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Pattern Energy Reports Third Quarter 2017 Financial Results

By Pattern Energy Operations LP
November 9th, 2017
PR Newswire

- 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.

pattern_logo.jpg

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(at)patternenergy.com

 

Investor Relations

Ross Marshall

416-526-1563

ross.marshall(at)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.

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