Attached files
| file | filename |
|---|---|
| 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-23.2 - EX-23.2 - Clearway Energy, Inc. | a15-1304_2ex23d2.htm |
| EX-99.2 - EX-99.2 - Clearway Energy, Inc. | a15-1304_2ex99d2.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 99.6
TAPESTRY WIND, LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
Consolidated Financial Statements
(Unaudited)
September 30, 2014
TAPESTRY WIND, LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
September 30, 2014
Table of Contents
|
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Page(s) |
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|
|
|
Consolidated Financial Statements: |
|
|
|
|
|
|
|
Consolidated Balance Sheets |
|
1 |
|
|
|
|
|
Consolidated Statements of Operations |
|
2 |
|
|
|
|
|
Consolidated Statements of Member’s Equity |
|
3 |
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|
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|
Consolidated Statements of Cash Flows |
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4 |
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|
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Notes to Consolidated Financial Statements |
|
5 – 7 |
Tapestry Wind, LLC
(A Delaware Limited Liability Company)
Consolidated Balance Sheets
(Amounts in thousands)
|
|
|
(Successor) |
|
|
(Predecessor) |
| ||
|
|
|
September 30, 2014 |
|
|
December 31, 2013 |
| ||
|
|
|
(Unaudited) |
|
|
|
| ||
|
Assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
|
Current assets: |
|
|
|
|
|
| ||
|
Cash |
|
$ |
6,207 |
|
|
$ |
3,968 |
|
|
Accounts receivable |
|
2,030 |
|
|
3,963 |
| ||
|
Accounts receivable from related parties |
|
13 |
|
|
— |
| ||
|
Inventory |
|
5,870 |
|
|
82 |
| ||
|
Prepaid expenses and other current assets |
|
263 |
|
|
424 |
| ||
|
Total current assets |
|
14,383 |
|
|
8,437 |
| ||
|
|
|
|
|
|
|
| ||
|
Property, plant and equipment |
|
280,000 |
|
|
450,727 |
| ||
|
Accumulated depreciation |
|
(6,607 |
) |
|
(56,947 |
) | ||
|
Net plant and equipment |
|
273,393 |
|
|
393,780 |
| ||
|
|
|
|
|
|
|
| ||
|
Inventory deposits |
|
— |
|
|
5,640 |
| ||
|
Deferred financing costs, net |
|
— |
|
|
6,667 |
| ||
|
Power purchase agreements, net of accumulated amortization of $1,324 |
|
65,676 |
|
|
— |
| ||
|
Restricted cash long-term |
|
— |
|
|
9 |
| ||
|
Long-term derivative assets |
|
3,302 |
|
|
4,457 |
| ||
|
|
|
|
|
|
|
| ||
|
Total assets |
|
$ |
356,754 |
|
|
$ |
418,990 |
|
|
|
|
|
|
|
|
| ||
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Liabilities & Member’s Equity |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
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Current liabilities: |
|
|
|
|
|
| ||
|
Accounts payable |
|
$ |
765 |
|
|
$ |
2,555 |
|
|
Accounts payable to related parties |
|
270 |
|
|
148 |
| ||
|
Accrued liabilities |
|
1,073 |
|
|
845 |
| ||
|
Derivative liability - current |
|
3,204 |
|
|
— |
| ||
|
Interest payable |
|
28 |
|
|
27 |
| ||
|
Current maturities of long-term obligations |
|
10,438 |
|
|
9,812 |
| ||
|
Total current liabilities |
|
15,778 |
|
|
13,387 |
| ||
|
|
|
|
|
|
|
| ||
|
Long-term debt, net of current portion |
|
184,307 |
|
|
191,523 |
| ||
|
Deferred revenue, net |
|
— |
|
|
109,745 |
| ||
|
Asset retirement obligation |
|
416 |
|
|
8,088 |
| ||
|
Total liabilities |
|
200,501 |
|
|
322,743 |
| ||
|
|
|
|
|
|
|
| ||
|
Commitments and contingencies |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
|
Member’s equity |
|
156,253 |
|
|
96,247 |
| ||
|
|
|
|
|
|
|
| ||
|
Total liabilities and member’s equity |
|
$ |
356,754 |
|
|
$ |
418,990 |
|
See accompanying notes to financial statements.
Tapestry Wind, LLC
(A Delaware Limited Liability Company)
Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)
(Amounts in thousands)
|
|
|
(Successor) |
|
|
(Predecesor) |
|
(Successor) |
|
|
(Predecesor) |
|
(Predecesor) |
| |||||
|
|
|
Three months ended |
|
|
Three months ended |
|
Six months ended |
|
|
Three months ended |
|
Nine months ended |
| |||||
|
|
|
2014 |
|
|
2013 |
|
2014 |
|
|
2014 |
|
2013 |
| |||||
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
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|
| |||||
|
|
|
|
|
|
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|
|
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|
| |||||
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Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Electric revenue |
|
$ |
13,374 |
|
|
$ |
1,937 |
|
$ |
16,277 |
|
|
$ |
4,852 |
|
$ |
10,690 |
|
|
Lease and other revenue |
|
(6,850 |
) |
|
4,759 |
|
28 |
|
|
8,920 |
|
18,917 |
| |||||
|
Power purchase agreement amortization |
|
(1,324 |
) |
|
— |
|
(1,324 |
) |
|
— |
|
— |
| |||||
|
Operating revenues from marketing affiliate |
|
(12 |
) |
|
(47 |
) |
(24 |
) |
|
(108 |
) |
(64 |
) | |||||
|
Grant revenue |
|
— |
|
|
1,552 |
|
— |
|
|
1,552 |
|
4,656 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total operating revenues |
|
5,188 |
|
|
8,201 |
|
14,957 |
|
|
15,216 |
|
34,199 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Depreciation and accretion |
|
1,649 |
|
|
5,763 |
|
6,691 |
|
|
5,768 |
|
17,276 |
| |||||
|
Maintenance and other operating costs |
|
2,321 |
|
|
2,254 |
|
4,595 |
|
|
2,273 |
|
6,597 |
| |||||
|
General and administrative |
|
— |
|
|
45 |
|
— |
|
|
170 |
|
315 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total operating expenses |
|
3,970 |
|
|
8,062 |
|
11,286 |
|
|
8,211 |
|
24,188 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Income from operations |
|
1,218 |
|
|
139 |
|
3,671 |
|
|
7,005 |
|
10,011 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest income |
|
2 |
|
|
— |
|
3 |
|
|
— |
|
1 |
| |||||
|
Interest expense |
|
(1,526 |
) |
|
(2,811 |
) |
(3,039 |
) |
|
(2,701 |
) |
(8,427 |
) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Total other income (expense) |
|
(1,524 |
) |
|
(2,811 |
) |
(3,036 |
) |
|
(2,701 |
) |
(8,426 |
) | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net income (loss) |
|
$ |
(306 |
) |
|
$ |
(2,672 |
) |
$ |
635 |
|
|
$ |
4,304 |
|
$ |
1,585 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Other Comprehensive Income (Loss): |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Unrealized (loss) gain on derivatives |
|
$ |
(4,237 |
) |
|
$ |
328 |
|
$ |
(7,950 |
) |
|
$ |
(2,510 |
) |
$ |
12,073 |
|
|
Other comprehensive (loss) income |
|
(4,237 |
) |
|
328 |
|
(7,950 |
) |
|
(2,510 |
) |
12,073 |
| |||||
|
Comprehensive (loss) income |
|
$ |
(4,543 |
) |
|
$ |
(2,344 |
) |
$ |
(7,315 |
) |
|
$ |
1,794 |
|
$ |
13,658 |
|
See accompanying notes to financial statements.
Tapestry Wind, LLC
(A Delaware Limited Liability Company)
Unaudited Consolidated Statements of Member’s Equity
(Amounts in thousands)
|
|
|
Capital |
|
Capital |
|
Retained |
|
Accumulated |
|
Purchase Non- |
|
Total Member’s |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Balance at December 31, 2013 (audited) |
|
$ |
447,139 |
|
$ |
(347,959 |
) |
$ |
(2,587 |
) |
$ |
4,457 |
|
$ |
(4,803 |
) |
$ |
96,247 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Distributions to member |
|
— |
|
(1,100 |
) |
— |
|
— |
|
— |
|
(1,100 |
) | ||||||
|
Net income |
|
— |
|
— |
|
4,304 |
|
— |
|
— |
|
4,304 |
| ||||||
|
Other comprehensive loss |
|
— |
|
— |
|
— |
|
(2,510 |
) |
— |
|
(2,510 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Balance at March 31, 2014 (a) |
|
$ |
447,139 |
|
$ |
(349,059 |
) |
$ |
1,717 |
|
$ |
1,947 |
|
$ |
(4,803 |
) |
$ |
96,941 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Balance at April 1, 2014 (a) |
|
$ |
166,114 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
166,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Distributions to member |
|
— |
|
(6,259 |
) |
— |
|
— |
|
— |
|
(6,259 |
) | ||||||
|
Net loss |
|
— |
|
— |
|
635 |
|
— |
|
— |
|
635 |
| ||||||
|
Other comprehensive loss |
|
— |
|
— |
|
— |
|
(4,237 |
) |
— |
|
(4,237 |
) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Balance at September 30, 2014 |
|
$ |
166,114 |
|
$ |
(6,259 |
) |
$ |
635 |
|
$ |
(4,237 |
) |
$ |
— |
|
$ |
156,253 |
|
(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.
Tapestry Wind, LLC
(A Delaware Limited Liability Company)
Unaudited Consolidated Statements of Cash Flows
(Amounts in thousands)
|
|
|
(Successor) |
|
|
(Predecessor) |
| |||||
|
|
|
Six months ended |
|
|
Three months ended |
|
Nine months ended |
| |||
|
|
|
2014 |
|
|
2014 |
|
2013 |
| |||
|
|
|
|
|
|
|
|
|
| |||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
| |||
|
Net income |
|
$ |
635 |
|
|
$ |
4,304 |
|
$ |
1,585 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
| |||
|
Depreciation, amortization and accretion |
|
8,015 |
|
|
6,054 |
|
18,172 |
| |||
|
Amortization of deferred revenue |
|
— |
|
|
(1,552 |
) |
(4,656 |
) | |||
|
Changes in derivative instruments |
|
(1,772 |
) |
|
— |
|
— |
| |||
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
| |||
|
Accounts receivable |
|
4,771 |
|
|
(2,851 |
) |
1,821 |
| |||
|
Inventory deposits |
|
— |
|
|
(148 |
) |
(3,505 |
) | |||
|
Prepaid expenses and other current assets |
|
(18 |
) |
|
179 |
|
105 |
| |||
|
Accounts payable |
|
(80 |
) |
|
(1,588 |
) |
620 |
| |||
|
Accrued liabilities |
|
33 |
|
|
195 |
|
(376 |
) | |||
|
Interest payable |
|
2 |
|
|
(1 |
) |
(1 |
) | |||
|
Net cash provided by operating activities |
|
11,586 |
|
|
4,592 |
|
13,765 |
| |||
|
|
|
|
|
|
|
|
|
| |||
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
| |||
|
Capital expenditures |
|
— |
|
|
— |
|
(876 |
) | |||
|
Restricted cash |
|
— |
|
|
9 |
|
— |
| |||
|
Net cash provided by investing activities |
|
— |
|
|
9 |
|
(876 |
) | |||
|
|
|
|
|
|
|
|
|
| |||
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
| |||
|
Member’s distributions |
|
(7,259 |
) |
|
(1,100 |
) |
(8,692 |
) | |||
|
Repayment of long-term debt |
|
(3,218 |
) |
|
(3,371 |
) |
(5,316 |
) | |||
|
Net cash used in financing activities |
|
(10,477 |
) |
|
(4,471 |
) |
(14,008 |
) | |||
|
|
|
|
|
|
|
|
|
| |||
|
Net increase (decrease) in cash and cash equivalents |
|
1,109 |
|
|
130 |
|
(1,119 |
) | |||
|
Cash at beginning of period |
|
4,098 |
|
|
3,968 |
|
6,450 |
| |||
|
|
|
|
|
|
|
|
|
| |||
|
Cash at end of period |
|
$ |
5,207 |
|
|
$ |
4,098 |
|
$ |
5,331 |
|
|
|
|
|
|
|
|
|
|
| |||
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
| |||
|
Cash paid for interest |
|
$ |
4,809 |
|
|
$ |
2,414 |
|
$ |
7,530 |
|
See accompanying notes to financial statements.
TAPESTRY WIND, LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
Notes to Unaudited Consolidated Financial Statements
September 30, 2014
(1) The Company
(a) Formation
Tapestry Wind, LLC (Tapestry), a Delaware limited liability company, was formed on September 26, 2011 in anticipation of issuing debt in 2012 based on future cash flows from a portfolio of wind projects. Tapestry is a wholly owned subsidiary of NRG Wind LLC. (NRG Wind), is 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).
Tapestry, along with NRG Wind, was originally a wholly owned subsidiary of Edison Mission Energy, Inc. (EME), Tapestry received, as capital contributions, ownership interest in the three wind projects described below: Taloga Wind, Pinnacle Wind, and Buffalo Bear. Tapestry and its subsidiaries are referred to herein as the “Company.”
(b) Description of Projects
Taloga
Tapestry owns a 100% interest in Taloga Wind, LLC (Taloga), which owns a 129.6-megawatt wind farm located in Dewey County, Oklahoma. The project sells electricity to Oklahoma Gas and Electric Company under a 20-year power purchase agreement (PPA). The project achieved commercial operation in July 2011.
Pinnacle
Tapestry owns a 100% interest in Pinnacle Wind, LLC (Pinnacle), which owns a 55.2-megawatt wind farm located in Mineral County, West Virginia. The project sells electricity to The Maryland Department of General Services and The University System of Maryland under PPAs with terms of 20 years for each respective institution. The project achieved commercial operation in December 2011.
Buffalo Bear
Tapestry owns a 100% interest in Buffalo Bear, LLC (Buffalo Bear), which owns a 18.9-megawatt wind farm located in Harper County, Oklahoma. The project sells electricity to Western Farmers Electric Cooperative under a 25-year PPA. The project achieved commercial operation in December 2008.
Taloga, Pinnacle, and Buffalo Bear are individually referred to as a “Project” or collectively referred to as “Projects.”
TAPESTRY WIND, LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
Notes to Unaudited Consolidated Financial Statements
September 30, 2014
(c) 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.
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.
(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 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):
TAPESTRY WIND, LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
Notes to Unaudited Consolidated Financial Statements
September 30, 2014
|
|
|
Acquisition Date |
| |
|
|
|
Fair Value |
| |
|
Assets |
|
|
| |
|
Current and non-current assets |
|
$ |
33,980 |
|
|
Net plant and equipment |
|
280,000 |
| |
|
Power purchase agreements |
|
67,000 |
| |
|
Total assets acquired |
|
$ |
380,980 |
|
|
|
|
|
| |
|
Liabilities |
|
|
| |
|
Current and non-current liabilities |
|
16,903 |
| |
|
Long-term debt |
|
197,963 |
| |
|
Total liabilties assumed |
|
$ |
214,866 |
|
|
|
|
|
| |
|
Net assets acquired |
|
$ |
166,114 |
|
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 agreements — The fair value of the PPAs acquired was determined utilizing a variation of the income approach where the expected future cash flows resulting from the acquired PPAs were 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 PPAs will be amortized over a term of approximately 17 years.
TAPESTRY WIND, LLC AND SUBSIDIARIES
(A Delaware Limited Liability Company)
Notes to Unaudited Consolidated Financial Statements
September 30, 2014
(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 $175,271,000 as of September 30, 2014. The Company also entered into forward starting interest rate agreements to hedge the probable forecasted refinancing of the final maturity payment of the term loan and shall be effective on December 21, 2021. The following table summarizes the effects of the swaps on the Company’s accumulated other comprehensive income (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 |
|
(4,237 |
) | |
|
|
|
|
| |
|
Accumulated OCI balance as of September 30, 2014 |
|
$ |
(4,237 |
) |
(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.