Investor Presentation December 2017

Transcription

1 Investor Presentation December 2017

2 * Safe Harbor Statement The following information contains, or may be deemed to contain, forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995 and forward-looking information as defined in Canadian securities laws). The words may, plan, forecast, seek, target, goal, believe, expect, anticipate, intend, estimate and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. You should not place undue reliance on these forward-looking statements about Pattern Energy Group Inc. (the Company ). By their nature, forward-looking statements are not statements of historical facts and involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future, many of which are outside the Company s control. Such risks and uncertainties could cause the actual results, performance or achievements of the Company to be materially different from its current expectations and include, but are not limited to: the Company s ability to complete construction of any construction projects and transition them into financially successful operating projects; the Company s ability to complete acquisitions of power projects; fluctuations in supply, demand, prices and other conditions for electricity; the Company s electricity generation, projections thereof and factors affecting production including wind and other conditions, other weather conditions, availability and curtailment; changes in law; and the Company s ability to keep pace with and take advantage of new technologies. In particular, this presentation contains the Company s adjusted EBITDA and cash available for distribution, which are not measures under generally accepted accounting principles in the United States ( U.S. GAAP ). Adjusted EBITDA and cash available for distribution have been disclosed because the Company believes that these measures may assist investors in evaluating its financial performance and its ability to pay dividends. Neither adjusted EBITDA nor cash available for distribution should be considered the sole measure of the Company s performance and should not be considered in isolation from, or as a substitute for, the Company s U.S. GAAP measures, including, but not limited to, the most directly comparable U.S. GAAP measures, net (loss) income and net cash provided by operating activities, respectively. See pages of this presentation, Item 7 in the Company s annual report on Form 10-K for the year ended December 31, 2016 and Item 2 in the 2017 quarterly report on Form 10-Q for the period ended September 30, 2017, titled Management s Discussion and Analysis of Financial Condition and Results of Operations Key Metrics, for a reconciliation of net cash provided by operating activities to cash available for distribution and net (loss) income to adjusted EBITDA. Forward looking measures of CAFD, run-rate CAFD and CAFD per share growth are non U.S. GAAP measures that cannot be reconciled to net cash provided by operating activities as the most directly comparable non U.S. GAAP financial measure without unreasonable effort primarily because of the uncertainties involved in estimating forward-looking changes in working capital balances which are added to earnings to arrive at cash provided by operations and subtracted therefrom to arrive at CAFD. A description of the adjustments to determine CAFD can be found in Management s Discussion and Analysis of Financial Condition and Results of Operations Key Metrics of the Company s 2016 annual report on Form 10-K and 2017 quarterly report on Form 10-Q for the period ended September 30, All forward-looking statements speak only as of the date made, and the Company expressly disclaims any intention or obligation to revise or publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise except as may be required by applicable law. For additional information regarding known material risks that could cause the Company s actual results to differ from its projected results please read Risk Factors in the Company s 2016 annual report on Form 10-K and 2017 quarterly report on Form 10-Q for the for the period ended September 30, (All currencies are U.S. dollars unless specified otherwise.) PAGE 2

3 Highlights 2.7 GW 97%+ 42% Owned capacity Fleet availability Potential increase to existing portfolio from irofo list $ % 15 Annualized dividend per share Increase in dividend since IPO Consecutive dividend increases PAGE 3

4 New Growth Strengthened business model Attractive markets Expanded growth opportunities PAGE 4

5 Strengthened Business Model Larger pipeline, improved alignment, more capital access Major increase in development 10 GW 70% increase in pipeline 1 GW 60% increase in irofo list Extends growth horizon Modest upstream investment in development Secures access to expanded pipeline of quality assets Investment in development, potential for higher returns Future incremental revenue stream Secured funding source PSP Investments new strategic relationship with Pattern Energy PSP Investments aligned across Pattern Energy and Pattern Development PSP Investments largest shareholder in Pattern Energy $1B new capital commitments for Pattern Development % Pattern Energy initial ownership in Pattern Development 2.0 $500M co-investment in projects with Pattern Energy PAGE 5

6 U.S. still very strong Pattern Development believes power purchaser market activity has picked up significantly in last 6 months Canada Alberta opened to contracting Japan and Mexico continue to be active Technology costs continue to fall Attractive Markets Markets where Pattern Energy is active remain strong Efficiency improvements include longer blades which improve capacity factors and competitiveness with conventional generation Pattern Development is seeing materially lower turbine market prices ITC s Suniva decision may improve wind opportunities Project debt and tax equity pricing lower PAGE 6

7 Attractive market characteristics 3 rd or 4 th largest electricity market with renewables mandate 13-15% renewables generation targets under METI 2030, excluding hydro Current PPAs $ /MWh, 20-year Under-developed market with high barriers to entry Attractive local financing conditions in debt and equity markets Regulatory environment stable Attractive Markets Japan is today one of most exciting markets in the world Pattern Energy well positioned to grow in Japan Local market presence through GPI, its affiliated entity owned by Pattern Development Development Bank of Japan is an attractive potential local partner GPI has one of the largest Japanese wind development pipelines Fully integrated business with operating, finance and project expertise PAGE 7

8 Expanded Growth Opportunities irofo acquisition opportunities are increasing Pattern Development 1.0 Nameplate MW (gross/owned) Est. Commercial Operations Date Otsuki 12/ A Kanagi Solar 10/ A Futtsu Solar 31/ A Conejo Solar 1 104/ A Belle River 100/ A El Cabo 298/ Ohorayama 33/ North Kent 100/ Henvey Inlet 300/ Tsugaru 122/ Sumita 100/ Pattern Development 2.0 Stillwater Big Sky 79/ Crazy Mountain 80/ Grady 220/ Ishikari 100/ MW of near-term irofo 1 opportunities COD in 2017/18 Significant expansion of U.S. and Japan development by Pattern Development could increase irofo opportunities Opportunity to invest in Japanese assets Modest Pattern Development 2.0 investments 1) Ongoing review of Chilean assets, 350+ MW excludes Conejo Total 1,689 / 1,150 PAGE 8

9 Near-term Opportunities Project Location Nameplate MW (gross/owned) Est. Commercial Operations Date Technology Contract Tenure Off Taker Otsuki Kochi, JP 12/ A MHI 20-year Shikoku Kanagi Solar Shimane, JP 10/ A Kyocera 20-year Chugoku irofo acquisition opportunities Futtsu Solar Chiba, JP 31/ A Kyocera 20-year TEPCO Belle River Ontario, CA 100/ A Siemens 20-year IESO El Cabo New Mexico, US 298/ Siemens 20-year SCE Mont Sainte- Marguerite Quebec, CA 73/ GE 25-year Hydro-Quebec Ohorayama Kochi, JP 33/ GE 20-year Shikoku Tsugaru Aomori, JP 122/ GE 20-year Tohoku Sumita Iwate, JP 100/ TBD 20-year Tohoku PAGE 9

10 Expanded Growth Opportunities Modest investment in Pattern Development 2.0 increases U.S. growth opportunities More investment opportunities Secures access to exclusive 10 GW development pipeline 3 GW of 100% PTC qualified turbines/projects Aligned markets: U.S., Canada, Mexico, Japan Good risk-reward profile Strong returns Value created in sale of projects above investment cost Limited capital in earlier development stage Strong investment rationale Expands expertise Proven management and development team Solidifies alignment with Pattern Development Projects with stable cash flow profile with investment grade counterparties Maintain operational and management control PAGE 10

11 Corporate Overview PAGE 11

12 Pattern Energy and Pattern Development Pattern Energy Group Pattern Energy Group Inc. Owner Operator PEGI : NASDAQ & TSX Owns 20% of Pattern Development 2.0 Pattern Development Pattern Development Developer Pattern Development 1.0 owns ~7% of Pattern Energy PAGE 12

13 The Three Pillars of Our Business Core strategy remains the same High quality assets U.S., Canada, Japan, Mexico core targeted markets Wind, solar, transmission, storage Sustainable cash flows De-risked, quality projects Long-term PPAs with quality off-takers Amortizing project debt with fixed interest rates Prudent growth Only accretive acquisitions Organic growth from existing assets and improvements Selective growth with quality assets, primarily from drop downs from Pattern Development No unfunded commitments for projects or acquisitions Managed capital Reduce cost improvements Retain excess cash flow Recycle limited sell downs for reinvestment in new assets Replace identify other sources of capital and fee generation Raise new debt and equity offerings PAGE 13

14 14+ year average life PPA 92% contracted Strong Portfolio Financial Metrics A average off-taker credit rating 3x corporate level debt leverage target 13.5 MT of carbon saved Sound balance sheet $466 M liquidity available (09/30/17) 50% consolidated leverage 7.3 B gal of water saved 4 year average age of fleet 90% Siemens and GE equipment 15 consecutive dividend increases Data as of Sep 30, 2017, unless specified otherwise. PAGE 14

15 Operations Foundation 2.7 GW Owned / 3.8 GW Operating Meikle Chile Puerto Rico St. Joseph Conejo Solar Santa Isabel Crazy Mountain Stillwater Big Sky Hatchet Ridge Lost Creek Spring Valley Post Rock Broadview Grady Panhandle 1 & 2 Ocotillo Logan s Gap Henvey Inlet Armow Belle River North Kent Amazon Wind Farm (Fowler) Mont Sainte- Marguerite K2 Grand Renewable South Kent El Arrayan Japan Kanagi Solar Tsugaru Otsuki Ohorayama Ishikari Sumita Futtsu Solar Owned portfolio Identified ROFO pipeline Gulf Wind PAGE 15

16 Limited concentration risk % of owned capacity Capacity by project (%) Capacity by offtaker (%) Meikle, 3% MSM, 3% BC Hydro, 3% Hydro-Quebec, 3% Minara Los Pelambres, 3% Gulf Wind, 10% Armow, 3% Morgan Stanley, 15% Hatchet Ridge, 4% PREPA, 4% Broadview, 10% PGE, 4% St Joseph, 5% K2, 3% Lost Creek, 6% Post Rock, 4% Amazon Wind, 4% Logan's Gap, 6% Grand, 2% Panhandle 2, 3% Panhandle 1, 6% El Arrayan, 3% Spring Valley, 6% Santa Isabel, 4% Ocotillo, 10% South Kent, 5% Amazon Web Services, 4% Westar, 4% Manitoba Hydro, 5% Associated Electric Coop, 6% NV Energy, 6% Walmart, 6% SDGE, 10% IESO, 14% Southern California Edison, 10% PAGE 16

17 Long-term fixed price contracts Remaining project contract term and counterparty credit rating 1 Years Mont Sainte-Marguerite Meikle St Joseph Santa Isabel Broadview Armow K2 Grand South Kent El Arrayan Ocotillo Spring Valley Post Rock Lost Creek Amazon Wind Panhandle 1 Panhandle 2 Logan's Gap Hatchet Ridge Gulf Wind Hydro-Quebec, AA- / Aa2 BC Hydro, AAA / Aaa Manitoba Hydro, A+ / Aa2 PREPA, D / Ca Southern California Edison Co., BBB+ / A2 IESO, A+ / Aa2 IESO, A+ / Aa2 IESO, A+ / Aa2 IESO, A+ / Aa2 Minera Los Pelambres, NR / NR SDG&E, A / A1 NV Energy, A / Baa2 Westar Energy, Inc., BBB+ / Baa1 Associated Electric Cooperative, AA /A1 Amazon Inc., AA- / Baa1 Citigroup Energy Inc., BBB+ / Baa1 Morgan Stanley, BBB+ / A3 Wal-Mart Stores, Inc., AA /Aa2 PG&E, A- / A2 Morgan Stanley, BBB+ / A3 92% Generation sold under fixed price off-take contracts 14+ Years avg. weighted remaining term A Avg. credit rating 1. Includes agreement to acquire MSM and divestiture of Panhandle 2 PAGE 17

18 Driving CAFD/share growth with irofo acquisitions 10,000 Only 1,114 of unidentified MW to reach 2020 goal 5X 5,000 With access to capital, our pipeline and development funding, we aim to grow at high single digit to double digit CAFD/share (MW) 1,041 IPO (2013) Today 2, ,358 ROFO Project & 3rd Party Acquisitions 3,886 1,150 Identified ROFO 1, Target Development Pipeline PAGE 18

19 Financials PAGE 19

20 Q Financial Summary USD millions (except GWh) Q change Q YTD 2017 change YTD change 2015 GWh 1,514 3% 1,472 5,664 14% 4,989 6,806 33% 5,137 Revenue $ $91.9 $ % $273.0 $ % $329.8 Adjusted EBITDA 1 $54.7 (12)% $62.3 $ % $219.0 $ % $250.5 Cash Available for Distribution 1 $9.5 (53)% $20.2 $ % $96.7 $ % $92.4 CAFD ON TRACK TO ACHIEVE NARROWED FY 2017 GUIDANCE OF $ M 1) See pages for a reconciliation of Q3 & YTD 2017/2016 and FY 2015/2016 net cash provided by operating activities to Q3 & YTD 2017/2016 and FY 2016/2015 cash available for distribution and net (loss) income to adjusted EBITDA PAGE 20

21 2017 CAFD Guidance$ M 1 Narrowed 2017 CAFD guidance $133 M $ M $92 M 2015 CAFD 2016 CAFD 2017 Guidance(1) 1) The forward looking measure of 2017 full year cash available for distribution (CAFD) is a non-gaap measures that cannot be reconciled to net cash provided by operating activities as the most directly comparable GAAP financial measure without unreasonable effort primarily because of the uncertainties involved in estimating forward-looking changes in working capital balances which are added to earnings to arrive at cash provided by operations and subtracted there from to arrive at CAFD. A description of the adjustments to determine CAFD can be found within Item 7, Management s Discussion and Analysis of Financial Condition and Results of Operations - Key Metrics, of Pattern Energy's 2016 Annual Report on Form 10-K for the period ended December 31, 2016 and Form 10-Q for the period ended September 30, 2017 and pages herein. PAGE 21

22 Fifteenth consecutive dividend increase Period Dividend per Class A share % increase Q $ Q $ % Q $ % Q $ % Q $ % Q $ % Q $ % Q $ % Q $ % Q $ % Q $ % Q $ % Q $ % Q $ % Q $ % Q $ % Total Since IPO 35.0% Liquidity (as of Sep 30, 2017, $ millions) Unrestricted cash $91 Restricted cash $27 Revolver availability $211* Undrawn capacity under certain project debt facilities Managing Liquidity $137 Total $466 * Revolver availability as of Nov 6, $402 80% target payout ratio of CAFD run rate Reserving cash in strong cash flow periods Repricing and modifying project debt Increase project output via improvements and availability PAGE 22

23 All employees, contract personnel and their families safe no injuries reported No material damage to turbines All turbines operational Santa Isabel, Puerto Rico Update Working with the Puerto Rico Electric Power Authority (PREPA) to support its efforts to restore power locally Updated and narrowed 2017 CAFD guidance range takes into consideration potential for no production at Santa Isabel through year end PAGE 23

24 Meeting Our Promises Strong Market Significant Capital to Grow Expanding Growth Opportunities Alternative Capital Available PAGE 24

25 Appendix PAGE 25

26 Owned Pipeline Project size Owned % Owned MW Revenue Off-Taker COD Turbines Contract Tenor % Under Contract Gulf Wind, TX % 283 Hedge Morgan Stanley 2009 Mitsubishi 2019 ~58% Hatchet Ridge, CA % 101 PPA PG&E 2010 Siemens % St. Joseph, MB % 138 PPA Manitoba Hydro 2011 Siemens % Spring Valley, NV % 152 PPA NV Energy 2012 Siemens % Santa Isabel, Puerto Rico % 101 PPA PREPA 2012 Siemens % Ocotillo, CA % 265 PPA SDG&E 2012/2013 Siemens % South Kent, ON % 135 PPA IESO 2014 Siemens % El Arrayán, Chile % 81 Hedge Minera Los Pelambres 2014 Siemens 2034 ~74% Panhandle 1, TX % 172 Hedge Citigroup Energy 2014 GE 2027 ~80% Panhandle 2, TX % 75 Hedge Morgan Stanley 2014 Siemens 2027 ~80% Grand, ON % 67 PPA IESO 2014 Siemens % Post Rock, KS % 120 PPA Westar 2012 GE % Lost Creek, MO % 150 PPA Associated Electric Cooperative 2010 GE % K2, ON % 90 PPA IESO 2015 Siemens % Logan s Gap, TX % 164 PPA / Hedge Wal-mart Stores Inc. / Merrill Lynch 2015 Siemens 2025/28 ~75% Amazon Wind Farm (F), IN % 116 PPA Amazon.com 2015 Siemens % Broadview, NM % 272 PPA Southern California Edison 2017 Siemens % Armow, ON % 90 PPA IESO 2015 Siemens % Meikle, BC % 91 PPA BC Hydro 2017 GE % Mont Sainte-Marguerite % 73 PPA Hydro-Quebec 2018 Siemens % Total Combined 3,771 2, years 92% 26

27 Cash Available for Distributions (Non-GAAP Reconciliation) Three months ended September 30, Nine months ended September 30, Twelve months ended December 31, Net cash provided by operating activities $2,147 $37,395 $159,330 $107,371 $163,664 $117,849 Changes in operating assets and liabilities 25,481 (4,513) (22,475) 800 (11,000) (6,880) Network upgrade reimbursement 346 8,936 4,821 2,472 Release of restricted cash to fund project and general and administrative costs ,611 Operations and maintenance capital expenditures (254) (133) (517) (879) (1,017) (779) Distributions from unconsolidated investments 2,821 8,292 11,211 40,066 41,698 34,216 Reduction of other asset - Gulf Wind energy derivative deposit 6,205 Other 598 (195) 1,974 (130) (302) (323) Less: Distributions to noncontrolling interests (4,537) (3,584) (13,701) (11,771) (17,896) (7,882) Principal payments paid from operating cash flows (17,140) (17,060) (40,911) (39,322) (47,634) (54,041) Cash available for distribution $9,462 $20,202 $103,847 $96,725 $132,974 $92,448 PAGE 27

28 Adjusted EBITDA (Non-GAAP Reconciliation) Three months ended September 30, Nine months ended September 30, Twelve months ended December 31, Net loss $(48,376) $(11,050) $(60,521) $(55,744) $(52,299) $(55,607) Plus: Interest expense, net of interest income 26,710 19,583 73,009 60,906 76,598 75,309 Tax (benefit) provision (3,839) 1,311 5,477 4,038 8,679 4,943 Depreciation, amortization and accretion 56,650 45, , , , ,322 EBITDA 31,145 55, , , , ,967 Unrealized loss on energy derivative 1 3, ,134 14,970 22, (Gain) loss on undesignated derivatives, net 4,081 (1,825) 9,480 17,685 3,324 5,490 Realized loss on derivatives 2,207 2,207 11,221 Early extinguishment of debt 4,941 Net loss on transactions , ,400 Adjustments from unconsolidated investments 2 (8,439) (19,573) (659) Plus, proportionate share from unconsolidated investments: Interest expense, net of interest income 10,270 7,634 29,108 22,778 32,103 23,537 Depreciation, amortization and accretion 9,361 6,660 26,390 19,624 27,763 22,680 (Gain) loss on undesignated derivatives, net (5,908) 1,544 (8,696) 17,015 1,552 8,514 Adjusted EBITDA $54,735 $62,305 $244,802 $219,026 $304,156 $250,541 1) Amount is included in electricity sales on the consolidated statements of operations. 2) See Note 7, Unconsolidated Investments in the Notes to Consolidated Financial Statements in Form 10-Q for the three months ended September 30, 2017, for further discussion.

29 *Summary Non-GAAP Financial Measures Cash available for distribution represents net 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, (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. Adjusted EBITDA represents net (loss) income 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. 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 performance. You should not consider adjusted EBITDA as an alternative to net loss, determined in accordance with U.S. GAAP. Adjustments from unconsolidated investments represent distributions received in excess of the carrying amount of our investment and suspended equity earnings, during periods of suspension of recognition of equity method earnings. We may suspend the recognition of equity method earnings when we receive distributions in excess of the carrying value of our investment. As we are not liable for the obligations of the investee nor otherwise committed to provide financial support, we record gains resulting from such excess distributions in the period the distributions occur. Additionally, when our carrying value in an unconsolidated investment is zero and we are not liable for the obligations of the investee nor otherwise committed to provide financial support, we will not recognize equity in earnings (losses) in other comprehensive income of unconsolidated investments. Adjusted EBITDA has limitations as an analytical tool. Some of 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. PAGE 29