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Pattern Energy
Pattern Energy Reports First Quarter 2017 Financial Results



May 10, 2017

Pattern Energy Group Inc. (the "Company" or "Pattern Energy") (NASDAQ & TSX: PEGI) today (5/9) announced its financial results for the 2017 first quarter.

Highlights
(Comparisons made between fiscal Q1 2017 and fiscal Q1 2016 results, unless otherwise noted)

  • Proportional gigawatt hours ("GWh") sold of 2,038 GWh, up 13%
  • Net cash provided by operating activities of $43.8 million, up 197%
  • Cash available for distribution ("CAFD") of $45.1 million, up 10% and on track to meet full year guidance(1)
  • Net income of $2.5 million
  • Adjusted EBITDA of $98.2 million, up 26%
  • Revenue of $100.8 million, up 15%
  • Declared a second quarter dividend of $0.418 per Class A common share or $1.672 on an annualized basis, subsequent to
  • the end of the period, representing a 1.0% increase over the previous quarter's dividend.
  • Acquired a 272 megawatt ("MW") interest in the Broadview Wind ("Broadview") power facilities and the associated
  • independent 345 kV Western Interconnect ("Western Interconnect") transmission line from Pattern Development 1.0(1) for a
  • 9.3x multiple of the five-year average CAFD(2) starting in 2018, subsequent to the end of the quarter
  • Commenced commercial operations at Broadview in late March and as such, all 18 facilities in the Company's portfolio are
  • fully operational with a total owned capacity of 2,644 MW
  • Published a white paper outlining the business model, investment thesis and phases of renewable energy development,
  • subsequent to the end of the quarter

"Our fleet of high-quality wind assets continues to perform at a high level and production met our expectation for the quarter. As such, we are on track to achieve our CAFD target for 2017(2)," said Mike Garland, President and CEO of Pattern Energy. "With the acquisition and commencement of commercial operations at Broadview, all 18 of our projects are fully operational, providing a total owned capacity in excess of 2.6 GW. We believe significant and diverse opportunities exist to expand our portfolio on an accretive basis. Acquisitions from our identified ROFO list provide near-term opportunities to grow our CAFD per share in a manner, and at a pace, that reflects the valuation of the business and our cost of capital. The opportunity to potentially invest in the development business, through Pattern Development 2.0(1), offers us secure access to high-quality assets from a proven platform that can grow our CAFD per share in the medium and long-term. We believe that the outlook for renewable energy has never been better and we have the business model to deliver sustainable and growing returns for our shareholders."

(1) In December 2016, Pattern Energy Group LP ("Pattern Development 1.0"), formed Pattern Energy Group 2 LP ("Pattern Development 2.0")

(2) These forward looking measures of (a) 2017 full year cash available for distribution (CAFD) and (b) five-year average annual purchase price multiple of CAFD contribution from Broadview are 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 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 March 31, 2017.

Financial and Operating Results

Pattern Energy sold 2,038,159 megawatt hours ("MWh") of electricity on a proportional basis in the first quarter of 2017 compared to 1,801,034 MWh sold in the same period last year. The increase was primarily attributable to volume increases of 133,297 MWh from controlling interests in consolidated MWh due to less favorable wind conditions in the first quarter of 2016 compared to the current period and a 103,828 MWh increase from unconsolidated investments due to the acquisition of Armow in October 2016. Overall, production was at the Company's expectation for the first quarter compared to its long-term forecast.

Net cash provided by operating activities was $43.8 million for the first quarter of 2017 compared to $14.7 million for the same period last year. The $29.0 million improvement was primarily due to higher revenues of $10.7 million (excluding unrealized loss on energy derivative and amortization of power purchase agreements ("PPAs")), increased distributions from unconsolidated investments of $16.5 million and decreased project expense of $3.1 million. These increases were partially offset by a $4.1 million increase in operating expense.

Cash available for distribution was $45.1 million for the first quarter of 2017 compared to $41.0 million for the same period last year. The increase of $4.1 million, or approximately 10%, was primarily due to a $10.7 million increase in revenues (excluding unrealized loss on energy derivative and amortization of PPAs, a $3.1 million decrease in project expense, a $1.3 million decrease in distribution to noncontrolling interests, and a $0.9 million increase in total distributions from unconsolidated investment, as reported in operating and investing activities on the consolidated statements of cash flows. These increases were partially offset by increases in operating expense of $4.1 million, project reserve funding of $3.5 million, interest expense of $2.0 million and principal payments of $1.4 million.

Net income was $2.5 million in the first quarter of 2017, compared to a net loss of $29.0 million for the same period last year. The improvement of $31.6 million was primarily attributable to an increase in revenues of $13.2 million and decreases of $23.2 million in other expense and $3.1 million in project expense. These increases were partially offset by increases of $4.1 million in operating expense and $3.5 million in tax provision.

Adjusted EBITDA was $98.2 million for the first quarter of 2017 compared to $78.1 million for the same period last year. The 26% increase was primarily due to a $10.7 million increase in revenues (excluding unrealized loss on energy derivative and amortization of PPAs), a $9.6 million increase in our proportionate share of Adjusted EBITDA from unconsolidated investments, and a $3.1 million decrease in project expense. These increases were partially offset by an increase to operating expense of $4.1 million.

Click here to read the full press release.

For more information:

Organization:
Pattern Energy Group Inc.

Address:
Pier 1, Bay 3
San Francisco, California
United States, 94111
www.patternenergy.com
Tel: 415-283-4800

Contact:
Matt Dallas
Pattern Development
Tel: 917-363-1333
E-mail: matt.dallas@patternenergy.com


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