Pattern Reports Third Quarter 2013 Financial Results

Pattern Reports Third Quarter 2013 Financial Results

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  Three Months  Nine Months   Nine Months
                      Ended         Ended         Ended         Ended
                       September 30, September 30, September 30, September 30,
                       2013          2012          2013          2012
                      (U.S. dollars in thousands)
Net income (loss)      $4,244      $(16,913)   $29,450     $(8,921)
Plus:                                                         
Interest expense, net  14,260       8,817        45,932       24,513
of interest income
Tax provision          595          243          (6,801)      1,247
(benefit)
Depreciation and       21,194       12,815       61,758       34,551
accretion
EBITDA                 $40,293     $4,962      $130,339    $51,390
Unrealized (gain) loss (6,659)      8,690        5,222        6,944
on energy derivative
Unrealized (gain) loss
on interest rate       (776)        (63)         (10,909)     32
derivatives
Realized loss on
interest rate          1,059        --          1,059        --
derivatives
Gain on transactions   --          --          (7,200)      (4,173)
Plus, our
proportionate share in
the following from our                                        
equity accounted
investments:
Interest expense, net  91            --          39           --
of interest income
Tax (benefit)          (36)          1             (84)         57
provision
Depreciation and       3             --          14           --
accretion
Unrealized gain on
interest rate and      (2,143)       (212)         (6,091)      (194)
currency derivatives
Realized loss (gain)
on interest rate and   118           34            (35)         38
currency derivatives
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 Three Months Nine Months Nine Months
                            Ended        Ended        Ended       Ended
                             September    September    September   September
                             30, 2013     30, 2012     30, 2013    30, 2012
                            (U.S. dollars in thousands)
                                                               
Net cash provided by         $26,739    $5,696     $68,398   $30,507
operating activities
Changes in current operating (8,753)     (709)       3,004      (74)
assets and liabilities
Network upgrade              618         618         1,236      5,027
reimbursement
Use of operating cash to
fund maintenance and debt    --         --         --        (525)
reserves
Operations and
maintenancecapital          (56)        (350)       (431)      (604)
expenditures
Less:                                                           
Distributions to             (258)       --         (1,426)    (1,054)
noncontrolling interests
Principal payments paid from (11,973)    (4,018)     (33,788)   (21,190)
operating cash flows ^(1)
Cash available for           $6,317     $1,237     $36,993   $12,087
distribution
                                                               
^(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        1,506,029      1,668,302
$100,247 in 2013 and 2012, respectively
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  37,240         42,654
2012, respectively
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   Nine Months ended September
                              September 30,        30,
                             2013      2012       2013          2012
Revenue:                                                      
Electricity sales             $37,950 $22,285  $130,533    $72,160
Energy derivative             2,656    3,308     12,873       14,967
settlements
Unrealized gain (loss) on     6,659    (8,690)   (5,222)      (6,944)
energy derivative
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     3,607    2,836     8,968        7,587
administrative
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         1,845    117       5,188        13
unconsolidated investments
Interest rate derivative      (1,059)  --       (1,059)      --
settlements
Unrealized gain (loss) on     776      63        10,909       (32)
derivatives
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      4,839    (16,670)  22,649       (7,674)
income tax
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               3,248    (7,494)   (690)        (5,943)
noncontrolling interest
Net income (loss)
attributable to controlling   $996    $(9,419) $30,140     $(2,978)
interest
                                                             
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         (5,188)         (13)
investments
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           4,862           (931)
liabilities
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    14,254          4,173
credits
Decrease in restricted cash - interconnect   63,732          441
and PPA security
Increase in restricted cash - interconnect   (80,567)        (844)
and PPA security
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     102,553         (422,219)
activities
                                                            
Financing activities                                         
Capital contributions - controlling interest 32,677          234,787
Capital distributions - controlling interest (98,886)        (25,779)
Capital distributions - noncontrolling       (1,426)         (1,054)
interest
Decrease in restricted cash - debt service   116,654         8,773
reserves
Increase in restricted cash - debt service   (126,475)       (15,209)
reserves
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     (38,469)        375,141
activities
                                                            
Effect of exchange rate changes on cash and  (966)           748
cash equivalents
Net change in cash and cash equivalents      132,482         (16,571)
Cash and cash equivalents at beginning of    17,573          47,672
period
Cash and cash equivalents at end of period   $149,089       $31,849
                                                            
Supplemental disclosure                                      
Cash payments for interest and commitment    $45,178        $29,351
fees
Schedule of non-cash activities                              
Change in fair value of interest rate swaps  38,266          (10,216)
Change in fair value of contingent           8,001           (314)
liabilities
Amortization of deferred financing costs -   175             2,429
included as construction in progress
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 49,275          --
joint venture
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

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