Pattern Energy Reports Fourth Quarter and Year End 2017 Financial Results
- Declares dividend of $0.422 per Class A common share for first quarter 2018 -
SAN FRANCISCO, March 1, 2018 /PRNewswire/ -- Pattern Energy Group Inc. (the "Company" or "Pattern Energy") (NASDAQ and TSX: PEGI) today announced its financial results for the 2017 fourth quarter and year.
Highlights
(Comparisons made between fiscal 2017 and fiscal 2016 results, unless otherwise noted)
-- Proportional gigawatt hours ("GWh") sold of 7,787 GWh, up 14%
-- Net cash provided by operating activities of $218 million, up 33%
-- Cash available for distribution ("CAFD") of $145.8 million, up 10%
-- Net loss of $82.4 million
-- Adjusted EBITDA of $343.7 million, up 13%
-- Revenue of $411.3 million, up 16%
-- Declared a first quarter dividend of $0.422 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
-- Agreed to acquire 206 MW of owned capacity in five Japanese projects
which represents the Company's entry into one of the most robust
renewables markets in the world, subsequent to the end of the period
-- Returned the Santa Isabel project in Puerto Rico to operation at a
limited capacity, after reconnection to the grid by the Puerto Rico
Electric Authority ("PREPA"), in February 2018
-- Raised $58.6 million in capital through asset rotation with the
completion of the sale of a 49% interest of the Class B membership
interest in the 182 MW Panhandle 2 project to Public Sector Pension
Investment Board ("PSP Investments")
-- Invested $27 million in Pattern Energy Group 2 LP's ("Pattern
Development 2.0") announced acquisition of the majority interest in
Green Power Investments ("GPI") and the Japanese development pipeline
from Pattern Energy Group LP ("Pattern Development 1.0"), subsequent to
the end of the period
-- Completed an equity offering of approximately $215 million in gross
proceeds
"We met our targeted CAFD range for the year, however the result was not as strong as we had anticipated primarily due to unexpected curtailments from one-time transmission repairs in Texas and Arizona, as well as weaker than expected wind resources at the very end of the year. We increased our portfolio to nearly three gigawatts, with the additions of Broadview, Meikle and the Japanese portfolio since the beginning of 2017," said Mike Garland, President and CEO of Pattern Energy. "We paid for these acquisitions from available liquidity. Our investment in the development business strengthened the platform and improved alignment across the business providing greater flexibility. We continue to have many opportunities for growth; however, we intend to be disciplined in our approach toward new capital given the recent volatility in the capital markets and we intend to pursue alternatives for owning and managing quality projects. The capital we captured from the sale of a minority interest in the Panhandle 2 project in December is just one example of the alternatives we can consider to fund future growth."
Financial Results
Pattern Energy sold 2,123,628 MWh of electricity on a proportional basis in the fourth quarter of 2017 compared to 1,817,651 MWh sold for the same period in 2016. Pattern Energy sold 7,787,411 MWh of electricity on a proportional basis for the year ended December 31, 2017 (the "full year 2017"), compared to 6,806,272 MWh sold in 2016. The increase for the quarterly period was primarily due to the commencement of commercial operations of the Broadview projects in April 2017 and the acquisition of Meikle in the third quarter of 2017. Production for the quarter was 9% below the long-term average forecast for the quarter. The increase in the annual period was primarily attributable to a 748,277 MWh increase in volume from controlling interest in consolidated MWh due to the acquisitions of the Broadview and Meikle projects and a 232,862 MWh increase in volume from unconsolidated investments due to the acquisition of Armow in October 2016.
Net cash provided by operating activities was $58.3 million for the fourth quarter of 2017 compared to $56.3 million for the same period in 2016, an increase of $2.0 million or 3.5%. The increase was primarily due to increased revenues of $26.1 million (excluding the unrealized loss on energy derivative and amortization of PPAs) primarily related to projects which were acquired in 2017. These increases in operating cash flow were partially offset by an increase of $9.5 million in transmission and project expense, an increase of $5.3 million in interest payments, a decrease of $3.8 million in distributions from unconsolidated investments and other changes to working capital as a result of the timing of receipts of payments and disbursements.
Net cash provided by operating activities was $217.6 million for the full year 2017 compared to $163.7 million for 2016, an increase of $53.9 million, or 33.0%. The increase was primarily due to higher revenues of $49.0 million (excluding the unrealized loss on energy derivative and amortization of PPAs) primarily from projects which were acquired in 2017, and an increase of $38.9 million in distributions from unconsolidated investments. These increases were partially offset by an increase of $21.2 million in transmission and project expense, an increase of $16.3 million in interest payments, an increase of $7.0 million in operating expenses and other changes to working capital as a result of the timing of receipts of payments and disbursements.
Cash available for distribution was $41.9 million for the fourth quarter of 2017 compared to $36.2 million for the same period in 2016. The $5.7 million increase in cash available for distribution was due to increases of $26.1 million in revenues (excluding the unrealized loss on energy derivative and amortization of PPAs) primarily from projects which were acquired during 2017 and $7.2 million in available cash previously restricted to fund project costs. These increases were partially offset by increased interest expense of $11.4 million (excluding amortization of financing costs and debt discount/premium) primarily due to the issuance of the unsecured notes in January 2017 and debt associated with acquisitions, increased transmission costs of $7.1 million, decreased network upgrade reimbursements of $4.5 million and decreased distributions from unconsolidated investments of $3.3 million, as well as, $2.1 million in increased principal payments on project-level debt, as compared to amounts from the same period in the prior year.
Cash available for distribution was $145.8 million for the full year 2017 compared to $133.0 million for 2016. Based on dividends paid during 2017, Pattern Energy's dividend payout ratio was 100% of 2017 cash available for distribution. The $12.8 million increase in cash available for distribution was due to additional revenues of $49.0 million (excluding the unrealized loss on energy derivative and amortization of PPAs) primarily from projects which were acquired or commenced commercial operations during 2017. In addition, we received $10.6 million in additional cash distributions from our unconsolidated investments, an incremental $6.6 million in available cash previously restricted to fund project costs and an additional $4.5 million in network upgrade reimbursements primarily related to the Broadview projects as compared to amounts received during the same period in the prior year. These increases were partially offset by increased interest expense of $23.0 million primarily due to the issuance of the unsecured notes in January 2017 and debt associated with our acquisitions, increased transmission costs and project expense totaling $21.2 million, increased operating expenses of $7.0 million, increased principal payments on project-level debt of $3.6 million and increased distributions to noncontrolling interests of $2.4 million. Reconciliations of cash available for distribution to net cash provided by operating activities determined in accordance with GAAP for both the quarterly and annual periods are shown below.
Net loss was $21.9 million in the fourth quarter of 2017, compared to net income of $3.4 million for the same period in 2016. The increase in net loss for the quarterly period was primarily due to a $34.3 million increase in other expense primarily related to increases in interest expense, early extinguishment of debt, losses on derivatives due to unfavorable impacts from foreign currency exchange rates and the termination of interest rate swaps and a $19.8 million increase in cost of revenues primarily related to 2017 acquisitions. The increase in net loss was partially offset by increased revenues of $29.7 million primarily related to 2017 acquisitions.
Net loss was $82.4 million for the full year 2017 compared to $52.3 million for 2016. The increase in net loss for the annual period was primarily due to a $45.3 million increase in cost of revenues primarily due to 2017 acquisitions, a $32.0 million increase in other expense primarily related to increases in interest expense, early extinguishment of debt, losses on derivatives due to unfavorable impacts from foreign currency exchange rates and the termination of interest rate swaps, a $7.0 million increase in operating expense and a $3.1 million increase in the tax provision. The increase in net loss was partially offset by increased revenues of $57.3 million.
Adjusted EBITDA was $98.9 million for the fourth quarter of 2017 compared to $85.1 million for the same period in 2016. Adjusted EBITDA for the full year 2017 was $343.7 million compared to $304.2 million for 2016. The $13.8 million increase in Adjusted EBITDA for the quarterly period was primarily attributable to an increase of $26.1 million in revenues (excluding unrealized loss on energy derivative and amortization of PPAs) primarily from projects acquired during 2017, partially offset by an increase of $9.5 million in transmission cost and project expense, as well as a $2.3 million decrease in the proportionate share of Adjusted EBITDA from unconsolidated investments. The $39.5 million increase in the annual period was primarily due to a $49.0 million increase in revenue (excluding unrealized loss on the energy derivative and amortization of PPAs) attributable to projects which were acquired or commenced commercial operations in 2017 and a $20.9 million increase in our proportionate share of Adjusted EBITDA from unconsolidated investments partially offset by a $21.2 million increase in transmission and project expense, a $7.0 million increase in operating expenses and a $1.0 million increase in transaction costs. Reconciliations of Adjusted EBITDA to net loss determined in accordance with GAAP for both the quarterly and annual periods are shown below.
2018 Financial Guidance
For the full year 2018, Pattern Energy expects annual cash available for distribution(*) in a range of $151 million to $181 million, representing an increase of 14% at the midpoint of the range, compared to cash available for distribution in 2017.
(*) The forward looking measure of 2018
full year cash available for
distribution (CAFD) is a non-GAAP
measures 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 7,
Management's Discussion and
Analysis of Financial Condition and
Results of Operations - Key
Metrics, of Pattern Energy's 2017
Annual Report on Form 10-K for the
period ended December 31, 2017.
Quarterly Dividend
Pattern Energy declared a dividend for the first quarter 2018, payable on April 30, 2018, to holders of record on March 30, 2018, in the amount of $0.422 per Class A common share, which represents $1.688 on an annualized basis. The amount of the first quarter 2018 dividend is unchanged from the fourth quarter 2017 dividend.
Construction Pipeline
The table below outlines the projects that Pattern Energy has agreed to acquire, which are currently in construction, the capacity owned and the projects' anticipated commencement date for commercial operation.
MW
Project Location Construction Commercial Rated (2) Owned
Start Operations (1)
--- ----- -------------
Mont Sainte-
Marguerite Quebec 2017 2018 143 73
Ohorayama Japan 2016 2018 33 33
Tsugaru Japan 2018 2020 122 122
--- ---
(1) Represents year of actual or
anticipated commencement of commercial
operations.
(2) 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 may 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.
Acquisitions
Subsequent to the end of the period, Pattern Energy agreed to acquire 206 MW of owned interest in five projects in operation or under construction located in Japan from Pattern Development 1.0 and GPI. Pattern Energy agreed to acquire two operating solar projects (Futtsu and Kanagi), one operating wind project (Otsuki) and two under construction wind projects (Ohorayama and Tsugaru), each of which possess a 20-year power purchase agreement with attractive pricing from a top tier, creditworthy off-taker.
Pattern Energy agreed to acquire the 84 MW portfolio of Futtsu, Kanagi, Otsuki and Ohorayama for a cash purchase price of $131.5 million, which represents approximately a 10.5x multiple of the five-year average CAFD(*).
Pattern Energy agreed to acquire the 122 MW Tsugaru project at the start of construction, once fully financed on a non-recourse basis, for a total cash consideration of $194.0 million, which represents a 9.0x multiple of the five-year average CAFD(*) starting with the first full year of operations in 2021.
(*) This forward looking measure of
five-year average annual purchase
price multiple of cash available
for distribution (CAFD)
contribution from the Japan
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 7,
Management's Discussion and
Analysis of Financial Condition and
Results of Operations - Key
Metrics, of Pattern Energy's 2017
Annual Report on Form 10-K for the
period ended December 31, 2017.
Acquisition Pipeline
Pattern Development 1.0 and Pattern Development 2.0 (together, the Pattern Development Companies) have a pipeline of development projects totaling more than 10 GW. Pattern Energy has a Right of First Offer ("ROFO") on the pipeline of acquisition opportunities from the Pattern Development Companies. The identified ROFO list stands at 935 MW of owned capacity and represents a portion of the pipeline of development projects of the Pattern Development Companies, which are subject to Pattern Energy's ROFO. Since its IPO, Pattern Energy has purchased, or agreed to purchase, 1,564 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 the Pattern Development Companies in connection with Pattern Energy's project purchase rights:
Capacity (MW)
Status Location Construction Commercial Contract Rated (3) Pattern
Start (1) Operations (2) Type Development
Companies
Owned (4)
Identified
ROFO Projects
-------------
Pattern Development 1.0 Projects
Conejo Solar(5) Operational Chile 2015 2016 PPA 104 104
Belle River Operational Ontario 2016 2017 PPA 100 43
El Cabo Operational New Mexico 2016 2017 PPA 298 125
North Kent Operational Ontario 2017 2018 PPA 100 35
Henvey Inlet In construction Ontario 2017 2019 PPA 300 150
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
Sumita Late stage development Japan 2019 2021 PPA 100 55
Ishikari Late stage development Japan 2019 2022 PPA 100 100
--- ---
1481 935
(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) Owned capacity represents the maximum,
or rated, electricity generating
capacity of the project in MW
multiplied by either 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, we conduct strategic
reviews of our markets. We have been
conducting a strategic review of the
market, growth, and opportunities in
Chile. In the event we believe we 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, we 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 loss to Adjusted EBITDA, respectively, for the periods presented (in thousands):
Three months ended December 31, For the year ended December 31,
2017 2016 2017 2016
---- ---- ---- ----
Net cash provided by
operating activities
(1) $58,283 $56,293 $217,613 $163,664
Changes in operating
assets and
liabilities (9,093) (11,800) (31,568) (11,000)
Network upgrade
reimbursement 346 4,821 9,282 4,821
Release of restricted
cash to fund project
and general and
administrative costs 7,239 50 7,239 640
Operations and
maintenance capital
expenditures (266) (138) (783) (1,017)
Distributions from
unconsolidated
investments 2,147 1,632 13,358 41,698
Other 208 (172) 2,182 (302)
Less:
Distributions to
noncontrolling
interests (6,549) (6,125) (20,250) (17,896)
Principal payments
paid from operating
cash flows (10,367) (8,312) (51,278) (47,634)
------- ------ ------- -------
Cash available for
distribution $41,948 $36,249 $145,795 $132,974
======= ======= ======== ========
Three months ended December 31, For the year ended December 31,
2017 2016 2017 2016
---- ---- ---- ----
Net income (loss) $(21,889) $3,445 $(82,410) $(52,299)
Plus:
Interest expense, net of
interest income 27,678 15,692 100,687 76,598
Tax provision 6,257 4,641 11,734 8,679
Depreciation, amortization
and accretion 58,863 47,028 215,492 184,002
------ -------
EBITDA 70,909 70,806 245,503 216,980
Unrealized loss on energy
derivative (1) 3,911 7,797 14,045 22,767
(Gain) loss on derivatives (1,900) (14,361) 9,787 3,324
Early extinguishment of
debt 8,643 - 8,643 -
Other (1,585) (27) - 326
Adjustments from
unconsolidated investments
(2) - 18,914 - (659)
Plus, proportionate share
from unconsolidated
investments:
Interest expense, net of
interest income 10,132 9,325 39,240 32,103
Depreciation, amortization
and accretion 8,921 8,139 35,311 27,763
(Gain) loss on derivatives (133) (15,463) (8,829) 1,552
----
Adjusted EBITDA $98,898 $85,130 $343,700 $304,156
======= ======= ======== ========
(1) Amount is included in electricity
sales on the consolidated statements
of operations.
(2) Adjustments from unconsolidated
investments for the three months
ended December 31, 2016, consists of
$4.9 million gains on distributions
from unconsolidated investments and
$(23.8) million of suspended equity
earnings. Adjustments for the year
ended December 31, 2016, consists of
$19.9 million gains on distributions
from unconsolidated investments and
$(19.2) million of suspended equity
earnings.
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 Thursday, March 1, 2018. 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 7391418. The replay recording will be available until 11:59 p.m. Eastern Time, March 22, 2018.
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 25 wind and solar power facilities, including six it has agreed to acquire, with a total owned interest of 2,942 MW in the United States, Canada, Japan 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 grow CAFD and to achieve the 2018 CAFD estimate, the ability to consummate the acquisitions of the projects the Company has agreed to acquire and the timing thereof, the Company's ability to pursue alternatives for owning and managing assets, the ability to be disciplined in its approach to new capital, that the investment in the development business strengthened the platform and improved alignment, the measures of five-year average annual purchase price of the acquisitions to CAFD, and the anticipated date for commercial operations of the projects under construction. 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
----------------------------- ----------------------------------
Pattern Energy Group Inc.
Consolidated Balance Sheets
(In thousands of U.S. dollars, except share and par value data)
December 31,
2017 2016
---- ----
Assets
Current assets:
Cash and cash equivalents $116,753 $83,932
Restricted cash 9,065 11,793
Funds deposited by counterparty 29,780 43,635
Trade receivables 54,900 37,510
Derivative assets, current 19,445 17,578
Prepaid expenses 17,847 13,803
Other current assets 21,105 7,350
Deferred financing costs,
current, net of accumulated
amortization of $2,580 and
$9,350 as of December 31, 2017
and December 31, 2016,
respectively 1,415 2,456
----- -----
Total current assets 270,310 218,057
Restricted cash 12,162 13,646
Property, plant and equipment,
net 3,965,121 3,135,162
Unconsolidated investments 311,223 233,294
Derivative assets 9,628 26,712
Deferred financing costs 7,784 4,052
Net deferred tax assets 6,349 5,559
Finite-lived intangible
assets, net 136,048 91,895
Other assets 22,906 24,390
Total assets $4,741,531 $3,752,767
Liabilities and equity
Current liabilities:
Accounts payable and other
accrued liabilities $53,615 $31,305
Accrued construction costs 1,369 1,098
Counterparty deposit liability 29,780 43,635
Accrued interest 16,460 9,545
Dividends payable 41,387 35,960
Derivative liabilities, current 8,409 11,918
Revolving credit facility - 180,000
Current portion of long-term
debt, net 51,996 48,716
Other current liabilities 14,018 4,698
------ -----
Total current liabilities 217,034 366,875
Long-term debt, net 1,878,735 1,334,956
Derivative liabilities 20,972 24,521
Net deferred tax liabilities 56,491 31,759
Finite-lived intangible
liability, net 51,194 54,663
Contingent liabilities 62,398 576
Other long-term liabilities 106,565 60,673
------- ------
Total liabilities 2,393,389 1,874,023
--------- ---------
Commitments and contingencies
Equity:
Class A common stock, $0.01 par
value per share: 500,000,000
shares authorized; 97,860,048
and 87,410,687 shares
outstanding as of December 31,
2017 and December 31, 2016,
respectively 980 875
Additional paid-in capital 1,234,846 1,145,760
Accumulated loss (112,175) (94,270)
Accumulated other comprehensive
loss (25,691) (62,367)
Treasury stock, at cost;
157,812 and 110,964 shares of
Class A common stock as of
December 31, 2017 and December
31, 2016, respectively (3,511) (2,500)
------ ------
Total equity before
noncontrolling interest 1,094,449 987,498
Noncontrolling interest 1,253,693 891,246
--------- -------
Total equity 2,348,142 1,878,744
--------- ---------
Total liabilities and equity $4,741,531 $3,752,767
========== ==========
Pattern Energy Group Inc.
Consolidated Statements of Operations
(In thousands of U.S. dollars, except per share data)
Three months ended December 31, For the year ended December 31,
2017 2016 2017 2016
---- ---- ---- ----
Revenue:
Electricity sales $107,911 $79,048 $401,888 $346,000
Other revenue 2,810 2,013 9,456 8,052
----- -----
Total revenue 110,721 81,061 411,344 354,052
------- ------ ------- -------
Cost of revenue:
Project expense 34,124 31,717 130,561 128,428
Transmission costs 7,259 146 19,472 424
Depreciation and accretion 54,007 43,708 198,644 174,490
------ ------
Total cost of revenue 95,390 75,571 348,677 303,342
Gross profit 15,331 5,490 62,667 50,710
------ ----- ------ ------
Operating expenses:
General and administrative 6,614 8,074 38,583 35,499
Related party general and
administrative 3,236 2,519 13,825 9,900
----- -----
Total operating expenses 9,850 10,593 52,408 45,399
Operating income (loss) 5,481 (5,103) 10,259 5,311
----- ------ ------ -----
Other income (expense):
Interest expense (27,688) (15,870) (102,229) (78,004)
Gain (loss) on derivatives 1,900 14,361 (9,787) (3,324)
Earnings in unconsolidated
investments, net 13,868 14,437 41,299 30,192
Early extinguishment of debt (8,643) - (8,643) -
Net income (loss) on
transactions 263 27 (1,322) (326)
Other income (expense), net (813) 234 (253) 2,531
---- ---
Total other income (expense) (21,113) 13,189 (80,935) (48,931)
------- ------ ------- -------
Net income (loss) before
income tax (15,632) 8,086 (70,676) (43,620)
Tax provision 6,257 4,641 11,734 8,679
----- ----- ------ -----
Net income (loss) (21,889) 3,445 (82,410) (52,299)
Net loss attributable to
noncontrolling interest (13,939) (10,350) (64,505) (35,188)
------- -------
Net income (loss) attributable
to Pattern Energy $(7,950) $13,795 $(17,905) $(17,111)
======= ======= ======== ========
Weighted average number of
common shares outstanding
Basic and diluted 95,149,200 87,007,714 89,179,343 79,382,388
Loss per share attributable to
Pattern Energy
Basic and diluted $(0.08) $0.16 (0.20) (0.22)
====== =====
Dividends declared per Class A
common share $0.42 $0.41 $1.67 $1.58
===== ===== ===== =====
Pattern Energy Group Inc.
Consolidated Statements of Cash Flows
(In thousands of U.S. dollars)
Three months ended December 31, For the year ended December 31,
2017 2016 2017 2016
---- ---- ---- ----
Operating activities
Net income (loss) $(21,889) $3,445 $(82,410) $(52,299)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and accretion 54,007 43,708 198,644 174,490
Amortization of financing
costs 1,992 1,726 7,871 6,968
Amortization of debt discount/
premium, net 1,204 1,079 4,583 4,226
Amortization of power purchase
agreements, net 1,074 771 3,509 3,049
(Gain) loss on derivatives (1,626) (7,518) 16,243 22,239
Stock-based compensation 1,237 1,029 5,322 5,391
Deferred taxes 5,879 4,566 15,012 8,247
Intraperiod tax allocation 87 - (3,569) -
Earnings in unconsolidated
investments, net (13,868) (14,437) (41,299) (30,192)
Distribution from
unconsolidated investments 10,837 14,638 53,930 15,015
Early extinguishment of debt 8,643 - 8,643 -
Other reconciling items 1,613 (4,514) (434) (4,470)
Changes in operating assets
and liabilities:
Funds deposited by
counterparty 3,750 3,008 13,855 (43,635)
Trade receivables (7,481) 1,718 (10,342) 7,796
Prepaid expenses 529 1,714 (2,658) 709
Other current assets (1,731) (591) (11,521) (4,300)
Other assets (non-current) (480) 514 1,977 1,379
Accounts payable and other
accrued liabilities 1,254 112 17,643 (2,546)
Counterparty deposit liability (3,750) (3,008) (13,855) 43,635
Accrued interest 9,434 6,475 5,550 458
Other current liabilities 530 65 8,570 876
Long-term liabilities 6,653 1,676 21,222 6,628
Contingent liabilities 80 117 822 -
Derivatives 305 - 305 -
--- --- --- ---
Net cash provided by operating
activities 58,283 56,293 217,613 163,664
------ ------ ------- -------
Investing activities
Cash paid for acquisitions,
net of cash and restricted
cash acquired $ - $(131,754) $(227,840) $(135,778)
Capital expenditures 518 (1,347) (43,777) (32,901)
Distribution from
unconsolidated investments 2,147 1,632 13,358 41,698
Other assets 390 1,077 7,997 2,696
Investment in Pattern
Development 2.0 (7,324) - (68,813) -
Other investing activities (3) 167 (3) 31
--- --- --- ---
Net cash used in investing
activities (4,272) (130,225) (319,078) (124,254)
------ -------- -------- --------
Financing activities
Proceeds from public offering,
net of issuance costs 214,659 (285) 237,090 286,298
Dividends paid (37,264) (35,048) (145,207) (120,207)
Capital distributions -
noncontrolling interest (6,549) (6,125) (20,250) (17,896)
Payment for financing fees (8,123) (408) (15,886) (542)
Proceeds from revolving credit
facility 10,000 155,000 333,000 175,000
Repayment of revolving credit
facility (263,000) (10,000) (513,000) (350,000)
Proceeds from long-term debt 289,340 (8,312) 693,735 -
Repayment of long-term debt (290,865) - (482,974) (47,634)
Payment for termination of
designated derivatives 316 - (14,056) -
Disposition of controlling
interest, net 57,846 - 57,846 -
Other financing activities (1,927) (1,048) (5,639) (1,682)
------ ------ ------ ------
Net cash provided by (used in)
financing activities (35,567) 93,774 124,659 (76,663)
------ ------- -------
Effect of exchange rate
changes on cash, cash
equivalents and restricted
cash 1,463 (1,418) 5,415 332
----- ------
Net change in cash, cash
equivalents and restricted
cash 19,907 18,424 28,609 (36,921)
Cash, cash equivalents and
restricted cash at beginning
of period 118,073 90,947 109,371 146,292
------- ------
Cash, cash equivalents and
restricted cash at end of
period $137,980 $109,371 $137,980 $109,371
======== ======== ======== ========
Supplemental disclosures
Cash payments for income taxes $ - $142 $335 $375
Cash payments for interest
expense $15,830 $10,494 $85,930 $69,666
Schedule of non-cash
activities
Change in property, plant and
equipment $2,071 $430 $2,071 $540
Change in additional paid-in
capital $(2,003) $ - $(2,003) $ -
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SOURCE Pattern Energy Group Inc.
