PATTERN ENERGY GROUP INC. (NASDAQ:PEGI) Files An 8-K Results of Operations and Financial Condition
Item 2.02. Results of Operations and Financial Condition.
On March 1, 2017, we issued a press release announcing our
financial results for the fourth quarter and for the year ended
December 31, 2016. A copy of our press release is attached hereto
as Exhibit 99.1 and is incorporated herein by reference. This
information is furnished to Item 2.02 and shall not be deemed filed
for any purpose, including for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act), or
otherwise subject to the liabilities of that Section. The
information in this Current Report on Form 8-K shall not be deemed
incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Exchange Act regardless of any general
incorporation language in such filing.
financial results for the fourth quarter and for the year ended
December 31, 2016. A copy of our press release is attached hereto
as Exhibit 99.1 and is incorporated herein by reference. This
information is furnished to Item 2.02 and shall not be deemed filed
for any purpose, including for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act), or
otherwise subject to the liabilities of that Section. The
information in this Current Report on Form 8-K shall not be deemed
incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Exchange Act regardless of any general
incorporation language in such filing.
Our press release, included herein, makes reference to non-U.S.
GAAP financial measures, which management believes are useful for
investors by offering the ability to better evaluate operating
performance and to better understand how management evaluates the
business. These non-U.S. GAAP financial measures are not prepared
in accordance with, and should not be considered in isolation of,
or as an alternative to, measurements required by U.S. GAAP.
Descriptions of the non-U.S. GAAP financial measures are discussed
below.
GAAP financial measures, which management believes are useful for
investors by offering the ability to better evaluate operating
performance and to better understand how management evaluates the
business. These non-U.S. GAAP financial measures are not prepared
in accordance with, and should not be considered in isolation of,
or as an alternative to, measurements required by U.S. GAAP.
Descriptions of the non-U.S. GAAP financial measures are discussed
below.
We define cash available for distribution as net cash provided by
operating activities as adjusted for certain other cash flow items
that we associate with our operations. Cash available for
distribution represents 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 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, (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, (vi) add cash distributions received from
unconsolidated investments, to the extent such distributions were
derived from operating cash flows and (vii) add or subtract other
items as necessary to present the cash flows we deem representative
of our core business operations.
operating activities as adjusted for certain other cash flow items
that we associate with our operations. Cash available for
distribution represents 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 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, (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, (vi) add cash distributions received from
unconsolidated investments, to the extent such distributions were
derived from operating cash flows and (vii) add or subtract other
items as necessary to present the cash flows we deem representative
of our core business operations.
We disclose cash available for distribution because management
recognizes that it will be used as a supplemental measure by
investors and analysts to evaluate our liquidity. However, cash
available for distribution has limitations as an analytical tool
because it excludes depreciation, amortization and accretion, does
not capture the level of capital expenditures necessary to maintain
the operating performance of our projects, is not reduced for
principal payments on our project indebtedness except to the extent
they are paid from operating cash flows during a period, and
excludes the effect of certain other cash flow items, all of which
could have a material effect on our financial condition and results
from operations. Cash available for distribution is a non-U.S. GAAP
measure and should not be considered an alternative to net cash
provided by operating activities or any other liquidity measure
determined in accordance with U.S. GAAP, nor is it indicative of
funds available to fund our cash needs. In addition, our
calculation of cash available for distribution is not necessarily
comparable to cash available for distribution as calculated by
other companies.
recognizes that it will be used as a supplemental measure by
investors and analysts to evaluate our liquidity. However, cash
available for distribution has limitations as an analytical tool
because it excludes depreciation, amortization and accretion, does
not capture the level of capital expenditures necessary to maintain
the operating performance of our projects, is not reduced for
principal payments on our project indebtedness except to the extent
they are paid from operating cash flows during a period, and
excludes the effect of certain other cash flow items, all of which
could have a material effect on our financial condition and results
from operations. Cash available for distribution is a non-U.S. GAAP
measure and should not be considered an alternative to net cash
provided by operating activities or any other liquidity measure
determined in accordance with U.S. GAAP, nor is it indicative of
funds available to fund our cash needs. In addition, our
calculation of cash available for distribution is not necessarily
comparable to cash available for distribution as calculated by
other companies.
We define Adjusted EBITDA as net income (loss) before net interest
expense, income taxes and depreciation, amortization and accretion,
including our proportionate share of net interest expense, income
taxes and depreciation, amortization and accretion of
unconsolidated investments.. Adjusted EBITDA also excludes the
effect of certain mark-to-market adjustments and infrequent items
not related to normal or ongoing operations, such as early payment
of debt, realized derivative gain or loss from refinancing
transactions, gain or loss related to acquisitions or divestitures,
and adjustments from unconsolidated investments. In calculating
Adjusted EBITDA, we exclude mark-to-market adjustments to the value
of our derivatives because we believe that it is useful for
investors to understand, as a supplement to net income (loss) and
other traditional measures of operating results, the results of our
operations without regard to periodic, and sometimes material,
fluctuations in the market value of such assets or liabilities.
expense, income taxes and depreciation, amortization and accretion,
including our proportionate share of net interest expense, income
taxes and depreciation, amortization and accretion of
unconsolidated investments.. Adjusted EBITDA also excludes the
effect of certain mark-to-market adjustments and infrequent items
not related to normal or ongoing operations, such as early payment
of debt, realized derivative gain or loss from refinancing
transactions, gain or loss related to acquisitions or divestitures,
and adjustments from unconsolidated investments. In calculating
Adjusted EBITDA, we exclude mark-to-market adjustments to the value
of our derivatives because we believe that it is useful for
investors to understand, as a supplement to net income (loss) and
other traditional measures of operating results, the results of our
operations without regard to periodic, and sometimes material,
fluctuations in the market value of such assets or liabilities.
During the year ended December 31, 2016, our equity method balances
for South Kent and Grand were zero. In accordance with ASC 323,
Investments – Equity Method and Joint Ventures, we suspended
recognition of South Kent’s and Grand’s equity method earnings or
losses and accumulated other comprehensive income (loss), until the
fourth quarter of 2016 when South Kent’s and Grand’s cumulative
equity method earnings and other comprehensive income exceeded
cumulative distributions received, cumulative equity method losses
and, where applicable, cumulative other comprehensive income (loss)
during the suspension period. As we have no explicit or implicit
commitment to fund losses at the unconsolidated investments, we
have recorded gains resulting from distributions received in excess
of the carrying amount of our unconsolidated investments. Our
definition of Adjusted EBITDA has accordingly been modified for
periods where equity method accounting was suspended to include
adjustments (gains on distributions and suspended equity losses)
from unconsolidated investments.
for South Kent and Grand were zero. In accordance with ASC 323,
Investments – Equity Method and Joint Ventures, we suspended
recognition of South Kent’s and Grand’s equity method earnings or
losses and accumulated other comprehensive income (loss), until the
fourth quarter of 2016 when South Kent’s and Grand’s cumulative
equity method earnings and other comprehensive income exceeded
cumulative distributions received, cumulative equity method losses
and, where applicable, cumulative other comprehensive income (loss)
during the suspension period. As we have no explicit or implicit
commitment to fund losses at the unconsolidated investments, we
have recorded gains resulting from distributions received in excess
of the carrying amount of our unconsolidated investments. Our
definition of Adjusted EBITDA has accordingly been modified for
periods where equity method accounting was suspended to include
adjustments (gains on distributions and suspended equity losses)
from unconsolidated investments.
We disclose Adjusted EBITDA, which is a non-U.S. GAAP measure,
because management believes this metric assists investors and
analysts in comparing our operating performance across reporting
periods on a consistent basis by excluding items that our
management believes are not indicative of our core operating
performance. We use Adjusted EBITDA to evaluate our operating
because management believes this metric assists investors and
analysts in comparing our operating performance across reporting
periods on a consistent basis by excluding items that our
management believes are not indicative of our core operating
performance. We use Adjusted EBITDA to evaluate our operating
performance. You should not consider Adjusted EBITDA as an
alternative to net income (loss), determined in accordance with
U.S. GAAP.
alternative to net income (loss), determined in accordance with
U.S. GAAP.
Adjusted EBITDA has limitations as an analytical tool. Some of
these limitations are:
these limitations are:
|
|
Adjusted EBITDA
|
|
|
does not reflect our cash expenditures or future requirements
for capital expenditures or contractual commitments; |
|
|
does not reflect changes in, or cash requirements for, our
working capital needs; |
|
|
does not reflect the significant interest expense, or the
cash requirements necessary to service interest or principal payments, on our debt, or our proportional interest in the interest expense of our unconsolidated investments or the cash requirements necessary to service interest or principal payments on the debt borne by our unconsolidated investments; |
|
|
does not reflect our income taxes or the cash requirement to
pay our taxes; or our proportional interest in income taxes of our unconsolidated investments or the cash requirements necessary to pay the taxes of our unconsolidated investments; |
|
|
does not reflect depreciation, amortization and accretion
which are non-cash charges; or our proportional interest in depreciation, amortization and accretion of our unconsolidated investments. The assets being depreciated, amortized and accreted will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and |
|
|
does not reflect the effect of certain mark-to-market
adjustments and non-recurring items or our proportional interest in the mark-to-market adjustments at our unconsolidated investments. |
|
|
We do not have control, nor have any legal claim to the
portion of the unconsolidated investees’ revenues and expenses allocable to our joint venture partners. As we do not control, but do exercise significant influence, we account for the unconsolidated investments in accordance with the equity method of accounting. Net earnings (losses) from these investments are reflected within our consolidated statements of operations in “Earnings (loss) in unconsolidated investments, net”. Adjustments related to our proportionate share from unconsolidated investments include only our proportionate amounts of interest expense, income taxes, depreciation, amortization and accretion, and mark-to-market adjustments included in “Earnings (loss) in unconsolidated investments, net;” and |
|
|
Other companies in our industry may calculate Adjusted EBITDA
differently than we do, limiting its usefulness as a comparative measure. |
Because of these limitations, Adjusted EBITDA should not be
considered in isolation or as a substitute for performance
measures calculated in accordance with U.S. GAAP.
considered in isolation or as a substitute for performance
measures calculated in accordance with U.S. GAAP.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
|
Exhibit
Number
|
Description
|
|
99.1
|
Press Release issued by Pattern Energy Group Inc. on
March 1, 2017. |
About PATTERN ENERGY GROUP INC. (NASDAQ:PEGI)
Pattern Energy Group Inc. is an independent power company focused on owning and operating power projects. The Company holds interests in over 18 wind power projects located in the United States, Canada and Chile with total capacity of over 2,644 megawatts (MW). Each of its projects has contracted to sell its output pursuant to a power sale agreement. The Company sells its electricity and environmental attributes, including renewable energy credits (RECs), to local utilities under long-term and fixed-price power purchase agreements (PPAs). The Company’s operating projects are Gulf Wind, Texas; Hatchet Ridge, California; St. Joseph, Manitoba; Spring Valley, Nevada; Santa Isabel, Puerto Rico; Ocotillo, California; South Kent, Ontario; El Arrayan, Chile; Panhandle 1, Texas; Panhandle 2, Texas; Grand, Ontario; Post Rock, Kansas; Lost Creek, Missouri; K2, Ontario; Logan’s Gap, Texas, Amazon Wind Farm Fowler Ridge, Indiana, and Armow Wind power facility in Ontario, Canada. PATTERN ENERGY GROUP INC. (NASDAQ:PEGI) Recent Trading Information
PATTERN ENERGY GROUP INC. (NASDAQ:PEGI) closed its last trading session down -0.92 at 19.87 with 889,887 shares trading hands.
