SAN FRANCISCO, May 10, 2019 /PRNewswire/ -- Pattern Energy Group
Inc. (the "Company" or "Pattern Energy") (NASDAQ & TSX: PEGI)
today announced its financial results for the 2019 first
quarter.
Highlights
(Figures reported below are for the first quarter of fiscal
2019, unless otherwise noted)
- Proportional gigawatt hours ("GWh") sold of 2,116 GWh, down
1%
- Net loss of $46 million
- Cash available for distribution ("CAFD") of $53 million, up 23% and on track to meet full
year guidance(1)
- Adjusted EBITDA of $98 million,
down 6%
- Revenue of $135 million, up
21%
- Declared a second quarter dividend of $0.4220 per Class A common share or $1.688 on an annualized basis, subsequent to the
end of the period, unchanged from the previous quarter's
dividend
- Increased Pattern Energy's total capital invested in Pattern
Development to $190 million by
fulfilling capital calls since January 1,
2019
- Added 400 megawatts ("MW") of new wind projects to the
identified right of first offer ("ROFO") list, consisting of three
projects in New Mexico with
contracted sales to purchasers in the California market
"We continue to demonstrate a strong ability to manage the
business for the wind variability experienced. We are on track for
our 2019 full year guidance target with our effective capital
management and growth strategy, despite wind resource levels that
were below the long-term average in the Eastern United States," said Mike Garland, CEO of Pattern Energy. "We are
executing our strategy to grow our CAFD per share through 2020
without the requirement to issue new common equity. The actions we
are taking are meant to ensure that we can maintain our dividend,
drive down our payout ratio and fund the acquisition of identified
ROFO projects. We have expanded our identified ROFO list to 1.3 GW
with new projects in New Mexico
during the quarter. Our investment in Pattern Development remains
on track to deliver meaningful growth beyond 2019."
(1) The forward looking measure of 2019 full year cash
available for distribution (CAFD) is a non-GAAP measure that cannot
be reconciled to net income as the most directly comparable GAAP
financial measure without unreasonable effort primarily because of
the uncertainties involved in estimating forward-looking
mark-to-market changes in derivatives and proportionate share of
earnings from unconsolidated investments to arrive at net income
and which are 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 Performance Metrics,
of Pattern Energy's 2019 Quarterly Report on Form 10-Q
for the period ended March 31,
2019.
Financial and Operating Results
Pattern Energy sold 2,115,855 megawatt hours ("MWh") of
electricity on a proportional basis in the first quarter of 2019,
compared to 2,135,715 MWh sold in the same period last year. The 1%
decrease in the quarterly period was primarily due to volume
decreases as a result of divestitures in 2018 and unfavorable wind
conditions partially offset by volume increases due to acquisitions
in 2018 and less curtailment and congestion in the first quarter of
2019.
Net loss was $46 million in the
first quarter of 2019, compared to a net loss of $13 million for the same period last year. The
increase of $33 million in net loss
in the quarterly period was primarily attributable to a
$24 million increase in net loss at
the operating business segment, mainly due to losses at existing
projects, divestitures in 2018, derivative losses and a
$10 million increase in the share of
net loss at the development investment segment, which included
impairment expense and increased cost of development including
legal, professional and related party administrative expense.
Adjusted EBITDA decreased 6% to $98
million for the first quarter of 2019, compared to
$104 million for the same period last
year. The $6 million decrease in the
quarterly period was primarily due to decreases of $13 million due to divestitures in 2018 and
$10 million due to losses at our
development investment segment. These decreases in Adjusted EBITDA
were partially offset by increases of $16
million from new projects acquired in 2018 and $2 million from projects fully operational in
both periods.
Cash available for distribution increased 23% to $53 million for the first quarter of 2019,
compared to $43 million for the same
period last year. The $10 million
increase in the quarterly period was primarily due to increases of
$9 million from projects fully
operational in both periods and $7
million from new projects acquired in 2018, partially offset
by a decrease of $6 million due to
divestitures in 2018.
2019 Financial Guidance
Pattern Energy is re-confirming its targeted annual cash
available for distribution(1) for 2019 within a range of
$160 million to $190 million. For the full year
2020, Pattern Energy expects annual cash available for
distribution(1) in a range of $185 million to $225
million.
(1) The forward looking measures of 2019 and 2020 full year
cash available for distribution (CAFD) are non-GAAP measures that
cannot be reconciled to net income as the most directly comparable
GAAP financial measure without unreasonable effort primarily
because of the uncertainties involved in estimating forward-looking
mark-to-market changes in derivatives and proportionate share of
earnings from unconsolidated investments to arrive at net income
and which are 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 Performance Metrics, of Pattern
Energy's 2019 Quarterly Report on Form 10-Q for the period ended
March 31, 2019.
Quarterly Dividend
Pattern Energy declared a dividend for the second quarter 2019,
payable on July 31, 2019, to holders of record on
June 28, 2019 in the amount of $0.4220 per Class A common share, which
represents $1.688 on an annualized
basis. The amount of the second quarter 2019 dividend is unchanged
from the first quarter 2019 dividend.
Acquisition Pipeline
Pattern Development (formerly referred to as Pattern Energy
Group 2 LP or Pattern Development 2.0) and Pattern Energy Group LP
(formerly referred to as Pattern Development 1.0) have a pipeline
of development projects totaling more than 10 gigawatts ("GW").
Pattern Energy has a ROFO on the pipeline of acquisition
opportunities from these two companies. The identified ROFO list
stands at 1.3 GW of total capacity and represents a portion of the
pipeline of development projects, which are subject to Pattern
Energy's ROFO. Since its IPO, Pattern Energy has purchased, or
agreed to purchase, more than 1.6 GW from Pattern Energy Group LP
and Pattern Development and in aggregate grown the identified ROFO
list from 746 MW to more than 2 GW.
Pattern Energy has removed the 80 MW Crazy Mountain Wind
project, located in Sweet Grass County,
Montana, from its identified ROFO list due to the likelihood
that the project will not continue as a result of a court order
which has currently halted further development at the project.
Below is a summary of the identified ROFO projects
that Pattern Energy has the right to purchase from
Pattern Development and Pattern Energy Group LP in connection with
its respective purchase rights:
|
|
|
|
|
|
|
|
|
|
|
|
Capacity
(MW)
|
Identified
ROFO Projects
|
|
Status
|
|
Location
|
|
Construction
Start (1)
|
|
Commercial
Operations (2)
|
|
Contract
Type
|
|
Rated
(3)
|
|
Pattern
Development
Companies
Owned (4)
|
Pattern Energy
Group LP
|
|
|
|
|
|
|
|
|
|
|
|
|
Belle
River
|
|
Operational
|
|
Ontario
|
|
2016
|
|
2017
|
|
PPA
|
|
100
|
|
43
|
North Kent
|
|
Operational
|
|
Ontario
|
|
2017
|
|
2018
|
|
PPA
|
|
100
|
|
35
|
Henvey
Inlet
|
|
In
construction
|
|
Ontario
|
|
2017
|
|
2019
|
|
PPA
|
|
300
|
|
150
|
Pattern
Development
|
|
|
|
|
|
|
|
|
|
|
|
|
Grady
|
|
In
construction
|
|
New Mexico
|
|
2018
|
|
2019
|
|
PPA
|
|
220
|
|
188
|
Sumita
|
|
Late stage
development
|
|
Japan
|
|
2020
|
|
2022
|
|
PPA
|
|
100
|
|
55
|
Ishikari
|
|
Late stage
development
|
|
Japan
|
|
2020
|
|
2022
|
|
PPA
|
|
112
|
|
112
|
Corona Wind
Project(s)
|
|
Late stage
development
|
|
New Mexico
|
|
2020
|
|
2021
|
|
PPA
|
|
400
|
|
340
|
|
|
|
|
|
|
|
|
|
|
|
|
1,332
|
|
923
|
|
|
(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 weather and other conditions, a project will
not operate at its rated capacity at all times and the amount of
electricity generated may be less than its rated capacity. The
amount of electricity generated may vary based on a variety of
factors.
|
|
|
(4)
|
Pattern Development
Companies-Owned capacity represents the maximum, or rated,
electricity generating capacity of the project in MW multiplied by
Pattern Energy Group LP's or Pattern Development's percentage
ownership interest in the distributable cash flow of the
project.
|
Pattern Energy
Group Inc.
Consolidated
Statements of Operations
(In millions of
U.S. dollars, except share data)
(Unaudited)
|
|
Three months ended
March 31,
|
|
2019
|
|
2018
|
Revenue:
|
|
|
|
Electricity
sales
|
$
|
123
|
|
|
$
|
102
|
|
Other
revenue
|
12
|
|
|
10
|
|
Total
revenue
|
135
|
|
|
112
|
|
Cost of
revenue:
|
|
|
|
Project
expense
|
40
|
|
|
35
|
|
Transmission
costs
|
6
|
|
|
7
|
|
Depreciation,
amortization and accretion
|
83
|
|
|
55
|
|
Total cost of
revenue
|
129
|
|
|
97
|
|
Gross
profit
|
6
|
|
|
15
|
|
Operating
expenses:
|
|
|
|
General and
administrative
|
11
|
|
|
11
|
|
Related party general
and administrative
|
4
|
|
|
4
|
|
Total operating
expenses
|
15
|
|
|
15
|
|
Operating income
(loss)
|
(9)
|
|
|
—
|
|
Other income
(expense):
|
|
|
|
Interest
expense
|
(26)
|
|
|
(25)
|
|
Gain on
derivatives
|
1
|
|
|
6
|
|
Earnings (loss) in
unconsolidated investments, net
|
(6)
|
|
|
18
|
|
Net loss on
transactions
|
—
|
|
|
(1)
|
|
Other expense,
net
|
(2)
|
|
|
(4)
|
|
Total other
expense
|
(33)
|
|
|
(6)
|
|
Net loss before
income tax
|
(42)
|
|
|
(6)
|
|
Income tax
provision
|
4
|
|
|
7
|
|
Net loss
|
(46)
|
|
|
(13)
|
|
Net loss attributable
to noncontrolling interest
|
(16)
|
|
|
(149)
|
|
Net income (loss)
attributable to Pattern Energy
|
$
|
(30)
|
|
|
$
|
136
|
|
|
|
|
|
Weighted-average
number of common shares outstanding
|
|
|
|
Basic
|
97,568,427
|
|
|
97,428,388
|
|
Diluted
|
97,568,427
|
|
|
105,564,491
|
|
Net income (loss)
per share attributable to Pattern Energy
|
|
|
|
Basic
|
$
|
(0.31)
|
|
|
$
|
1.39
|
|
Diluted
|
$
|
(0.31)
|
|
|
$
|
1.32
|
|
Adjusted EBITDA
and Cash Available for Distribution Non-GAAP
Reconciliations
|
|
The following tables
present a reconciliation of Adjusted EBITDA and cash available for
distribution to net loss, the most directly comparable GAAP
financial measure, for the periods indicated (unaudited and in
millions):
|
|
|
|
Three months ended
March 31,
|
|
|
2019
|
|
2018
|
Net loss
|
|
$
|
(46)
|
|
|
$
|
(13)
|
|
Plus:
|
|
|
|
|
Interest expense, net
of interest income
|
|
25
|
|
|
25
|
|
Income tax
provision
|
|
4
|
|
|
7
|
|
Depreciation,
amortization and accretion
|
|
89
|
|
|
63
|
|
EBITDA
|
|
$
|
72
|
|
|
$
|
82
|
|
Unrealized loss on
derivatives
|
|
5
|
|
|
5
|
|
Other
|
|
1
|
|
|
—
|
|
Plus,
proportionate share from unconsolidated investments:
|
|
|
|
|
Interest expense, net
of interest income
|
|
6
|
|
|
9
|
|
Depreciation,
amortization and accretion
|
|
6
|
|
|
9
|
|
(Gain) loss on
derivatives
|
|
8
|
|
|
(1)
|
|
Adjusted
EBITDA
|
|
$
|
98
|
|
|
$
|
104
|
|
Plus:
|
|
|
|
|
Distributions from
unconsolidated investments
|
|
14
|
|
|
20
|
|
Release of restricted
cash
|
|
—
|
|
|
2
|
|
Stock-based
compensation
|
|
1
|
|
|
1
|
|
Less:
|
|
|
|
|
Unconsolidated
investment earnings and proportionate shares for EBITDA
|
|
(15)
|
|
|
(38)
|
|
Interest expense,
less non-cash items and interest income
|
|
(23)
|
|
|
(23)
|
|
Income
taxes
|
|
(1)
|
|
|
—
|
|
Distributions to
noncontrolling interests
|
|
(11)
|
|
|
(9)
|
|
Principal payments
paid from operating cash flows
|
|
(10)
|
|
|
(14)
|
|
Cash available for
distribution
|
|
$
|
53
|
|
|
$
|
43
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding
|
|
|
|
|
Basic
|
|
97,568,427
|
|
|
97,428,388
|
|
|
|
|
|
|
Cash available for
distribution per share
|
|
|
|
|
Basic
|
|
$
|
0.54
|
|
|
$
|
0.44
|
|
Pattern Energy
Group Inc.
Consolidated
Balance Sheets
(In millions of
U.S. dollars, except share and par value data)
(Unaudited)
|
|
March
31,
|
|
December
31,
|
|
2019
|
|
2018
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
93
|
|
|
$
|
101
|
|
Restricted
cash
|
—
|
|
|
4
|
|
Counterparty
collateral
|
6
|
|
|
6
|
|
Trade
receivables
|
74
|
|
|
50
|
|
Derivative assets,
current
|
7
|
|
|
14
|
|
Prepaid
expenses
|
13
|
|
|
18
|
|
Deferred financing
costs, current, net of accumulated amortization of $3 and $3 as of
March 31, 2019 and December 31, 2018, respectively
|
2
|
|
|
2
|
|
Other current
assets
|
27
|
|
|
16
|
|
Total current
assets
|
222
|
|
|
211
|
|
Restricted
cash
|
15
|
|
|
18
|
|
Major construction
advances
|
86
|
|
|
84
|
|
Construction in
progress
|
277
|
|
|
259
|
|
Property, plant and
equipment, net
|
4,052
|
|
|
4,119
|
|
Unconsolidated
investments
|
257
|
|
|
270
|
|
Derivative
assets
|
7
|
|
|
9
|
|
Deferred financing
costs
|
8
|
|
|
8
|
|
Net deferred tax
assets
|
7
|
|
|
5
|
|
Intangible assets,
net
|
215
|
|
|
219
|
|
Goodwill
|
58
|
|
|
58
|
|
Other
assets
|
108
|
|
|
34
|
|
Total
assets
|
$
|
5,312
|
|
|
$
|
5,294
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
other accrued liabilities
|
$
|
83
|
|
|
$
|
67
|
|
Accrued construction
costs
|
13
|
|
|
27
|
|
Counterparty
collateral liability
|
6
|
|
|
6
|
|
Accrued
interest
|
7
|
|
|
14
|
|
Dividends
payable
|
42
|
|
|
42
|
|
Derivative
liabilities, current
|
3
|
|
|
2
|
|
Revolving credit
facility, current
|
234
|
|
|
198
|
|
Current portion of
long-term debt, net
|
59
|
|
|
56
|
|
Asset retirement
obligation, current
|
24
|
|
|
24
|
|
Contingent
liabilities, current
|
7
|
|
|
31
|
|
Other current
liabilities
|
23
|
|
|
11
|
|
Total current
liabilities
|
501
|
|
|
478
|
|
Revolving credit
facility
|
24
|
|
|
25
|
|
Long-term debt,
net
|
2,045
|
|
|
2,004
|
|
Derivative
liabilities
|
45
|
|
|
31
|
|
Net deferred tax
liabilities
|
118
|
|
|
117
|
|
Intangible
liabilities, net
|
47
|
|
|
56
|
|
Contingent
liabilities
|
142
|
|
|
142
|
|
Asset retirement
obligations
|
187
|
|
|
185
|
|
Other long-term
liabilities
|
132
|
|
|
71
|
|
Contract
liability
|
27
|
|
|
26
|
|
Total
liabilities
|
3,268
|
|
|
3,135
|
|
Commitments and
contingencies
|
|
|
|
Equity:
|
|
|
|
Class A common stock,
$0.01 par value per share: 500,000,000 shares authorized;
98,251,544 and 98,051,629 shares outstanding as of March 31, 2019
and December 31, 2018, respectively
|
1
|
|
|
1
|
|
Additional paid-in
capital
|
1,090
|
|
|
1,130
|
|
Accumulated
loss
|
(57)
|
|
|
(27)
|
|
Accumulated other
comprehensive loss
|
(73)
|
|
|
(52)
|
|
Treasury stock, at
cost; 247,995 and 223,040 shares of Class A common stock as of
March 31, 2019 and December 31, 2018, respectively
|
(5)
|
|
|
(5)
|
|
Total equity before
noncontrolling interest
|
956
|
|
|
1,047
|
|
Noncontrolling
interest
|
1,088
|
|
|
1,112
|
|
Total
equity
|
2,044
|
|
|
2,159
|
|
Total liabilities and
equity
|
$
|
5,312
|
|
|
$
|
5,294
|
|
Pattern Energy
Group Inc.
Consolidated
Statements of Cash Flows
(In millions of
U.S. dollars)
(Unaudited)
|
|
Three months ended
March 31,
|
|
2019
|
|
2018
|
Operating
activities
|
|
|
|
Net loss
|
$
|
(46)
|
|
|
$
|
(13)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation,
amortization and accretion
|
90
|
|
|
62
|
|
Loss on
derivatives
|
5
|
|
|
4
|
|
Stock-based
compensation
|
1
|
|
|
1
|
|
Deferred
taxes
|
3
|
|
|
7
|
|
(Earnings) losses in
unconsolidated investments, net
|
6
|
|
|
(18)
|
|
Distributions from
unconsolidated investments
|
7
|
|
|
14
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Counterparty
collateral asset
|
—
|
|
|
12
|
|
Trade
receivables
|
(23)
|
|
|
(6)
|
|
Other current
assets
|
(6)
|
|
|
2
|
|
Other assets
(non-current)
|
(11)
|
|
|
(1)
|
|
Accounts payable and
other accrued liabilities
|
15
|
|
|
(19)
|
|
Counterparty
collateral liability
|
—
|
|
|
(12)
|
|
Other current
liabilities
|
(31)
|
|
|
(9)
|
|
Other long-term
liabilities
|
(2)
|
|
|
4
|
|
Net cash provided by
operating activities
|
8
|
|
|
28
|
|
Investing
activities
|
|
|
|
Cash paid for
acquisitions and investments, net of cash and restricted cash
acquired
|
(7)
|
|
|
(193)
|
|
Capital
expenditures
|
(40)
|
|
|
(61)
|
|
Distributions from
unconsolidated investments
|
7
|
|
|
—
|
|
Other
assets
|
—
|
|
|
(17)
|
|
Net cash used in
investing activities
|
(40)
|
|
|
(271)
|
|
Financing
activities
|
|
|
|
Dividends
paid
|
(42)
|
|
|
(41)
|
|
Capital contributions
- noncontrolling interest
|
5
|
|
|
—
|
|
Capital distributions
- noncontrolling interest
|
(11)
|
|
|
(9)
|
|
Payment for financing
fees
|
—
|
|
|
(6)
|
|
Proceeds from
short-term debt
|
75
|
|
|
283
|
|
Repayment of
short-term debt
|
(41)
|
|
|
(35)
|
|
Proceeds from
long-term debt and other
|
45
|
|
|
113
|
|
Repayment of
long-term debt and other
|
(8)
|
|
|
(19)
|
|
Payment for
termination of designated derivatives
|
(3)
|
|
|
—
|
|
Other financing
activities
|
(1)
|
|
|
—
|
|
Net cash provided by
financing activities
|
19
|
|
|
286
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(2)
|
|
|
(1)
|
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash
|
(15)
|
|
|
42
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
123
|
|
|
138
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
108
|
|
|
$
|
180
|
|
Supplemental
disclosures
|
|
|
|
Cash payments for
income taxes
|
$
|
14
|
|
|
$
|
—
|
|
Cash payments for
interest expense
|
$
|
29
|
|
|
$
|
33
|
|
Schedule of
non-cash activities
|
|
|
|
Change in property,
plant and equipment
|
$
|
10
|
|
|
$
|
122
|
|
Conference Call and Webcast
Pattern Energy will host a conference call and webcast to
discuss these results at 10:30 a.m. Eastern
Time on Friday, May 10, 2019. Mike
Garland, CEO, and Esben
Pedersen, 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
4078346. The replay recording will be available until 11:59 p.m. Eastern Time, May 31, 2019.
A live webcast of the conference call with a presentation that
accompanies the call will be also available on the events page in
the invest 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 24 renewable
energy projects with an operating capacity of approximately 4
GW in the United States,
Canada and Japan that use proven, best-in-class
technology. Pattern Energy's wind and solar 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 2019 full
year guidance target and grow CAFD per share through 2020 without
the requirement to issue new common equity; the ability to maintain
the dividend, drive down the payout ratio, and fund the acquisition
of identified ROFO projects; and the ability of the investment in
Pattern Development to deliver meaningful growth beyond 2019. 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
|
|
Investor
Relations
|
Matt
Dallas
|
|
Ross
Marshall
|
917-363-1333
|
|
416-526-1563
|
matt.dallas@patternenergy.com
|
|
ross.marshall@loderockadvisors.com
|
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SOURCE Pattern Energy Group Inc.