares of Class A common stock as of
September 30, 2017 and December 31, 2016, respectively
|
(2,597)
|
|
|
(2,500)
|
|
Total equity before
noncontrolling interest
|
931,495
|
|
|
987,498
|
|
Noncontrolling
interest
|
1,217,349
|
|
|
891,246
|
|
Total
equity
|
2,148,844
|
|
|
1,878,744
|
|
Total liabilities and
equity
|
$
|
4,773,028
|
|
|
$
|
3,752,767
|
|
Pattern Energy
Group Inc.
|
Consolidated
Statements of Operations
|
(In thousands of
U.S. dollars, except per share data)
|
(Unaudited)
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue:
|
|
|
|
|
|
|
|
Electricity
sales
|
$
|
89,807
|
|
|
$
|
89,919
|
|
|
$
|
293,977
|
|
|
$
|
266,952
|
|
Other
revenue
|
2,223
|
|
|
1,995
|
|
|
6,646
|
|
|
6,039
|
|
Total
revenue
|
92,030
|
|
|
91,914
|
|
|
300,623
|
|
|
272,991
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Project
expense
|
33,932
|
|
|
31,271
|
|
|
96,437
|
|
|
96,711
|
|
Transmission
costs
|
7,421
|
|
|
113
|
|
|
12,213
|
|
|
278
|
|
Depreciation and
accretion
|
52,379
|
|
|
43,693
|
|
|
144,637
|
|
|
130,782
|
|
Total cost of
revenue
|
93,732
|
|
|
75,077
|
|
|
253,287
|
|
|
227,771
|
|
Gross profit
(loss)
|
(1,702)
|
|
|
16,837
|
|
|
47,336
|
|
|
45,220
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
General and
administrative
|
9,068
|
|
|
9,598
|
|
|
31,969
|
|
|
27,425
|
|
Related party general
and administrative
|
3,587
|
|
|
3,553
|
|
|
10,589
|
|
|
7,381
|
|
Total operating
expenses
|
12,655
|
|
|
13,151
|
|
|
42,558
|
|
|
34,806
|
|
Operating income
(loss)
|
(14,357)
|
|
|
3,686
|
|
|
4,778
|
|
|
10,414
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(27,147)
|
|
|
(19,798)
|
|
|
(74,541)
|
|
|
(62,134)
|
|
Gain (loss) on
undesignated derivatives, net
|
(4,081)
|
|
|
1,825
|
|
|
(9,480)
|
|
|
(17,685)
|
|
Realized loss on
designated derivatives
|
(2,207)
|
|
|
—
|
|
|
(2,207)
|
|
|
—
|
|
Earnings (loss) in
unconsolidated investments, net
|
(3,964)
|
|
|
4,685
|
|
|
27,431
|
|
|
15,755
|
|
Net loss on
transactions
|
(466)
|
|
|
(314)
|
|
|
(1,585)
|
|
|
(353)
|
|
Other income,
net
|
7
|
|
|
177
|
|
|
560
|
|
|
2,297
|
|
Total other
expense
|
(37,858)
|
|
|
(13,425)
|
|
|
(59,822)
|
|
|
(62,120)
|
|
Net loss before
income tax
|
(52,215)
|
|
|
(9,739)
|
|
|
(55,044)
|
|
|
(51,706)
|
|
Tax (benefit)
provision
|
(3,839)
|
|
|
1,311
|
|
|
5,477
|
|
|
4,038
|
|
Net loss
|
(48,376)
|
|
|
(11,050)
|
|
|
(60,521)
|
|
|
(55,744)
|
|
Net loss attributable
to noncontrolling interest
|
(18,548)
|
|
|
(7,037)
|
|
|
(50,566)
|
|
|
(24,838)
|
|
Net loss attributable
to Pattern Energy
|
$
|
(29,828)
|
|
|
$
|
(4,013)
|
|
|
$
|
(9,955)
|
|
|
$
|
(30,906)
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding
|
|
|
|
|
|
|
|
Basic and
diluted
|
87,370,979
|
|
|
81,531,775
|
|
|
87,146,465
|
|
|
76,821,811
|
|
Loss per share
attributable to Pattern Energy
|
|
|
|
|
|
|
|
Class A common
stock:
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
(0.34)
|
|
|
$
|
(0.05)
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.40)
|
|
Dividends declared
per Class A common share
|
$
|
0.42
|
|
|
$
|
0.40
|
|
|
$
|
1.25
|
|
|
$
|
1.17
|
|
Pattern Energy
Group Inc.
Consolidated
Statements of Cash Flows
(In thousands of
U.S. dollars)
(Unaudited)
|
|
Nine months
ended
September 30,
|
|
2017
|
|
2016
|
Operating
activities
|
|
|
|
Net loss
|
$
|
(60,521)
|
|
|
$
|
(55,744)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
accretion
|
144,637
|
|
|
130,782
|
|
Amortization of
financing costs
|
5,879
|
|
|
5,242
|
|
Amortization of debt
discount/premium, net
|
3,379
|
|
|
3,147
|
|
Amortization of power
purchase agreements, net
|
2,435
|
|
|
2,278
|
|
Loss on derivatives,
net
|
15,662
|
|
|
29,757
|
|
Realized loss on
derivatives, net
|
2,207
|
|
|
—
|
|
Stock-based
compensation
|
4,085
|
|
|
4,362
|
|
Deferred
taxes
|
9,133
|
|
|
3,681
|
|
Intraperiod tax
allocation
|
(3,656)
|
|
|
—
|
|
Earnings in
unconsolidated investments, net
|
(27,431)
|
|
|
(15,755)
|
|
Distributions from
unconsolidated investments
|
43,093
|
|
|
377
|
|
Other reconciling
items
|
(2,047)
|
|
|
44
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Funds
deposited by counterparty
|
10,105
|
|
|
(46,643)
|
|
Trade
receivables
|
(2,861)
|
|
|
6,078
|
|
Prepaid
expenses
|
(3,187)
|
|
|
(1,005)
|
|
Other
current assets
|
(9,790)
|
|
|
(3,709)
|
|
Other
assets (non-current)
|
2,457
|
|
|
865
|
|
Accounts
payable and other accrued liabilities
|
16,389
|
|
|
(2,658)
|
|
Counterparty deposit liability
|
(10,105)
|
|
|
46,643
|
|
Accrued
interest
|
(3,884)
|
|
|
(6,017)
|
|
Other
current liabilities
|
8,040
|
|
|
811
|
|
Long-term liabilities
|
14,569
|
|
|
4,952
|
|
Contingent liabilities
|
742
|
|
|
(117)
|
|
Net cash provided by
operating activities
|
159,330
|
|
|
107,371
|
|
Investing
activities
|
|
|
|
Cash paid for
acquisitions, net of cash and restricted cash acquired
|
(289,329)
|
|
|
(4,024)
|
|
Capital
expenditures
|
(44,295)
|
|
|
(31,554)
|
|
Distributions from
unconsolidated investments
|
11,211
|
|
|
40,066
|
|
Other
assets
|
7,607
|
|
|
1,619
|
|
Other investing
activities
|
—
|
|
|
(136)
|
|
Net cash provided by
(used in) investing activities
|
(314,806)
|
|
|
5,971
|
|
Financing
activities
|
|
|
|
Proceeds from public
offering, net of issuance costs
|
$
|
22,431
|
|
|
$
|
286,583
|
|
Dividends
paid
|
(107,943)
|
|
|
(85,159)
|
|
Capital distributions
- noncontrolling interest
|
(13,701)
|
|
|
(11,771)
|
|
Payment for deferred
financing costs
|
(7,763)
|
|
|
(134)
|
|
Proceeds from
revolving credit facility
|
323,000
|
|
|
20,000
|
|
Repayment of
revolving credit facility
|
(250,000)
|
|
|
(340,000)
|
|
Proceeds from
debt
|
404,395
|
|
|
—
|
|
Repayment of
debt
|
(192,109)
|
|
|
(39,322)
|
|
Payment for interest
rate swaps
|
(14,372)
|
|
|
—
|
|
Other financing
activities
|
(3,712)
|
|
|
(634)
|
|
Net cash provided by
(used in) financing activities
|
160,226
|
|
|
(170,437)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
3,952
|
|
|
1,750
|
|
Net change in cash,
cash equivalents and restricted cash
|
8,702
|
|
|
(55,345)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
109,371
|
|
|
146,292
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
118,073
|
|
|
$
|
90,947
|
|
Supplemental
disclosures
|
|
|
|
Cash payments for
income taxes
|
$
|
335
|
|
|
$
|
233
|
|
Cash payments for
interest expense
|
$
|
70,100
|
|
|
$
|
59,172
|
|
Schedule of
non-cash activities
|
|
|
|
Change in property,
plant and equipment
|
$
|
619
|
|
|
$
|
6,132
|
|
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SOURCE Pattern Energy Group Inc.