Greenbacker Delivers Third Quarter Results
Company announces year-over-year increases in clean power operating capacity, production, and revenue, valuation adjustments to address interest rates and rising insurance costs*Key Takeaways*
· *Amid revenue and production growth, macro headwinds—including higher interest rates and insurance costs—put downward pressure on NAV. *
· *Operating fleet increased by over 300 MW, including Greenbacker’s largest project in South Dakota.*
· *Capacity expansion drove modest production increases; year-to-date generation enough to power 187,000 homes.*
· *Company’s revenue increased, driven by a 25% boost in solar PPA revenue; overall revenue growth was more modest due to repowers at three wind assets, which were turned off for equipment replacement to extend useful life and increase the revenue potential of the projects.*
· *Company estimates entire pre-operational fleet will enter operation, become revenue-generating no later than the end of 2027.*
· *Company closes on $75 million warehouse financing facility; potential to increase up to $250 million.*
· *Investment management segment raised over $52 million in capital; AUM increased to approximately $3.6 billion.*
· *Company’s investments support carbon abatement, water conservation, and green jobs.*
NEW YORK, Nov. 14, 2023 (GLOBE NEWSWIRE) -- Greenbacker Renewable Energy Company LLC (“Greenbacker,” “GREC,” or the “Company”), an independent power producer and a leading climate-focused investment manager, has announced financial results^1 for the third quarter of 2023, including year-over-year revenue increases and substantial year-over-year growth in operating capacity and clean energy generation.
*Amid revenue and production growth, macro headwinds—including higher interest rates and insurance costs—put downward pressure on NAV*
Although Greenbacker’s fleet of clean energy projects recorded higher revenue from renewable power sales in the quarter, macroeconomic trends—primarily rising interest rates and rising insurance premiums related to higher inflation and climate change—led the Company to increase the discount rates on its assets as well as make other adjustments, resulting in an approximate 6% decline in the Company’s net asset value (“NAV”) over the three-month period ended September 30, 2023.
Greenbacker has actively adjusted its discount rate as inflation and bond yields began to rapidly increase, resulting in a 7% increase in discount rate assumptions in the Company's valuation models since the beginning of 2022.
Notably, despite some of these macroeconomic headwinds, investor interest in the renewables space continues to reach new heights. Investment in the renewable energy asset class reached a record $358 billion in the first half of 2023,^2 and global renewable capacity is expected to increase by 107 gigawatts (GW) in 2023—its largest annual increase ever.^3
*Operating fleet increased by over 300 MW, including Greenbacker’s largest project in South Dakota*
The total clean power–production and storage capacity of Greenbacker’s operational project fleet increased by 305 MW, representing year-over-year growth of 25%, as the Company continued to move under-construction projects into commercial operation. As pre-construction assets become operational, they begin to generate and sell power under long-term contracts leading to incremental revenue gains.
Of these 305 MW, one of the Company’s most exciting projects is the recently commissioned Fall River solar project. With a total energy generation capacity of 80 MWac / 99 MWdc, Fall River is both GREC’s largest clean energy asset in South Dakota and the third largest operating project in Greenbacker’s national fleet. The Company also powered on its recently announced Montezuma solar project in Colorado, as well as several smaller solar assets in Ohio, Nevada, and Utah.
As of September 30, 2023, Greenbacker’s clean energy fleet totaled 445 assets across North America,^4 a year-over-year decrease of 11 projects. These 11 projects in Greenbacker's pre-operational pipeline represented projects to which little to no capital had been committed and that no longer optimally aligned with the Company's investment strategy for various macro reasons. Greenbacker incurred no financial penalties in deciding to no longer pursue these projects.
*Capacity expansion drives production increases; year-to-date generation enough to power 187,000 homes*
With this increased operating capacity, Greenbacker’s clean power production continued its multi-year record of growth. During the quarter, the Company’s fleet generated 675,000 megawatt-hours (MWh) of total clean power, a year-over-year increase of 6%. This growth was driven by a 25% increase in energy produced by GREC’s solar assets and occurred even as the Company voluntarily took three wind assets out of operation in order to upgrade their equipment and extend the projects’ useful life.
In the year to date, the fleet produced over 2.0 million MWh of clean energy—enough to power approximately 186,871 US households annually,^5 and representing a 12% increase from the same period in 2022.
The table below summarizes the year-over-year capacity and production increases within Greenbacker’s portfolio.
*GREC Portfolio Metrics** *September 30,*
*2023* *September 30, *
*2022* *YoY Increase (total)* *YoY increase (%)*
Power-production capacity of operating fleet at end of period *1.5 GW* 1.2 GW 305 MW 25%
Power-generating capacity of pre-operational fleet at end of period *1.8 GW* 1.8 GW 18 MW 1%
Total power-generating capacity of fleet at end of period *3.3 GW* 3.0 GW 337 MW 11%
YTD total energy produced at end of period (MWh) *2,016,523* 1,797,942 218,581 12%
*GW figures are rounded to nearest tenth. Some figures may not add to stated totals, due to rounding.
Charles Wheeler, CEO of Greenbacker, said:
“We're converting our pre-operational fleet into income-producing assets at an incredible pace, while at the same time identifying attractive opportunities to augment our existing operating fleet. This year alone, Greenbacker has brought online two of its three largest operating projects, increasing the amount of clean power we generate for consumers and driving significant year-over-year revenue increases.”
*Company’s revenue increased, driven by a 25% boost in solar PPA revenue; overall revenue growth was more modest due to repowers at three wind assets, which were turned off for equipment replacement to extend useful life and increase the revenue potential of the projects*
Greenbacker also announced third quarter financial information for the Company, which includes its Independent Power Producer (“IPP”) and Investment Management (“IM”) business segments, the latter of which includes the Company’s investment management platform, Greenbacker Capital Management (“GCM”).
The Company’s operating solar fleet generated $24.1 million of revenue under its Power Purchase Agreements (“PPA revenue”), a 25% year-over-year increase that amounted to an additional $4.8 million revenue from the Company’s solar PPAs. In total, the fleet’s 314 assets, representing 1,098 MW of capacity, produced approximately 484,000 MWh of solar power in the quarter.
In order to increase production, extend the life of certain assets, and increase the length of its contracts to sell electricity, the Company strategically took three of its operating wind assets offline during portions of the quarter, to repower or retrofit the projects with newer components. Along with extending assets’ useful life and increasing generation capacity, these project upgrades should also benefit from the 30% investment tax credit (“ITC”) extended by the Inflation Reduction Act—highlighting the significant tailwinds the legislation is providing for the industry and the Company.
With these assets offline, GREC’s operating wind fleet, which included 16 operating projects comprising 386 MW of capacity, generated $9.8 million of PPA revenue from approximately 174,000 MWh of production. This represented a 29% (or $4.0 million) year-over-year decrease in wind PPA revenue.
Although less wind PPA revenue in the quarter also weighed on the Company’s operational results, once repowers and retrofits are completed these projects will return to operation, generating wind energy with more efficient equipment and contributing to future revenue.
*GREC Operating Fleet* *Third Quarter 2023* *Third Quarter 2022* *YoY Increase (total)* *YoY increase (%)*
Clean power produced by solar assets (MWh) *483,643* 361,551 122,092 34%
PPA revenue generated by solar assets (millions) *$**24.1* $19.3 $4.8 25%
Clean power produced by wind assets (MWh) *173,682* 250,074 (76,392) (31)%
PPA revenue generated by wind assets (millions) *$**9.8* $13.9 $(4.0) (29)%
Total clean power generated* (MWh) *674,631* 636,150 38,481 6%
Total PPA revenue generated (millions)† *$**35.8* $35.1 $0.6 2%
*Includes power generated by biomass facility.
†Some figures may not add to stated totals, due to rounding.
Greenbacker generated total operating revenue of $49.2 million in the quarter, which represents a 7% year-over-year increase, primarily due to energy revenue within the IPP segment. Energy revenue totaled $43.7 million and included $35.8 million from our long-term PPAs, representing year-over-year increases of 5% and 2%, respectively.
Adjusted EBITDA was $10.1 million for the quarter, largely driven by Adjusted EBITDA within the IPP segment of $18.7 million. Direct operating costs associated with capital raise efforts for certain of IM’s managed funds in their early stages and corporate expenses offset IPP results.
Funds From Operations (“FFO”) was $(2.4) million for the period and represents the $10.1 million of Adjusted EBITDA less cash interest expense and distributions to our tax equity investors.
The net loss attributable to Greenbacker was approximately $60.5 million, driven by non-cash depreciation, amortization, and impairment charges recorded during the period. This includes accelerated depreciation related to the repower and retrofit, and an impairment charge related to a single underperforming renewable energy project.
*For the three months ended September 30, 2023* *In millions (unaudited)*
*Select Financial Information*
Total Revenue $45.1
Total operating revenue* $49.2
Net loss attributable to Greenbacker $(60.5)
Adjusted EBITDA^† $10.1
FFO^† $(2.4)
NOTE: See the Company’s quarterly 10-Q filed with the SEC for additional financial information and important related disclosures.
*Total operating revenue excludes non-cash contract amortization, net.
†See “Non-GAAP Financial Measures” for additional discussion.
*Entire pre-operational fleet to enter operation, become revenue-generating by end of 2027*
In addition to the repower and equipment replacement initiatives in Greenbacker’s operating fleet, the Company also intends to complete construction on its entire pre-operational fleet and place it into service on a rolling basis, with the completion of those projects making them operational no later than the fourth quarter of 2027.
Greenbacker expects that these additional operational assets will generate extensive growth in revenues and EBITDA, as the Company begins benefiting from the additional contracted cash flows from an increasing number of operating projects. Each of Greenbacker’s pre-operational projects have long-term contracts to sell power to credit-worthy counterparties.
The table below illustrates Greenbacker’s estimated timeline for putting its current pre-operational pipeline into service.
*Operating Fleet (MW)* *Pre-Operating Fleet (MW)* *Total (MW)*
*3Q 2023* 1,504 1,844 3,348
*3Q 2024* 1,801 1,546 3,348
*3Q 2025* 2,196 1,151 3,348
*3Q 2026* 2,576 771 3,348
*4Q 2027* 3,348 -- 3,348
*Capacity figures are rounded to nearest MW. Some figures may not add to stated totals, due to rounding.
*Company closes on $75 million warehouse financing facility; potential to increase up to $250 million*
During the quarter, Greenbacker secured a new $75 million warehouse financing facility to support the construction and operation of its solar, solar-plus-storage, and standalone energy storage portfolios. The three-year revolving credit facility provides both considerable borrowing capacity and enhanced liquidity for the Company’s sustainability investments.
The facility is structured such that it can extend revolving loans for eligible projects in an aggregate amount up to $75 million, which may be increased to an aggregate amount of up to $250 million. It also includes a sublimit of up to $50 million for issuances of letters of credit.
Wells Fargo served as sole lead arranger, bookrunner, sustainability structuring agent, and administrative agent for the facility, and Wilmington Trust, National Association served as the collateral agent.
*Investment management segment raised over $52 million in capital; AUM increased to approximately $3.6 billion*
During the third quarter, Greenbacker’s IM business segment continued to receive substantial additional capital from retail and institutional investors. Overall, the Company raised $52.7 million of new equity capital, upon which GCM is entitled to collect management and performance fees. At the end of the period, the IM segment’s year-to-date capital raise totaled $197.4 million, and Greenbacker’s AUM^6 had increased to approximately $3.6 billion.
As of September 30, 2023, GCM served as the investment manager to four energy transition-focused funds.
The fees generated from these funds drove $2.8 million in revenue during the third quarter of 2023, mainly driven by AUM growth in Greenbacker Renewable Energy Company II and Greenbacker Development Opportunities Fund II, representing a considerable increase relative to fee revenue of $200,000 in the same period in 2022.
*Company’s investments support carbon abatement, water conservation, and green jobs *
In addition to providing investors with opportunities to put their capital to work in the energy transition, Greenbacker’s investment activities continued to deliver on ESG and impact metrics in the quarter.
As of September 30, 2023, the Company’s clean energy assets had cumulatively produced nearly 8.2 million MWh of clean power since January 2016, abating approximately 5.8 million metric tons of carbon.^7
The Company’s clean energy projects have saved more than 5.6 billion gallons of water,^8 compared to the amount of water needed to produce the same amount of power by burning coal, and its business activities will sustain over 6,400 green jobs.^9
Additional information regarding the Company’s impact can also be found in Greenbacker’s impact report.
*Forward-Looking Statements*
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. Although Greenbacker believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. Greenbacker undertakes no obligation to update any forward-looking statement contained herein to conform to actual results or changes in its expectations.
*Non-GAAP Financial Measures*
In addition to evaluating the Company’s performance on a U.S. GAAP basis, the Company now utilizes certain non-GAAP financial measures to analyze the operating performance of our segments as well as our consolidated business. Each of these measures should not be considered in isolation from or as superior to or as a substitute for other financial measures determined in accordance with U.S. GAAP, such as net income (loss) or operating income (loss). The Company uses these non-GAAP financial measures to supplement its U.S. GAAP results in order to provide a more complete understanding of the factors and trends affecting its operations.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that the Company uses as a performance measure, as well as for internal planning purposes. We believe that Adjusted EBITDA is useful to management and investors in providing a measure of core financial performance adjusted to allow for comparisons of results of operations across reporting periods on a consistent basis, as it includes adjustments relating to items that are not indicative on the ongoing operating performance of the business.
Adjusted EBITDA is a performance measure used by management that is not calculated in accordance with U.S. GAAP. Adjusted EBITDA should not be considered in isolation from or as superior to or as a substitute for net income (loss), operating income (loss) or any other measure of financial performance calculated in accordance with U.S. GAAP. Additionally, our calculation of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Funds From Operations
FFO is a non-GAAP financial measure that the Company uses as a performance measure to analyze net earnings from operations without the effects of certain non-recurring items that are not indicative of the ongoing operating performance of the business. FFO is calculated using Adjusted EBITDA less the impact of interest expense (excluding the non-cash component) and distributions to tax equity investors under the financing facilities associated with our IPP segment.
The Company believes that the analysis and presentation of FFO will enhance our investor’s understanding of the ongoing performance of our operating business. The Company will consider FFO, in addition to other GAAP and non-GAAP measures, in assessing operating performance and as a proxy for growth in distribution coverage over the long term.
FFO should not be considered in isolation from or as a superior to or as a substitute for net income (loss), operating income (loss) or any other measure of financial performance calculated in accordance with U.S. GAAP.
*General Disclosure*
This information has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security, or to participate in any trading or investment strategy. The information presented herein may involve Greenbacker’s views, estimates, assumptions, facts, and information from other sources that are believed to be accurate and reliable and are, as of the date this information is presented, subject to change without notice.
*GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES*
*CONSOLIDATED BALANCE SHEETS* *September 30, 2023* *December 31, 2022* *(unaudited)*
*Assets*
Current assets:
Cash and cash equivalents $ 59,241,077 $ 143,223,982
Restricted cash 17,992,508 47,474,110
Accounts receivable 29,172,439 20,440,153
Derivative assets, current 29,927,410 24,446,790
Notes receivable, current 46,705,910 59,106,434
Other current assets 51,261,088 29,624,295
Total current assets 234,300,432 324,315,764
Noncurrent assets:
Property, plant and equipment, net 2,060,586,216 1,889,705,529
Intangible assets, net 470,740,417 540,620,964
Goodwill 221,313,776 221,313,776
Investments, at fair value 95,334,934 92,554,266
Derivative assets 176,488,914 171,392,726
Other noncurrent assets 159,398,398 147,339,466
Total noncurrent assets 3,183,862,655 3,062,926,727
Total assets $ 3,418,163,087 $ 3,387,242,491
*Liabilities, Redeemable Noncontrolling Interests and Equity*
Current liabilities:
Accounts payable and accrued expenses $ 90,146,885 $ 50,701,644
Shareholder distributions payable 7,940,066 9,670,283
Contingent consideration, current 7,542,598 25,891,317
Current portion of long-term debt 194,427,279 95,869,554
Redemptions payable 32,631,155 32,198,102
Other current liabilities 10,237,610 10,861,131
Total current liabilities 342,925,593 225,192,031
Noncurrent liabilities:
Long-term debt, net of current portion 924,046,571 850,760,441
Contingent consideration 40,800,000 75,700,000
Deferred tax liabilities, net 80,253,284 85,654,803
Operating lease liabilities 109,174,231 101,281,144
Out-of-market contracts, net 207,530,473 218,112,321
Other noncurrent liabilities 44,102,042 39,825,898
Total noncurrent liabilities 1,405,906,601 1,371,334,607
Total liabilities $ 1,748,832,194 $ 1,596,526,638
Redeemable noncontrolling interests 2,034,000 2,034,000
Redeemable common shares, par value, $0.001 per share, 864,500 outstanding 865 —
Redeemable common shares, additional paid-in capital 7,170,470 —
Equity:
Preferred stock, par value, $0.001 per share, 50,000,000 authorized; none issued and outstanding — —
Common shares, par value, $0.001 per share, 350,000,000 authorized, 196,902,940 and 198,044,410 outstanding, respectively 196,903 198,044
Additional paid-in capital 1,761,398,518 1,763,061,377
Accumulated deficit (260,172,478 ) (114,679,721 )
Accumulated other comprehensive income 80,615,151 56,094,242
Noncontrolling interests 78,087,464 84,007,911
Total equity 1,660,125,558 1,788,681,853
Total liabilities, redeemable noncontrolling interests and equity $ 3,418,163,087 $ 3,387,242,491
*GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES*
*CONSOLIDATED STATEMENTS OF OPERATIONS*
*(unaudited)*
*For the three months ended September 30, 2023* *For the three months ended September 30, 2022* *For the nine months ended September 30, 2023* *For the period from May 19, 2022 through September 30, 2022*
*Revenue*
Energy revenue $ 43,721,429 $ 41,762,638 $ 126,114,938 $ 61,553,896
Investment Management revenue 2,842,307 199,758 9,173,509 408,798
Other revenue 2,626,192 3,872,142 5,895,556 5,371,619
Contract amortization, net (4,087,783 ) (4,423,703 ) (13,831,857 ) (6,261,422 )
Total revenue 45,102,145 41,410,835 127,352,146 61,072,891
*Operating expenses*
Direct operating costs 27,962,184 22,230,020 77,446,193 30,945,376
General and administrative 12,255,336 15,842,162 44,913,547 23,814,776
Depreciation, amortization and accretion 54,685,465 14,203,777 104,831,089 20,385,670
Impairment of long-lived assets 50,662,070 — 50,662,070 —
Total operating expenses 145,565,055 52,275,959 277,852,899 75,145,822
Operating loss (100,462,910 ) (10,865,124 ) (150,500,753 ) (14,072,931 )
Interest expense, net (10,658,283 ) (6,626,355 ) (28,084,945 ) (9,380,063 )
Unrealized gain on interest rate swaps, net 24,027,203 — 35,996,534 —
Unrealized loss on investments, net (1,945,473 ) (4,863,752 ) (1,267,700 ) (4,351,694 )
Other income (expense), net 214,628 156,455 245,160 (204,095 )
Net loss before income taxes (88,824,835 ) (22,198,776 ) (143,611,704 ) (28,008,783 )
Benefit from income taxes 11,535,787 1,700,896 14,154,599 1,118,352
Net loss (77,289,048 ) (20,497,880 ) (129,457,105 ) (26,890,431 )
Less: Net loss attributable to noncontrolling interests (16,827,263 ) (15,866,579 ) (65,808,113 ) (24,098,817 )
Net loss attributable to Greenbacker Renewable Energy Company LLC $ (60,461,785 ) $ (4,631,301 ) $ (63,648,992 ) $ (2,791,614 )
Earnings per share
Basic $ (0.31 ) $ (0.02 ) $ (0.32 ) $ (0.01 )
Diluted $ (0.31 ) $ (0.02 ) $ (0.32 ) $ (0.01 )
Weighted average shares outstanding
Basic 197,152,809 201,930,597 199,653,035 201,950,922
Diluted 197,152,809 201,930,597 199,653,035 201,950,922
*GREENBACKER RENEWABLE ENERGY COMPANY LLC AND SUBSIDIARIES*
*CONSOLIDATED STATEMENTS OF CASH FLOWS*
*(unaudited)* *For the nine months ended September 30, 2023* *For the period from May 19, 2022 through September 30, 2022*
*Cash Flows from Operating Activities*
Net loss $ (129,457,105 ) $ (26,890,431 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, amortization and accretion 118,662,946 26,647,092
Impairment of long-lived assets 50,662,070 —
Share-based compensation expense 8,459,629 4,177,031
Changes in fair value of contingent consideration (4,102,704 ) 800,000
Amortization of financing costs and debt discounts 3,742,519 1,156,886
Amortization of interest rate swap contracts into net loss 5,007,953 172,560
Unrealized gain on interest rate swaps (35,996,534 ) —
Unrealized loss on investments 1,267,700 4,351,694
Deferred income taxes (14,154,599 ) (1,118,352 )
Other 2,717,562 —
Changes in operating assets and liabilities:
Accounts receivable (8,874,375 ) 5,210,660
Current and noncurrent derivative assets 33,946,521 —
Other current and noncurrent assets (13,866,980 ) (135,228 )
Accounts payable and accrued expenses 13,432,636 (7,099,830 )
Operating lease liabilities (825,639 ) —
Other current and noncurrent liabilities 3,498,572 1,748,887
Net cash provided by operating activities 34,120,172 9,020,969
*Cash Flows from Investing Activities*
Purchases of property, plant and equipment (266,338,251 ) (221,275,181 )
Deposits paid for property, plant and equipment (4,500,000 ) —
Purchases of investments (4,048,368 ) (33,909,381 )
Loans made to other parties — (10,309,201 )
Receipts from loans made to other parties 12,450,524 —
Cash acquired from Acquisition and consolidation of GDEV, net — 1,714,463
Net cash used in investing activities (262,436,095 ) (263,779,300 )
*Cash Flows from Financing Activities*
Shareholder distributions (65,277,898 ) (29,433,992 )
Return of collateral paid for swap contract 1,735,000 6,815,000
Repurchases of common shares (50,035,409 ) (5,105,449 )
Other capital activity — (218,984 )
Deferred sales commissions (2,654,107 ) —
Contributions from noncontrolling interests 73,910,317 69,638,328
Distributions to noncontrolling interests (12,827,534 ) (7,659,395 )
Proceeds from borrowings 261,370,773 223,800,946
Payments on borrowings (88,169,694 ) (14,645,530 )
Payments for loan origination costs (3,200,032 ) (5,885,729 )
Net cash provided by financing activities 114,851,416 237,305,195
*Net decrease in Cash, cash equivalents and Restricted cash* (113,464,507 ) (17,453,136 )
*Cash, cash equivalents and Restricted cash at beginning of period** 190,698,092 205,449,317
*Cash, cash equivalents and Restricted cash at end of period * $ 77,233,585 $ 187,996,181
*Supplemental Disclosures*
Interest paid, net of amounts capitalized $ 19,194,129 $ 9,084,396
*Non-cash investing and financing activities*
Deferred sales commission payable 8,433,689 3,155,993
Redemptions payable 32,631,156 12,091,360
Distribution payable to shareholders 7,940,066 7,312,905
Capital expenditures incurred but not paid 50,328,435 54,135,580
Non-cash distributions to noncontrolling interests — 2,514,878
* Cash, cash equivalents and Restricted cash as of May 18, 2022 includes all consolidated subsidiaries of the Company upon the change in status.
*Non-GAAP Reconciliations*
Adjusted EBITDA
The following table reconciles Net loss attributable to Greenbacker Renewable Energy Company LLC to Adjusted EBITDA: *For the three months ended September 30, 2023* *For the three months ended September 30, 2022* *For the nine months ended September 30, 2023* *For the period from May 19, 2022 through September 30, 2022*
*Net loss attributable to Greenbacker Renewable Energy Company LLC* $ (60,461,785 ) $ (4,631,301 ) $ (63,648,992 ) $ (2,791,614 )
Add back or deduct the following:
Net loss attributable to noncontrolling interests (16,827,263 ) (15,866,579 ) (65,808,113 ) (24,098,817 )
Benefit from income taxes (11,535,787 ) (1,700,896 ) (14,154,599 ) (1,118,352 )
Interest expense, net 10,658,283 6,626,355 28,084,945 9,380,063
Unrealized gain on interest rate swaps, net (24,027,203 ) — (35,996,534 ) —
Unrealized loss on investments, net 1,945,473 4,863,752 1,267,700 4,351,694
Other income (expense), net (214,628 ) (156,455 ) (245,160 ) 204,095
Depreciation, amortization and accretion^(1) 58,902,406 18,627,480 119,057,770 26,647,092
*EBITDA* $ (41,560,504 ) $ 7,762,356 $ (31,442,983 ) $ 12,574,161
Share-based compensation expense 4,479,632 2,842,557 9,992,498 4,177,031
Change in fair value of contingent consideration (5,419,800 ) 800,000 (4,102,704 ) 800,000
Impairment of long-lived assets 50,662,070 — 50,662,070 —
Non-recurring professional services and legal fees 729,287 2,943,227 2,920,361 4,700,389
Non-recurring salaries and personnel related expenses 1,250,000 — 1,250,000 —
*Adjusted EBITDA* $ 10,140,685 $ 14,348,140 $ 29,279,242 $ 22,251,581
(1) Includes contract amortization, net in the amount of $4.1 million, $4.4 million, $13.8 million and $6.3 million for the three months ended September 30, 2023, the three months ended September 30, 2022, the nine months ended September 30, 2023 and the period from May 19, 2022 through September 30, 2022, respectively, which are included in Contract amortization, net on the Consolidated Statements of Operations.
The Company defines Adjusted EBITDA as net income (loss) before: (i) interest expense; (ii) income taxes; (iii) depreciation expense; (iv) amortization expense (including contract amortization); (v) accretion; (vi) impairment of long-lived assets; (vii) amounts attributable to our redeemable and non-redeemable noncontrolling interests; (viii) unrealized gains and losses on financial instruments; (ix) other income (loss); and (x) foreign currency gain (loss). Additionally, the Company further adjusts for the following items described below:
· Share-based compensation is excluded from Adjusted EBITDA as it is different from other forms of compensation, as it is a non-cash expense and is highly variable. For example, a cash salary generally has a fixed and unvarying cash cost. In contrast, the expense associated with an equity-based award is generally unrelated to the amount of cash ultimately received by the employee, and the cost to the Company is based on a share-based compensation valuation methodology and underlying assumptions that may vary over time.
· The change in fair value of contingent consideration, which is related to Greenbacker’s acquisition of GCM and certain other affiliated companies, is excluded from Adjusted EBITDA, if any such change occurs during the period. The non-cash, mark-to-market adjustments are based on the expected achievement of revenue targets that are difficult to forecast and can be variable, making comparisons across historical and future quarters difficult to evaluate.
· Other costs that are not consistently occurring, not reflective of expected future operating expense, and provide no insight into the fundamentals of current or past operations of our business are excluded from Adjusted EBITDA. This includes costs such as professional services and legal fees.The Company uses Segment Adjusted EBITDA to evaluate the financial performance of and allocate resources among our operating segments. Segment Adjusted EBITDA is determined for our segments consistent with the adjustments noted above but further excludes unallocated corporate expenses as these items are centrally controlled and are not directly attributable to any reportable segment.
The following table reconciles total Segment Adjusted EBITDA to Net loss attributable to Greenbacker Renewable Energy Company LLC:
*For the three months ended September 30, 2023* *For the three months ended September 30, 2022* *For the nine months ended September 30, 2023* *For the period from May 19, 2022 through September 30, 2022*
Segment Adjusted EBITDA:
IPP Adjusted EBITDA $ 18,657,425 $ 23,142,676 $ 55,460,217 $ 34,938,686
IM Adjusted EBITDA (2,122,838 ) (2,837,559 ) (4,275,495 ) (3,612,735 )
Total Segment Adjusted EBITDA $ 16,534,587 $ 20,305,117 $ 51,184,722 $ 31,325,951
Reconciliation:
Total Segment Adjusted EBITDA $ 16,534,587 $ 20,305,117 $ 51,184,722 $ 31,325,951
Unallocated corporate expenses (6,393,902 ) (5,956,977 ) (21,905,480 ) (9,074,370 )
Total Adjusted EBITDA 10,140,685 14,348,140 29,279,242 22,251,581
Less:
Share-based compensation expense 4,479,632 2,842,557 9,992,498 4,177,031
Change in fair value of contingent consideration (5,419,800 ) 800,000 (4,102,704 ) 800,000
Non-recurring professional services and legal fees 729,287 2,943,227 2,920,361 4,700,389
Non-recurring salaries and personnel related expenses 1,250,000 — 1,250,000 —
Depreciation, amortization and accretion^(1) 58,902,406 18,627,480 119,057,770 26,647,092
Impairment of long-lived assets 50,662,070 — 50,662,070 —
Operating loss $ (100,462,910 ) $ (10,865,124 ) $ (150,500,753 ) $ (14,072,931 )
Interest expense, net (10,658,283 ) (6,626,355 ) (28,084,945 ) (9,380,063 )
Unrealized gain on interest rate swaps, net 24,027,203 — 35,996,534 —
Unrealized loss on investments, net (1,945,473 ) (4,863,752 ) (1,267,700 ) (4,351,694 )
Other income (expense), net 214,628 156,455 245,160 (204,095 )
*Net loss before income taxes* *$* *(88,824,835* ) *$* *(22,198,776* ) *$* *(143,611,704* ) *$* *(28,008,783* )
Benefit from income taxes 11,535,787 1,700,896 14,154,599 1,118,352
*Net loss* *$* *(77,289,048* ) *$* *(20,497,880* ) *$* *(129,457,105* ) *$* *(26,890,431* )
Less: Net loss attributable to noncontrolling interests (16,827,263 ) (15,866,579 ) (65,808,113 ) (24,098,817 )
*Net loss attributable to Greenbacker Renewable Energy Company LLC* *$* *(60,461,785* ) *$* *(4,631,301* ) *$* *(63,648,992* ) *$* *(2,791,614* )
(1) Includes contract amortization, net in the amount of $4.1 million, $4.4 million, $13.8 million and $6.3 million for the three months ended September 30, 2023, the three months ended September 30, 2022, the nine months ended September 30, 2023 and the period from May 19, 2022 through September 30, 2022, respectively, which are included in Contract amortization, net on the Consolidated Statements of Operations.
Funds From Operations
The following table reconciles Net loss attributable to Greenbacker Renewable Energy Company LLC to Adjusted EBITDA and then to FFO:
*For the three months ended September 30, 2023* *For the three months ended September 30, 2022* *For the nine months ended September 30, 2023* *For the period from May 19, 2022 through September 30, 2022*
Net loss attributable to Greenbacker Renewable Energy Company LLC $ (60,461,785 ) $ (4,631,301 ) $ (63,648,992 ) $ (2,791,614 )
Add back or deduct the following:
Net loss attributable to noncontrolling interests (16,827,263 ) (15,866,579 ) (65,808,113 ) (24,098,817 )
Benefit from income taxes (11,535,787 ) (1,700,896 ) (14,154,599 ) (1,118,352 )
Interest expense, net 10,658,283 6,626,355 28,084,945 9,380,063
Unrealized gain on interest rate swaps, net (24,027,203 ) — (35,996,534 ) —
Unrealized loss on investments, net 1,945,473 4,863,752 1,267,700 4,351,694
Other income (expense), net (214,628 ) (156,455 ) (245,160 ) 204,095
Depreciation, amortization and accretion^(1) 58,902,406 18,627,480 119,057,770 26,647,092
Impairment of long-lived assets 50,662,070 — 50,662,070 —
Share-based compensation expense 4,479,632 2,842,557 9,992,498 4,177,031
Change in fair value of contingent consideration (5,419,800 ) 800,000 (4,102,704 ) 800,000
Non-recurring professional services and legal fees 729,287 2,943,227 2,920,361 4,700,389
Non-recurring salaries and personnel related expenses 1,250,000 — 1,250,000 —
*Adjusted EBITDA* $ 10,140,685 $ 14,348,140 $ 29,279,242 $ 22,251,581
Cash portion of interest expense (7,699,988 ) (5,137,525 ) (19,604,498 ) (8,050,617 )
Distributions to tax equity investors (4,811,735 ) (4,173,130 ) (13,299,363 ) (7,593,063 )
*FFO* $ (2,371,038 ) $ 5,037,485 $ (3,624,619 ) $ 6,607,901
(1) Includes contract amortization, net in the amount of $4.1 million, $4.4 million, $13.8 million and $6.3 million for the three months ended September 30, 2023, the three months ended September 30, 2022, the nine months ended September 30, 2023 and the period from May 19, 2022 through September 30, 2022, respectively, which are included in Contract amortization, net on the Consolidated Statements of Operations.
FFO is a non-GAAP financial measure that the Company uses as a performance measure to analyze net earnings from operations without the effects of certain non-recurring items that are not indicative of the ongoing performance of the business.
FFO is calculated using Adjusted EBITDA less the impact of interest expense (excluding the non-cash component) and distributions to tax equity investors under the financing facilities associated with our IPP segment.
*About Greenbacker Renewable Energy Company*
Greenbacker Renewable Energy Company LLC is a publicly reporting, non-traded limited liability sustainable infrastructure company that both acquires and manages income-producing renewable energy and other energy-related businesses, including solar and wind farms, and provides investment management services to other renewable energy investment vehicles. We seek to acquire and operate high-quality projects that sell clean power under long-term contracts to high-creditworthy counterparties such as utilities, municipalities, and corporations. We are long-term owner-operators, who strive to be good stewards of the land and responsible members of the communities in which we operate. Greenbacker conducts its investment management business through its wholly owned subsidiary, Greenbacker Capital Management, LLC, an SEC-registered investment adviser. We believe our focus on power production and asset management creates value that we can then pass on to our shareholders—while facilitating the transition toward a clean energy future. For more information, please visit https://greenbackercapital.com.
*Greenbacker media contact*
Chris Larson
Media Communications
646.569.9532
c.larson@greenbackercapital.com
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/675159a2-fb68-40bd-97a1-1899e39b39fa
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^1*Past performance is not indicative of future results*.
^2Renewable Energy Investment Hits Record-Breaking $358 Billion in 1H 2023 | BloombergNEF, Meredith Annex, August 21, 2023.
^3Executive summary – Renewable Energy Market Update, International Energy Agency, June 2023.
^4 Total assets and megawatts statistics include those projects where the Company has contracted for the acquisition of the project pursuant to a Membership Interest Purchase Agreement (“MIPA”).
^5Frequently Asked Questions (FAQs) - U.S. Energy Information Administration (EIA)
^6 Total AUM includes GREC and GCM’s managed funds. AUM represents the underlying fair value of investments, determined generally in accordance with ASC 820, cash and cash equivalents and project level debt. These figures are unaudited and subject to change.
^7 When compared with a similar amount of power generation from fossil fuels. Carbon abatement is calculated using the EPA Greenhouse Gas Equivalencies Calculator which uses the Avoided Emissions and generation Tool (AVERT) US national weighted average CO[2] marginal emission rate to convert reductions of kilowatt-hours into avoided units of carbon dioxide emissions.
^8 Gallons of water saved are calculated based on Operational water consumption and withdrawal factors for electricity generating technologies: a review of existing literature – IOPscience, J Macknick et al 2012 Environ. Res. Lett. 7 045802.
^9 Green jobs are calculated from the International Renewable Energy Agency's measurement that one megawatt of renewable power supports approximately 4 jobs. Data is as of September 30, 2023.