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8-K/A - 8-K/A - Clearway Energy, Inc.a15-1304_28ka.htm
EX-23.1 - EX-23.1 - Clearway Energy, Inc.a15-1304_2ex23d1.htm
EX-99.1 - EX-99.1 - Clearway Energy, Inc.a15-1304_2ex99d1.htm
EX-99.6 - EX-99.6 - Clearway Energy, Inc.a15-1304_2ex99d6.htm
EX-23.2 - EX-23.2 - Clearway Energy, Inc.a15-1304_2ex23d2.htm
EX-99.3 - EX-99.3 - Clearway Energy, Inc.a15-1304_2ex99d3.htm
EX-99.7 - EX-99.7 - Clearway Energy, Inc.a15-1304_2ex99d7.htm
EX-23.3 - EX-23.3 - Clearway Energy, Inc.a15-1304_2ex23d3.htm
EX-99.5 - EX-99.5 - Clearway Energy, Inc.a15-1304_2ex99d5.htm
EX-99.4 - EX-99.4 - Clearway Energy, Inc.a15-1304_2ex99d4.htm

Exhibit 99.2

 

LAREDO RIDGE WIND, LLC

(A Delaware Limited Liability Company)

 

Financial Statements

 

(Unaudited)

 

September 30, 2014

 



 

LAREDO RIDGE WIND, LLC

(A Delaware Limited Liability Company)

 

September 30, 2014

 

Table of Contents

 

 

 

Page

 

 

 

Financial Statements:

 

 

 

 

 

Balance Sheets

 

1

 

 

 

Statements of Operations

 

2

 

 

 

Statements of Member’s Equity

 

3

 

 

 

Statements of Cash Flows

 

4

 

 

 

Notes to Financial Statements

 

5

 



 

LAREDO RIDGE WIND, LLC

(A Delaware Limited Liability Company)

Balance Sheets

(Amounts in thousands)

 

 

 

(Successor)

 

 

(Predecessor)

 

 

 

September 30, 2014

 

 

December 31, 2013

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$

1,371

 

 

2,911

 

Accounts receivable

 

1,245

 

 

1,436

 

Inventory

 

516

 

 

455

 

Prepaid expenses and other current assets

 

602

 

 

140

 

Total current assets

 

3,734

 

 

4,942

 

 

 

 

 

 

 

 

Wind energy generating system

 

116,000

 

 

187,340

 

Accumulated depreciation

 

(2,636

)

 

(27,328

)

Plant and equipment, net

 

113,364

 

 

160,012

 

 

 

 

 

 

 

 

Deferred financing costs, net

 

 

 

3,055

 

Power purchase agreement, net of accumulated amortization of $1,235

 

52,765

 

 

 

Long-term restricted cash

 

 

 

334

 

 

 

 

 

 

 

 

Total assets

 

$

169,863

 

 

168,343

 

 

 

 

 

 

 

 

Liabilities and Member’s Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

127

 

 

326

 

Accounts payable to related parties

 

68

 

 

41

 

Accrued liabilities

 

304

 

 

182

 

Derivative liability - current

 

1,836

 

 

 

Interest payable

 

12

 

 

12

 

Current maturities of long-term obligations

 

3,251

 

 

2,922

 

Total current liabilities

 

5,598

 

 

3,483

 

 

 

 

 

 

 

 

Long-term debt

 

63,456

 

 

65,729

 

Deferred revenue, net

 

 

 

49,939

 

Long-term derivative liabilities

 

2,459

 

 

3,358

 

Asset retirement obligation

 

262

 

 

5,025

 

Total liabilities

 

71,775

 

 

127,534

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Member’s equity

 

98,088

 

 

40,809

 

 

 

 

 

 

 

 

Total liabilities and member’s equity

 

$

169,863

 

 

168,343

 

 

See accompanying notes to financial statements.

 

1



 

LAREDO RIDGE WIND, LLC

(A Delaware Limited Liability Company)

Unaudited Statements of Operations and Comprehensive Income (Loss)

(Amounts in thousands)

 

 

 

(Successor)

 

 

(Predecessor)

 

(Successor)

 

 

(Predecessor)

 

 

 

Three months ended
September 30,

 

 

Three months ended
September 30,

 

Six months ended
September 30,

 

 

Three months ended
March 31,

 

Nine months ended
September 30,

 

 

 

2014

 

 

2013

 

2014

 

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease revenue

 

$

1,636

 

 

3,327

 

5,835

 

 

4,862

 

11,852

 

Grant revenue

 

 

 

730

 

 

 

731

 

2,192

 

Total operating revenues

 

1,636

 

 

4,057

 

5,835

 

 

5,593

 

14,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and accretion

 

(177

)

 

2,417

 

2,689

 

 

2,421

 

7,250

 

Maintenance and other operating costs

 

1,020

 

 

957

 

2,013

 

 

1,081

 

2,680

 

General and administrative

 

 

 

4

 

 

 

5

 

26

 

Total operating expenses

 

843

 

 

3,378

 

4,702

 

 

3,507

 

9,956

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

793

 

 

679

 

1,133

 

 

2,086

 

4,088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(608

)

 

(1,250

)

(1,212

)

 

(1,186

)

(3,696

)

Total other expense

 

(608

)

 

(1,250

)

(1,212

)

 

(1,186

)

(3,696

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

185

 

 

(571

)

(79

)

 

900

 

392

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Comprehensive Income (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on derivatives

 

$

(1,295

)

 

232

 

(2,473

)

 

(1,682

)

4,504

 

Other comprehensive (loss) income

 

(1,295

)

 

232

 

(2,473

)

 

(1,682

)

4,504

 

Comprehensive income (loss)

 

$

(1,110

)

 

(339

)

(2,552

)

 

(782

)

4,896

 

 

See accompanying notes to financial statements.

 

2



 

LAREDO RIDGE WIND, LLC

(A Delaware Limited Liability Company)

Unaudited Statements of Member’s Equity

(Amounts in thousands)

 

 

 

Capital
Contributions

 

Capital
Distributions

 

Retained Deficit

 

Accumulated
Other
Comprehensive
Loss

 

Total Member’s
Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2013 (audited)

 

$

132,810

 

(87,697

)

(946

)

(3,358

)

40,809

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

900

 

 

900

 

Capital distribution

 

 

(1,700

)

 

 

(1,700

)

Other comprehensive loss

 

 

 

 

(1,682

)

(1,682

)

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2014 (a)

 

$

132,810

 

(89,397

)

(46

)

(5,040

)

38,327

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at April 1, 2014 (a)

 

$

102,857

 

 

 

 

102,857

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

(79

)

 

(79

)

Capital distribution

 

 

(3,395

)

 

 

(3,395

)

Other comprehensive loss

 

 

 

 

(1,295

)

(1,295

)

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2014

 

$

102,857

 

(3,395

)

(79

)

(1,295

)

98,088

 

 


(a) The differences in the equity balances at March 31, and April1, 2014 reflect the application of pushdown accounting as result of the EME Acquisition.

 

See accompanying notes to financial statements.

 

3



 

LAREDO RIDGE WIND, LLC

(A Delaware Limited Liability Company)

Unaudited Statements of Cash Flows

(Amounts in thousands)

 

 

 

(Successor)

 

 

(Predecessor)

 

 

 

Six months ended
September 30,

 

 

Three months ended
March 31,

 

Nine months ended
September 30,

 

 

 

2014

 

 

2014

 

2013

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(79

)

 

900

 

392

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation, amortization, and accretion

 

3,924

 

 

2,523

 

7,567

 

Amortization of deferred revenue

 

 

 

(731

)

(2,192

)

Changes in derivative instruments

 

(988

)

 

 

 

Changes in assets and liabilities

 

 

 

 

 

 

 

 

Accounts receivable

 

414

 

 

(223

)

(20

)

Inventory

 

(38

)

 

(24

)

23

 

Prepaid expenses and other current assets

 

(210

)

 

(252

)

(155

)

Accounts payable

 

(82

)

 

(90

)

(508

)

Accrued liabilities

 

189

 

 

(67

)

(31

)

Interest payable

 

 

 

 

 

Net cash provided by operating activities

 

3,130

 

 

2,036

 

5,076

 

 

 

 

 

 

 

 

 

 

Cash from investing activity

 

 

 

 

 

 

 

 

Decrease in restricted cash

 

 

 

334

 

 

Net cash provided by investing activity

 

 

 

334

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Distributions to member

 

(4,595

)

 

(1,701

)

(4,033

)

Repayment of long-term debt

 

(881

)

 

(1,063

)

(1,790

)

Net cash used in financing activities

 

(5,476

)

 

(2,764

)

(5,823

)

 

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

(2,346

)

 

(394

)

(747

)

Cash at beginning of period

 

2,517

 

 

2,911

 

2,735

 

Cash at end of period

 

$

171

 

 

2,517

 

1,988

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

2,200

 

 

1,083

 

3,308

 

 

See accompanying notes to financial statements.

 

4



 

LAREDO RIDGE WIND, LLC

(A Delaware Limited Liability Company)

 

Notes to Unaudited Financial Statements

 

September 30, 2014

 

(1)                     Nature of Business

 

Laredo Ridge Wind, LLC (the Company), a Delaware limited liability company, is a wholly owned subsidiary of Mission Wind Laredo, Inc. (MWL), a wholly owned subsidiary of NRG Wind LLC (NRG Wind), a wholly owned subsidiary of NRG Energy Gas and Wind Holdings LLC, in turn a wholly owned subsidiary of NRG Energy, Inc. (NRG or Parent).

 

The Company, along with NRG Wind, was originally a wholly owned subsidiary of Edison Mission Energy, Inc. (EME) and was formed to construct, own, and operate a 79.9-megawatt (MW) wind powered electricity-generating system composed of 54 General Electric Company (GE) 1.5 MW generators, a power collection system, and power substation (the Windsystem) located in Boone County, Nebraska. The Company sells electricity generated by the turbines to Nebraska Public Power District (NPPD) pursuant to a power purchase agreement (PPA) with a term extending for 20 years from the commercial operation date of February 1, 2011.

 

The Company contracted with General Electric International, Inc. (GE) to provide certain warranty, maintenance, and repair services. The agreement, including extensions, covers a five-year period, which commenced at turbine completion in November 2010.

 

The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to the Company’s annual financial statements. Interim results are not necessarily indicative of results for a full year.

 

Predecessor and Successor Reporting

 

As further discussed in note 2, Business Acquisition, on April 1, 2014, NRG completed the acquisition of substantially all of the assets of EME, or the EME Acquisition, including its member interests in the Company. The EME Acquisition was accounted for under the acquisition method of accounting. Fair value adjustments have been pushed down to the Company, resulting in the Company’s assets and liabilities being recorded at fair value at April 1, 2014. In addition, effective with the EME Acquisition, the Company adopted the accounting policies of NRG. Therefore, the Company’s financial information prior to the EME Acquisition is not comparable to its financial information subsequent to the EME Acquisition.

 

As a result of the impact of pushdown accounting, the financial statements and certain note presentations separate the Company’s presentations into two distinct periods, the period before the consummation of the EME Acquisition (labeled predecessor) and the period after that date (labeled successor), to indicate the application of different basis of accounting between the periods presented.

 

(2)                     Business Acquisition

 

On April 1, 2014, NRG completed the acquisition of substantially all of the assets of EME. The acquisition was recorded as a business combination under ASC 805, Business Combinations, with identifiable assets acquired and liabilities assumed recorded at their estimated fair values on the acquisition date. The impact of the acquisition method of accounting was pushed down to the Company, resulting in assets and liabilities of the Company being recorded at fair value as of April 1, 2014.  The initial accounting for the business combination is not complete because the evaluation necessary to assess the fair values of certain

 

5



 

assets acquired is still in process.  The provisional amounts are subject to revision until the evaluations are completed to the extent that additional information is obtained about the facts and circumstances that exists as of the acquisition date.

 

The preliminary allocation of assets and liabilities is as follows (in thousands):

 

 

 

Acquisition Date

 

 

 

Fair Value

 

Assets

 

 

 

Current and non-current assets

 

$

5,046

 

Net plant and equipment

 

116,000

 

Power purchase agreement

 

54,000

 

Total assets acquired

 

$

175,046

 

 

 

 

 

Liabilities

 

 

 

Current and non-current liabilities

 

4,601

 

Long-term debt

 

67,588

 

Total liabilties assumed

 

$

72,189

 

 

 

 

 

Net assets acquired

 

$

102,857

 

 

Fair Value Measurements

 

The fair values of the property, plant and equipment and intangible assets at the acquisition date were measured primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement as defined in ASC 820.  Significant inputs were as follows:

 

Property, plant and equipment — The estimated fair values were determined primarily based on an income method using discounted cash flows and validated using a market approach based on recent transactions of comparable assets.  The income approach was primarily relied upon as the forecasted cash flows more appropriately incorporate differences in regional markets, plant types, age, useful life, equipment condition and environmental controls of each asset. The income approach also allows for a more accurate reflection of current and expected market dynamics such as supply and demand, commodity prices and regulatory environment as of the acquisition date.

 

Power purchase agreement — The fair value of the PPA acquired was determined utilizing a variation of the income approach where the expected future cash flows resulting from the acquired PPA was reduced by operating costs and charges for contributory assets and then discounted to present value at the weighted average cost of capital of an integrated utility peer group adjusted for project-specific financing attributes.  The values were corroborated with available market data.  The PPA will be amortized over a term of 17 years.

6



 

(3)                     Derivative Instruments and Hedging Activity

 

The Company has fixed for floating interest rate swaps for 90% of its outstanding term loan amount.  The notional amount of the swaps was approximately $60,407,000 as of September 30, 2014. The following table summarizes the effects of the swaps on the Company’s accumulated OCI balance, which reflects the change in the fair value of the swaps (amounts in thousands):

 

Accumulated OCI balance as of April 1, 2014

 

$

 

 

 

 

 

Mark-to-market of cash flow hedge accounting contracts

 

(1,295

)

 

 

 

 

Accumulated OCI balance as of September 30, 2014

 

$

(1,295

)

 

(4)                     Subsequent events

 

These financial statements and notes reflect the Company’s evaluation of events occurring subsequent to the balance sheet date through January 16, 2015, the date that the financial statements are available to be issued.

 

7