SAN FRANCISCO, Nov. 5, 2013 (GLOBE NEWSWIRE) -- Pattern Energy Group Inc. (Nasdaq:PEGI) (TSX:PEG) (Pattern), a premium independent power company, today announced its financial results for the three-month period ended September 30, 2013 (third quarter of 2013).
Pattern was incorporated in October, 2012 by Pattern Energy Group LP ("PEG LP") for the purpose of owning PEG LP's in-construction and operating renewable energy assets. Subsequent to the third quarter of 2013, on October 2, 2013, Pattern closed its initial public offering and PEG LP contributed selected projects to Pattern in exchange for cash and common stock.
The results presented below are those of the combined predecessor entities (the "Company") for the periods ended September 30 which were contributed by PEG LP to Pattern on October 2, 2013.
Third Quarter 2013 Highlights
-
Electricity sales of 464.8 GWh, up 32% from 352.9 GWh for the same period last year
-
Revenue of $57.3 million, up 239% from $16.9 million for the same period last year
-
Net income of $4.2 million, compared to a net loss of $16.9 million for the same period last year
-
Adjusted EBITDA of $32.0 million, compared to $13.4 million for the same period last year
-
Cash available for distribution of $6.3 million, compared to $1.2 million for the same period last year
"Our initial public offering was very well received, reflecting the market's positive view of our fundamentals and growth potential," said Mike Garland, President and Chief Executive Officer. "Our focus remains on increasing the revenues at our projects while maintaining our equipment for long term performance and completing our two construction projects. Additionally, we are evaluating potential acquisitions to grow our CAFD per share."
Third Quarter Financial Results
Pattern sold 464,756 MWh of electricity in the third quarter of 2013 compared to 352,897 MWh sold in the same period last year.
Net income increased to $4.2 million in the third quarter of 2013 compared to a net loss of $16.9 million for the same period last year. The increases in the Company's operational and financial performance were primarily due to the start of commercial operations at Spring Valley in August 2012, at Santa Isabel in December 2012, and for 223 megawatts and 42 megawatts at Ocotillo in December 2012 and July 2013, respectively.
Adjusted EBITDA
Adjusted EBITDA was $32.0 million for the third quarter of 2013 compared to $13.4 million in the same period last year. For the nine months ended September 30, 2013, Adjusted EBITDA was $112.4 million compared to $54.1 million for the same period last year. A reconciliation of Adjusted EBITDA to net income determined in accordance with GAAP is shown below.
Cash Available for Distribution
Cash available for distribution was $6.3 million for the third quarter of 2013 compared to $1.2 million in the same period last year. For the nine months ended September 30, 2013, cash available for distribution was $37.0 million compared to $12.1 million for the same period last year. A reconciliation of cash available for distribution to net cash provided by operating activities determined in accordance with GAAP is shown below.
Liquidity and IPO
At September 30, 2013, the Company's available liquidity was $302.9 million, including unrestricted cash on hand of $149.1 million, restricted cash on hand of $40.6 million, and $113.2 million available under its credit agreements.
On October 2, 2013, Pattern issued 16,000,000 shares of Class A common stock in an IPO generating net proceeds of approximately $318 million. Concurrent with the IPO, Pattern issued 19,445,000 shares of Class A common stock and 15,555,000 shares of Class B common stock to PEG LP and utilized approximately $233 million of the net proceeds of the IPO as a portion of the consideration to PEG LP for the contributed entities represented by the Company.
Regulation G Disclosures
Adjusted EBITDA is not a measure recognized under GAAP and is therefore unlikely to be comparable to similar measures presented by other companies and does not have a standardized meaning prescribed by GAAP. Management uses Adjusted EBITDA to provide comparative information about business performance and believes such information is helpful to investors. The Company defines Adjusted EBITDA as net income before net interest expense, income taxes and depreciation and accretion, including its proportionate share of net interest expense, income taxes and depreciation and accretion of joint venture investments that are accounted for under the equity method, and excluding the effect of certain other items that the Company does not consider to be indicative of its ongoing operating performance such as mark-to-market adjustments and infrequent items not related to normal or ongoing operations, such as early payment of debt and realized derivative gain or loss from refinancing transactions, and gain or loss related to acquisitions or divestitures. In calculating Adjusted EBITDA, the Company excludes mark-to-market adjustments to the value of its derivatives because the Company believes that it is useful for investors to understand, as a supplement to net income and other traditional measures of operating results, the results of its operations without regard to periodic, and sometimes material, fluctuations in the market value of such assets or liabilities. A reconciliation of net income (loss) to Adjusted EBITDA is provided below. Investors are cautioned that the Company may calculate these measures in a manner that is different from other companies.
Cash available for distribution is not a measure recognized under GAAP. Management believes that cash available for distribution is a relevant supplemental measure of the Company's ability to earn and distribute cash returns to investors. The Company defines cash available for distribution as cash provided by operating activities as adjusted to (i) add or subtract changes in operating assets and liabilities, (ii) subtract net deposits into restricted cash accounts, which are required pursuant to the cash reserve requirements of financing agreements, to the extent they are paid from operating cash flows during a period, (iii) subtract cash distributions paid to noncontrolling interests, which currently reflects the cash distributions to its joint venture partners in its Gulf Wind project in accordance with the provisions of its governing partnership agreement and may in the future reflect distribution to other joint venture partners, (iv) subtract scheduled project-level debt repayments in accordance with the related loan amortization schedule, to the extent they are paid from operating cash flows during a period, (v) subtract non-expansionary capital expenditures, to the extent they are paid from operating cash flows during a period, and (vi) add or subtract other items as necessary to present the cash flows the Company deem representative of its core business operations. A reconciliation of net cash provided by operating activities to cash available for distribution is provided below. Investors are cautioned that the Company may calculate these measures in a manner that is different from other companies.
The most directly comparable U.S. GAAP measure to Adjusted EBITDA is net income (loss). The following table is a reconciliation of the Company's net income (loss) to Adjusted EBITDA for the periods presented:
|
|
Pattern Energy Predecessor |
|
|
Three Months Ended
September 30, 2013 |
Three Months Ended
September 30, 2012 |
Nine Months Ended
September 30, 2013 |
Nine Months Ended
September 30, 2012 |
|
|
(U.S. dollars in thousands) |
|
Net income (loss) |
$ 4,244 |
$ (16,913) |
$ 29,450 |
$ (8,921) |
|
Plus: |
|
|
|
|
|
Interest expense, net of interest income |
14,260 |
8,817 |
45,932 |
24,513 |
|
Tax provision (benefit) |
595 |
243 |
(6,801) |
1,247 |
|
Depreciation and accretion |
21,194 |
12,815 |
61,758 |
34,551 |
|
EBITDA |
$ 40,293 |
$ 4,962 |
$ 130,339 |
$ 51,390 |
|
Unrealized (gain) loss on energy derivative |
(6,659) |
8,690 |
5,222 |
6,944 |
|
Unrealized (gain) loss on interest rate derivatives |
(776) |
(63) |
(10,909) |
32 |
|
Realized loss on interest rate derivatives |
1,059 |
-- |
1,059 |
-- |
|
Gain on transactions |
-- |
-- |
(7,200) |
(4,173) |
|
Plus, our proportionate share in the following from our equity accounted investments: |
|
|
|
|
|
Interest expense, net of interest income |
91 |
-- |
39 |
-- |
|
Tax (benefit) provision |
(36) |
1 |
(84) |
57 |
|
Depreciation and accretion |
3 |
-- |
14 |
-- |
|
Unrealized gain on interest rate and currency derivatives |
(2,143) |
(212) |
(6,091) |
(194) |
|
Realized loss (gain) on interest rate and currency derivatives |
118 |
34 |
(35) |
38 |
|
Adjusted EBITDA |
$ 31,950 |
$ 13,412 |
$ 112,354 |
$ 54,094 |
The most directly comparable U.S. GAAP measure to cash available for distribution is net cash provided by operating activities. The following table is a reconciliation of the Company's net cash provided by operating activities to cash available for distribution for the periods presented:
|
|
Pattern Energy Predecessor |
|
|
Three Months Ended
September 30, 2013 |
Three Months Ended
September 30, 2012 |
Nine Months Ended
September 30, 2013 |
Nine Months Ended
September 30, 2012 |
|
|
(U.S. dollars in thousands) |
|
|
|
|
|
|
|
Net cash provided by operating activities |
$ 26,739 |
$ 5,696 |
$ 68,398 |
$ 30,507 |
|
Changes in current operating assets and liabilities |
(8,753) |
(709) |
3,004 |
(74) |
|
Network upgrade reimbursement |
618 |
618 |
1,236 |
5,027 |
|
Use of operating cash to fund maintenance and debt reserves |
-- |
-- |
-- |
(525) |
|
Operations and maintenance capital expenditures |
(56) |
(350) |
(431) |
(604) |
|
Less: |
|
|
|
|
|
Distributions to noncontrolling interests |
(258) |
-- |
(1,426) |
(1,054) |
|
Principal payments paid from operating cash flows (1) |
(11,973) |
(4,018) |
(33,788) |
(21,190) |
|
Cash available for distribution |
$ 6,317 |
$ 1,237 |
$ 36,993 |
$ 12,087 |
|
|
|
|
|
|
|
(1) Excludes $7,495 of principal pre-payments on our Ocotillo project which were paid from ITC cash grant proceeds |
Conference Call and Webcast
Pattern will host a conference call and webcast to discuss these results at 10:30 a.m. U.S. Eastern Time on Tuesday, November 5, 2013. 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 earnings call. Please dial in 10-15 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 93686017. The replay recording will be available until Wednesday, November 20, 2013.
A live webcast of the conference call will be also available in the investor section of Pattern's website at www.patternenergy.com. An archived webcast will be available for one year.
About Pattern Energy Group Inc.
Pattern is an independent energy generation company focused on constructing, owning and operating energy projects. For more information about Pattern, please visit our website at 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. 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 prospectus filed with the SEC and applicable Canadian securities regulatory authorities in connection with the Company's initial public offering. The risk factors and other factors noted in the prospectus could cause actual events or the Company's actual results to differ materially from those contained in any forward-looking statement.
|
Pattern Energy Predecessor |
|
Combined Balance Sheets |
|
(in thousands of U.S. dollars) |
|
|
|
|
|
|
September 30, |
December 31, |
|
|
2013 |
2012 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ 149,089 |
$ 17,573 |
|
Trade receivables |
20,189 |
13,715 |
|
Related party receivable |
78 |
-- |
|
Reimbursable interconnection costs |
1,444 |
51,307 |
|
Derivative assets, current |
15,789 |
17,177 |
|
Prepaid expenses and other current assets |
14,648 |
13,794 |
|
Total current assets |
201,237 |
113,566 |
|
|
|
|
|
Restricted cash |
40,560 |
13,904 |
|
Turbine advances |
-- |
44,150 |
|
Deferred development costs |
-- |
26,544 |
|
Construction in progress |
-- |
6,081 |
|
Property, plant and equipment, net of accumulated depreciation of $159,991 and $100,247 in 2013 and 2012, respectively |
1,506,029 |
1,668,302 |
|
Unconsolidated investments |
78,271 |
36,218 |
|
Derivative assets |
75,502 |
62,895 |
|
Deferred financing costs, net of accumulated amortization of $14,877 and $9,311 in 2013 and 2012, respectively |
37,240 |
42,654 |
|
Net deferred tax assets |
11,949 |
4,940 |
|
Other assets |
13,659 |
16,475 |
|
Total assets |
$ 1,964,447 |
$ 2,035,729 |
|
|
|
|
|
Liabilities and equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and other accrued liabilities |
$ 11,790 |
$ 7,743 |
|
Accrued construction costs |
6,112 |
67,206 |
|
Related party payable |
-- |
198 |
|
Accrued interest |
1,385 |
559 |
|
Contingent liabilities |
-- |
8,001 |
|
Derivative liabilities, current |
16,296 |
13,462 |
|
Revolving credit facility |
56,000 |
-- |
|
Current portion of long-term debt |
47,004 |
137,258 |
|
Total current liabilities |
138,587 |
234,427 |
|
|
|
|
|
Long-term debt |
1,217,972 |
1,153,312 |
|
Derivative liabilities |
10,535 |
35,326 |
|
Asset retirement obligation |
20,631 |
19,056 |
|
Net deferred tax liabilities |
3,712 |
3,662 |
|
Other long-term liabilities |
3,333 |
528 |
|
Total liabilities |
1,394,770 |
1,446,311 |
|
|
|
|
|
Equity: |
|
|
|
Capital |
473,514 |
545,471 |
|
Accumulated income |
33,050 |
2,910 |
|
Accumulated other comprehensive loss |
(13,631) |
(34,264) |
|
Total equity before noncontrolling interest |
492,933 |
514,117 |
|
Noncontrolling interest |
76,744 |
75,301 |
|
Total equity |
569,677 |
589,418 |
|
Total liabilities and equity |
$ 1,964,447 |
$ 2,035,729 |
|
|
|
|
|
Pattern Energy Predecessor |
|
Combined Statements of Operations |
|
(in thousands of U.S. dollars) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
Three Months ended September 30, |
Nine Months ended September 30, |
|
|
2013 |
2012 |
2013 |
2012 |
|
Revenue: |
|
|
|
|
|
Electricity sales |
$ 37,950 |
$ 22,285 |
$ 130,533 |
$ 72,160 |
|
Energy derivative settlements |
2,656 |
3,308 |
12,873 |
14,967 |
|
Unrealized gain (loss) on energy derivative |
6,659 |
(8,690) |
(5,222) |
(6,944) |
|
Related party revenue |
202 |
-- |
465 |
-- |
|
Other revenue |
9,790 |
-- |
21,157 |
-- |
|
Total revenue |
57,257 |
16,903 |
159,806 |
80,183 |
|
|
|
|
|
|
|
Cost of revenue: |
|
|
|
|
|
Project expense |
14,592 |
9,301 |
42,061 |
25,061 |
|
Depreciation and accretion |
21,194 |
12,815 |
61,758 |
34,551 |
|
Total cost of revenue |
35,786 |
22,116 |
103,819 |
59,612 |
|
|
|
|
|
|
|
Gross profit (loss) |
21,471 |
(5,213) |
55,987 |
20,571 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
General and administrative |
213 |
74 |
562 |
587 |
|
Related party general and administrative |
3,607 |
2,836 |
8,968 |
7,587 |
|
Total operating expenses |
3,820 |
2,910 |
9,530 |
8,174 |
|
|
|
|
|
|
|
Operating income (loss) |
17,651 |
(8,123) |
46,457 |
12,397 |
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
Interest expense |
(14,695) |
(9,013) |
(48,169) |
(25,195) |
|
Equity in earnings in unconsolidated investments |
1,845 |
117 |
5,188 |
13 |
|
Interest rate derivative settlements |
(1,059) |
-- |
(1,059) |
-- |
|
Unrealized gain (loss) on derivatives |
776 |
63 |
10,909 |
(32) |
|
Net gain on transactions |
-- |
-- |
7,200 |
4,173 |
|
Other income, net |
321 |
286 |
2,123 |
970 |
|
Total other expense |
(12,812) |
(8,547) |
(23,808) |
(20,071) |
|
|
|
|
|
|
|
Net income (loss) before income tax |
4,839 |
(16,670) |
22,649 |
(7,674) |
|
Tax provision (benefit) |
595 |
243 |
(6,801) |
1,247 |
|
Net income (loss) |
4,244 |
(16,913) |
29,450 |
(8,921) |
|
|
|
|
|
|
|
Net income (loss) attributable to noncontrolling interest |
3,248 |
(7,494) |
(690) |
(5,943) |
|
Net income (loss) attributable to controlling interest |
$ 996 |
$ (9,419) |
$ 30,140 |
$ (2,978) |
|
|
|
|
|
|
|
Unaudited pro forma net income after tax: |
|
|
|
|
|
Net income before income tax |
|
|
$ 22,649 |
|
|
Pro forma tax benefit |
|
|
(2,232) |
|
|
Pro forma net income |
|
|
$ 24,881 |
|
|
|
|
|
|
Pattern Energy |
|
Combined Statements of Cash Flows |
|
(in thousands of U.S. dollars) |
|
(Unaudited) |
|
|
|
|
|
|
Nine Months ended September 30, |
|
|
2013 |
2012 |
|
Operating activities |
|
|
|
Net income (loss) |
$ 29,450 |
$ (8,921) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
Depreciation and accretion |
61,758 |
34,551 |
|
Amortization of financing costs |
5,428 |
1,268 |
|
Unrealized (gain) loss on derivatives |
(5,687) |
6,976 |
|
Net gain on transactions |
(7,200) |
(4,173) |
|
Deferred taxes |
(6,801) |
1,247 |
|
Equity in earnings in unconsolidated investments |
(5,188) |
(13) |
|
Changes in operating assets and liabilities: |
|
|
|
Trade receivables |
(7,935) |
2,716 |
|
Prepaid expenses and other current assets |
(3,393) |
(3,378) |
|
Other assets (non current) |
(358) |
(314) |
|
Accounts payable and other accrued liabilities |
4,862 |
(931) |
|
Related party receivable/payable |
(291) |
682 |
|
Accrued interest payable |
857 |
985 |
|
Contingent liabilities |
-- |
(188) |
|
Long-term liabilities |
2,896 |
-- |
|
Net cash provided by operating activities |
68,398 |
30,507 |
|
|
|
|
|
Investing activities |
|
|
|
Receipt of ITC Cash Grant |
173,446 |
-- |
|
Proceeds from sale of investments and tax credits |
14,254 |
4,173 |
|
Decrease in restricted cash - interconnect and PPA security |
63,732 |
441 |
|
Increase in restricted cash - interconnect and PPA security |
(80,567) |
(844) |
|
Capital expenditures |
(120,965) |
(360,076) |
|
Deferred development costs |
(528) |
(5,402) |
|
Distribution from unconsolidated investments |
10,463 |
-- |
|
Contribution to unconsolidated investments |
(8,737) |
(20,954) |
|
Reimbursable interconnection receivable |
49,715 |
(41,392) |
|
Other assets (non current) |
1,740 |
1,835 |
|
Net cash provided by (used in) investing activities |
102,553 |
(422,219) |
|
|
|
|
|
Financing activities |
|
|
|
Capital contributions - controlling interest |
32,677 |
234,787 |
|
Capital distributions - controlling interest |
(98,886) |
(25,779) |
|
Capital distributions - noncontrolling interest |
(1,426) |
(1,054) |
|
Decrease in restricted cash - debt service reserves |
116,654 |
8,773 |
|
Increase in restricted cash - debt service reserves |
(126,475) |
(15,209) |
|
Payment for deferred financing costs |
(294) |
(45) |
|
Proceeds from revolving credit facility |
56,000 |
-- |
|
Proceeds from long-term debt |
138,620 |
194,858 |
|
Repayment of long-term debt |
(41,283) |
(21,190) |
|
Repayment of construction and grant loans |
(114,056) |
-- |
|
Net cash (used in) provided by financing activities |
(38,469) |
375,141 |
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
(966) |
748 |
|
Net change in cash and cash equivalents |
132,482 |
(16,571) |
|
Cash and cash equivalents at beginning of period |
17,573 |
47,672 |
|
Cash and cash equivalents at end of period |
$ 149,089 |
$ 31,849 |
|
|
|
|
|
Supplemental disclosure |
|
|
|
Cash payments for interest and commitment fees |
$ 45,178 |
$ 29,351 |
|
Schedule of non-cash activities |
|
|
|
Change in fair value of interest rate swaps |
38,266 |
(10,216) |
|
Change in fair value of contingent liabilities |
8,001 |
(314) |
|
Amortization of deferred financing costs - included as construction in progress |
175 |
2,429 |
|
Capitalized interest |
3,230 |
6,362 |
|
Capitalized commitment fee |
39 |
556 |
|
Change in property, plant and equipment |
(160,021) |
41,372 |
|
Transfer of capitalized assets to South Kent joint venture |
49,275 |
-- |
|
Non-cash distribution to parent |
(5,748) |
-- |
CONTACT: Investor Relations
Ross Marshall
T: (416) 815-0700 ext. 238
E: rmarshall@tmxequicom.com
Media Relations
Matt Dallas
T: (917) 363-1333
E: matt.dallas@patternenergy.com
