UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 2, 2023
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
(Address of principal executive offices, including zip code)
(609 ) 608-1525
Registrant's telephone number, including area code
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 2.02 Results of Operations and Financial Condition
On November 2, 2023, Clearway Energy, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report on Form 8-K and is hereby incorporated by reference. In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 2.02 and in the attached exhibit are deemed to be furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Item 9.01 Financial Statements and Exhibits
(d)Exhibits
In accordance with General Instruction B.2 of Form 8-K, the information set forth in the attached exhibit is deemed to be furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.
| Exhibit Number | Document | |||||||
| 99.1 | ||||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Clearway Energy, Inc. | ||||||||
| (Registrant) | ||||||||
| By: | /s/ Kevin P. Malcarney | |||||||
| Kevin P. Malcarney | ||||||||
| General Counsel and Corporate Secretary | ||||||||
| Dated: November 2, 2023 | ||||||||
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Clearway Energy, Inc. Reports Third Quarter 2023 Financial Results
•Signed agreement with Clearway Group to commit to invest in the 452 MW Texas Solar Nova solar projects
•Received enhanced offer from Clearway Group to invest in Dan's Mountain Wind
•Received offer from Clearway Group to invest in 572 MW of solar plus storage projects
•Entered into new Resource Adequacy contracts for Marsh Landing and El Segundo
•Reiterating 2023 financial guidance range and initiating 2024 financial guidance
•Increasing the quarterly dividend by 2% to $0.3964 per share in the fourth quarter of 2023, or $1.5856 per share annualized. Achieved 8% dividend per share growth in 2023
•Continue to target annual dividend per share growth in the upper range of 5% to 8% through 2026
PRINCETON, NJ — November 2, 2023— Clearway Energy, Inc. (NYSE: CWEN, CWEN.A) today reported third quarter 2023 financial results, including Net Income of $15 million, Adjusted EBITDA of $323 million, Cash from Operating Activities of $287 million, and Cash Available for Distribution (CAFD) of $156 million.
"Clearway continues to expect 2023 full year results to be within the revised guidance range and has made further progress on executing toward its long-term objective to deliver at the upper range of its dividend growth target through 2026 without external debt or equity. With the commitment to invest in the Texas Solar Nova projects and the recent projects offered to CWEN, we now have full visibility into the deployment of the excess Thermal proceeds through commitments or offers. Importantly, the recent commitment and offers from our sponsor are at attractive economics and reflect the ability of the Clearway enterprise to adapt to the current capital markets environment,” said Christopher Sotos, Clearway Energy, Inc.’s President and Chief Executive Officer. “We are fortunate to have a sponsor who’s aligned with our disciplined capital allocation criteria. I remain confident that in partnership with our Board and sponsor, we can allocate capital to both drive CAFD per share growth and create long-term value creation for our investors.”
Adjusted EBITDA and Cash Available for Distribution used in this press release are non-GAAP measures and are explained in greater detail under “Non-GAAP Financial Information” below.
Overview of Financial and Operating Results
Segment Results
Table 1: Net Income/(Loss)
| ($ millions) | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
| Segment | 9/30/23 | 9/30/22 | 9/30/23 | 9/30/22 | ||||||||||||||||||||||
| Conventional | 38 | 41 | 99 | 121 | ||||||||||||||||||||||
| Renewables | 62 | 62 | 112 | 26 | ||||||||||||||||||||||
| Thermal | — | — | — | 17 | ||||||||||||||||||||||
Corporate | (85) | (41) | (152) | 950 | ||||||||||||||||||||||
| Net Income/(Loss) | $ | 15 | $ | 62 | $ | 59 | $ | 1,114 | ||||||||||||||||||
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Table 2: Adjusted EBITDA
| ($ millions) | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
| Segment | 9/30/23 | 9/30/22 | 9/30/23 | 9/30/22 | ||||||||||||||||||||||
| Conventional | 84 | 94 | 236 | 277 | ||||||||||||||||||||||
| Renewables | 246 | 236 | 645 | 675 | ||||||||||||||||||||||
| Thermal | — | — | — | 23 | ||||||||||||||||||||||
Corporate | (7) | (8) | (24) | (27) | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 323 | $ | 322 | $ | 857 | $ | 948 | ||||||||||||||||||
Table 3: Cash from Operating Activities and Cash Available for Distribution (CAFD)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| ($ millions) | 9/30/23 | 9/30/22 | 9/30/23 | 9/30/22 | ||||||||||||||||||||||
| Cash from Operating Activities | $ | 287 | $ | 328 | $ | 496 | $ | 607 | ||||||||||||||||||
| Cash Available for Distribution (CAFD) | $ | 156 | $ | 154 | $ | 289 | $ | 328 | ||||||||||||||||||
For the third quarter of 2023, the Company reported Net Income of $15 million, Adjusted EBITDA of $323 million, Cash from Operating Activities of $287 million, and CAFD of $156 million. Net Income decreased versus 2022 primarily due to non-cash tax expenses from allocations of taxable earnings and losses from HLBV method accounting. Adjusted EBITDA results in the third quarter were in-line with 2022 as lower renewable production at certain sites and the expiration of certain tolling agreements in the Conventional fleet was offset by the contribution of growth investments. CAFD results in the third quarter of 2023 were in-line with 2022 as lower renewable production at certain sites was offset by the contribution of growth investments.
Operational Performance
Table 4: Selected Operating Results1
| (MWh in thousands) | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
| 9/30/23 | 9/30/22 | 9/30/23 | 9/30/22 | |||||||||||||||||||||||
| Conventional Equivalent Availability Factor | 97.9 | % | 93.9 | % | 87.5 | % | 92.5 | % | ||||||||||||||||||
| Solar MWh generated/sold | 1,822 | 1,473 | 4,232 | 4,071 | ||||||||||||||||||||||
| Wind MWh generated/sold | 2,085 | 1,894 | 7,262 | 7,031 | ||||||||||||||||||||||
| Renewables generated/sold2 | 3,907 | 3,367 | 11,494 | 11,102 | ||||||||||||||||||||||
In the third quarter of 2023, availability at the Conventional segment was higher than the third quarter of 2022 primarily due to forced outages in 2022. Generation in the Renewables segment during the third quarter of 2023 was 16% higher than the third quarter of 2022 primarily due to the contribution of growth investments.
1 Excludes equity method investments
2 Generation sold excludes MWh that are reimbursable for economic curtailment
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Liquidity and Capital Resources
Table 5: Liquidity
| ($ millions) | 9/30/2023 | 12/31/2022 | ||||||||||||
| Cash and Cash Equivalents: | ||||||||||||||
| Clearway Energy, Inc. and Clearway Energy LLC, excluding subsidiaries | $ | 441 | $ | 536 | ||||||||||
| Subsidiaries | 125 | 121 | ||||||||||||
| Restricted Cash: | ||||||||||||||
| Operating accounts | 160 | 109 | ||||||||||||
| Reserves, including debt service, distributions, performance obligations and other reserves | 430 | 230 | ||||||||||||
| Total Cash | $ | 1,156 | $ | 996 | ||||||||||
| Revolving credit facility availability | 489 | 370 | ||||||||||||
| Total Liquidity | $ | 1,645 | $ | 1,366 | ||||||||||
Total liquidity as of September 30, 2023, was $1,645 million, which was $279 million higher than as of December 31, 2022, primarily due to the refinancing of the revolving credit facility which increased its total capacity to $700 million from $495 million and additional project level restricted cash associated with growth investments, partially offset by the execution of growth investments.
As of September 30, 2023, the Company's liquidity included $590 million of restricted cash. Restricted cash consists primarily of funds to satisfy the requirements of certain debt arrangements and funds held within the Company's projects that are restricted in their use. As of September 30, 2023, these restricted funds were comprised of $160 million designated to fund operating expenses, approximately $316 million designated for current debt service payments, and $85 million of reserves for debt service, performance obligations and other items including capital expenditures. The remaining $29 million is held in distribution reserve accounts.
Potential future sources of liquidity include excess operating cash flow, availability under the revolving credit facility, asset dispositions, and, subject to market conditions, new corporate debt and equity financings.
Growth Investments and Strategic Announcements
Texas Solar Nova 1 and Texas Solar Nova 2
On August 30, 2023, the Company, through an indirect subsidiary, entered into an agreement to acquire interests in Texas Solar Nova 1 and Texas Solar Nova 2, 452 MW of solar projects under construction in Kent County, Texas, upon the projects meeting certain milestones. Upon achieving commercial operations the projects are underpinned by power purchase agreements with creditworthy counterparties with a weighted average contract duration of approximately 18 years. The Company expects to invest approximately $40 million, subject to closing adjustments. Commercial operations of the facilities and the Company’s investment are expected to occur between the fourth quarter of 2023 and first half of 2024. The Company expects the projects to contribute asset CAFD on a five-year average annual basis of approximately $4 million beginning January 1, 2025.
Enhanced Offer to Invest in Dan's Mountain Wind
On October 16, 2023, Clearway Group provided an updated offer providing the Company the opportunity to own 100% cash equity interest in a 55 MW wind project located in Allegany County, Maryland that is expected to reach commercial operations in the first half of 2025. The potential corporate capital commitment for the investment is expected to be approximately $86 million. The investment is subject to negotiation, both with Clearway Group and the review and approval by the Company’s Independent Directors.
Offer to Invest in 572 MW of Solar Plus Storage Projects
On October 16, 2023, Clearway Group offered the Company opportunities to enter into partnership arrangements to own cash equity interests in 572 MW of solar plus storage projects that are expected to reach commercial operations in 2025. The
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potential corporate capital commitment for the investments are expected to be approximately $105 million. The investments are subject to negotiation both with Clearway Group, and the review and approval by the Company’s Independent Directors.
Resource Adequacy Agreements
During the third quarter, the Company signed contracts with California Load Serving Entities to sell Resource Adequacy for the following assets:
•Marsh Landing: The Company contracted with a load serving entity to sell approximately 400 MW of Resource Adequacy commencing September 2026 and ending December 2027. As of the end of the third quarter, 100% of Marsh Landing's net qualifying capacity is contracted through 2026. 63% of the project’s net qualifying capacity is contracted in 2027 at terms providing for higher project level CAFD in 2027 relative to current run-rate expectations.
•El Segundo: The Company contracted with a load serving entity to sell approximately 274 MW of Resource Adequacy commencing August 2026 and ending December 2027. As of the end of the third quarter, 100% of El Segundo's net qualifying capacity is contracted through 2026. Approximately 50% of the project’s net qualifying capacity is contracted in 2027 at terms providing for higher project level CAFD in 2027 relative to current run-rate expectations.
Quarterly Dividend
On November 1, 2023, Clearway Energy, Inc.’s Board of Directors declared a quarterly dividend on Class A and Class C common stock of $0.3964 per share payable on December 15, 2023, to stockholders of record as of December 1, 2023.
The Company anticipates that a portion of the dividends expected to be paid in 2023 and beyond may be treated as taxable for U.S. federal income tax purposes. The portion of dividends in future years that will be treated as taxable will depend upon a number of factors, including but not limited to, the Company’s overall performance and the gross amount of any dividends made to stockholders in 2023 and beyond.
Seasonality
Clearway Energy, Inc.’s quarterly operating results are impacted by seasonal factors, as well as weather variability which can impact renewable energy resource. Most of the Company's revenues are generated from the months of May through September, as contracted pricing and renewable resources are at their highest levels in the Company’s portfolio. Factors driving the fluctuation in Net Income, Adjusted EBITDA, Cash from Operating Activities, and CAFD include the following:
•Higher summer capacity and energy prices from conventional assets;
•Higher solar insolation during the summer months;
•Higher wind resources during the spring and summer months;
•Debt service payments which are made either quarterly or semi-annually;
•Timing of maintenance capital expenditures and the impact of both unforced and forced outages; and
•Timing of distributions from unconsolidated affiliates
The Company takes into consideration the timing of these factors to ensure sufficient funds are available for distributions and operating activities on a quarterly basis.
Financial Guidance
The Company is reiterating its 2023 full year CAFD guidance range of $330 million to $360 million.
The Company is initiating 2024 full year CAFD guidance of $395 million. The Company’s 2024 financial guidance factors in the contribution of committed growth investments based on current expected closing timelines. 2024 CAFD guidance does not factor in the timing of when CAFD is realized from new growth investments pursuant to 5-year averages beyond 2024. 2024 financial guidance is based on median renewable energy production estimates for the full year.
Earnings Conference Call
On November 2, 2023, Clearway Energy, Inc. will host a conference call at 8:00 a.m. Eastern to discuss these results. Investors, the news media and others may access the live webcast of the conference call and accompanying presentation
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materials by logging on to Clearway Energy, Inc.’s website at http://www.clearwayenergy.com and clicking on “Presentations & Webcasts” under “Investor Relations.”
About Clearway Energy, Inc.
Clearway Energy, Inc. is one of the largest renewable energy owners in the US with over 5,500 net MW of installed wind and solar generation projects. The Company's over 8,000 net MW of assets also include approximately 2,500 net MW of environmentally-sound, highly efficient natural gas generation facilities. Through this environmentally-sound diversified and primarily contracted portfolio, Clearway Energy endeavors to provide its investors with stable and growing dividend income. Clearway Energy, Inc.’s Class C and Class A common stock are traded on the New York Stock Exchange under the symbols CWEN and CWEN.A, respectively. Clearway Energy, Inc. is sponsored by its controlling investor, Clearway Energy Group LLC. For more information, visit investor.clearwayenergy.com.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, and typically can be identified by the use of words such as “expect,” “estimate,” "target," “anticipate,” “forecast,” “plan,” “outlook,” “believe” and similar terms. Such forward-looking statements include, but are not limited to, statements regarding, the Company’s dividend expectations and its operations, its facilities and its financial results, impacts related to COVID-19 (including any variant of the virus) or any other pandemic, statements regarding the
anticipated consummation of the transactions described above, the anticipated benefits, opportunities, and results with respect to the transactions, including the Company’s future relationship and arrangements with Global Infrastructure Partners, TotalEnergies, and Clearway Energy Group, as well as the Company's Net Income, Adjusted EBITDA, Cash from Operating Activities, Cash Available for Distribution, the Company’s future revenues, income, indebtedness, capital structure, strategy, plans, expectations, objectives, projected financial performance and/or business results and other future events, and views of economic and market conditions.
Although Clearway Energy, Inc. believes that the expectations are reasonable, it can give no assurance that these expectations will prove to be correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated above include, among others, the Company's ability to maintain and grow its quarterly dividend, impacts related to COVID-19 (including any variant of the virus) or any other pandemic, risks relating to the Company's relationships with its sponsors, the failure to identify, execute or successfully implement acquisitions or dispositions (including receipt of third party consents and regulatory approvals), the Company's ability to acquire assets from its sponsors, the Company’s ability to borrow additional funds and access capital markets due to its indebtedness, corporate structure, market conditions or otherwise, hazards customary in the power industry, weather conditions, including wind and solar performance, the Company’s ability to operate its businesses efficiently, manage maintenance capital expenditures and costs effectively, and generate earnings and cash flows from its asset-based businesses in relation to its debt and other obligations, the willingness and ability of counterparties to the Company’s offtake agreements to fulfill their obligations under such agreements, the Company's ability to enter into new contracts as existing contracts expire, changes in government regulations, operating and financial restrictions placed on the Company that are contained in the project-level debt facilities and other agreements of the Company and its subsidiaries, and cyber terrorism and inadequate cybersecurity. Furthermore, any dividends are subject to available capital, market conditions, and compliance with associated laws and regulations.
Clearway Energy, Inc. undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Cash Available for Distribution are estimates as of today’s date, November 2, 2023, and are based on assumptions believed to be reasonable as of this date. Clearway Energy, Inc. expressly disclaims any current intention to update such guidance. The foregoing review of factors that could cause Clearway Energy, Inc.’s actual results to differ materially from those contemplated in the forward-looking statements included in this news release should be considered in connection with information regarding risks and uncertainties that may affect Clearway Energy, Inc.’s future results included in Clearway Energy, Inc.’s filings with the Securities and Exchange Commission at www.sec.gov. In addition, Clearway Energy, Inc. makes available free of charge at www.clearwayenergy.com, copies of materials it files with, or furnishes to, the Securities and Exchange Commission.
# # #
Contacts:
Investors: Media:
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Akil Marsh Zadie Oleksiw
investor.relations@clearwayenergy.com media@clearwayenergy.com
609-608-1500 202-836-5754
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CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (In millions, except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Operating Revenues | |||||||||||||||||||||||
| Total operating revenues | $ | 371 | $ | 340 | $ | 1,065 | $ | 922 | |||||||||||||||
| Operating Costs and Expenses | |||||||||||||||||||||||
| Cost of operations, exclusive of depreciation, amortization and accretion shown separately below | 134 | 98 | 360 | 338 | |||||||||||||||||||
| Depreciation, amortization and accretion | 133 | 129 | 389 | 379 | |||||||||||||||||||
| General and administrative | 9 | 8 | 28 | 31 | |||||||||||||||||||
| Transaction and integration costs | 1 | — | 3 | 5 | |||||||||||||||||||
| Development costs | — | — | — | 2 | |||||||||||||||||||
| Total operating costs and expenses | 277 | 235 | 780 | 755 | |||||||||||||||||||
| Gain on sale of business | — | — | — | 1,291 | |||||||||||||||||||
| Operating Income | 94 | 105 | 285 | 1,458 | |||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | 11 | 14 | 11 | 28 | |||||||||||||||||||
| Other income, net | 15 | 5 | 32 | 10 | |||||||||||||||||||
| Loss on debt extinguishment | — | — | — | (2) | |||||||||||||||||||
| Interest expense | (48) | (49) | (202) | (143) | |||||||||||||||||||
| Total other expense, net | (22) | (30) | (159) | (107) | |||||||||||||||||||
| Income Before Income Taxes | 72 | 75 | 126 | 1,351 | |||||||||||||||||||
| Income tax expense | 57 | 13 | 67 | 237 | |||||||||||||||||||
| Net Income | 15 | 62 | 59 | 1,114 | |||||||||||||||||||
| Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interests | 11 | 30 | 17 | 544 | |||||||||||||||||||
Net Income Attributable to Clearway Energy, Inc. | $ | 4 | $ | 32 | $ | 42 | $ | 570 | |||||||||||||||
Earnings Per Share Attributable to Clearway Energy, Inc. Class A and Class C Common Stockholders | |||||||||||||||||||||||
Weighted average number of Class A common shares outstanding - basic and diluted | 35 | 35 | 35 | 35 | |||||||||||||||||||
Weighted average number of Class C common shares outstanding - basic and diluted | 82 | 82 | 82 | 82 | |||||||||||||||||||
Earnings Per Weighted Average Class A and Class C Common Share - Basic and Diluted | $ | 0.03 | $ | 0.28 | $ | 0.36 | $ | 4.89 | |||||||||||||||
| Dividends Per Class A Common Share | $ | 0.3891 | $ | 0.3604 | $ | 1.1454 | $ | 1.0608 | |||||||||||||||
| Dividends Per Class C Common Share | $ | 0.3891 | $ | 0.3604 | $ | 1.1454 | $ | 1.0608 | |||||||||||||||
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CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (In millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Net Income | $ | 15 | $ | 62 | $ | 59 | $ | 1,114 | |||||||||||||||
| Other Comprehensive Income | |||||||||||||||||||||||
| Unrealized gain on derivatives and changes in accumulated OCI/OCL, net of income tax expense, of $1, $3, $1 and $6 | 8 | 11 | 8 | 31 | |||||||||||||||||||
| Other comprehensive income | 8 | 11 | 8 | 31 | |||||||||||||||||||
| Comprehensive Income | 23 | 73 | 67 | 1,145 | |||||||||||||||||||
| Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interests | 17 | 37 | 23 | 563 | |||||||||||||||||||
| Comprehensive Income Attributable to Clearway Energy, Inc. | $ | 6 | $ | 36 | $ | 44 | $ | 582 | |||||||||||||||
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CLEARWAY ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
| (In millions, except shares) | September 30, 2023 | December 31, 2022 | |||||||||
| ASSETS | (Unaudited) | ||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 566 | $ | 657 | |||||||
| Restricted cash | 590 | 339 | |||||||||
| Accounts receivable — trade | 196 | 153 | |||||||||
| Inventory | 55 | 47 | |||||||||
| Derivative instruments | 51 | 26 | |||||||||
| Note receivable — affiliate | 215 | — | |||||||||
| Prepayments and other current assets | 61 | 54 | |||||||||
| Total current assets | 1,734 | 1,276 | |||||||||
| Property, plant and equipment, net | 8,025 | 7,421 | |||||||||
| Other Assets | |||||||||||
| Equity investments in affiliates | 373 | 364 | |||||||||
| Intangible assets for power purchase agreements, net | 2,352 | 2,488 | |||||||||
| Other intangible assets, net | 72 | 77 | |||||||||
| Derivative instruments | 132 | 63 | |||||||||
| Right-of-use assets, net | 569 | 527 | |||||||||
| Other non-current assets | 113 | 96 | |||||||||
| Total other assets | 3,611 | 3,615 | |||||||||
| Total Assets | $ | 13,370 | $ | 12,312 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Current portion of long-term debt | $ | 522 | $ | 322 | |||||||
| Accounts payable — trade | 73 | 55 | |||||||||
| Accounts payable — affiliates | 72 | 22 | |||||||||
| Derivative instruments | 54 | 50 | |||||||||
| Accrued interest expense | 41 | 54 | |||||||||
| Accrued expenses and other current liabilities | 82 | 114 | |||||||||
| Total current liabilities | 844 | 617 | |||||||||
| Other Liabilities | |||||||||||
| Long-term debt | 6,995 | 6,491 | |||||||||
| Deferred income taxes | 152 | 119 | |||||||||
| Derivative instruments | 271 | 303 | |||||||||
| Long-term lease liabilities | 601 | 548 | |||||||||
| Other non-current liabilities | 239 | 201 | |||||||||
| Total other liabilities | 8,258 | 7,662 | |||||||||
| Total Liabilities | 9,102 | 8,279 | |||||||||
| Redeemable noncontrolling interest in subsidiaries | 18 | 7 | |||||||||
| Commitments and Contingencies | |||||||||||
| Stockholders’ Equity | |||||||||||
| Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued | — | — | |||||||||
| Class A, Class B, Class C and Class D common stock, $0.01 par value; 3,000,000,000 shares authorized (Class A 500,000,000, Class B 500,000,000, Class C 1,000,000,000, Class D 1,000,000,000); 202,075,237 shares issued and outstanding (Class A 34,613,853, Class B 42,738,750, Class C 82,385,884, Class D 42,336,750) at September 30, 2023 and 201,972,813 shares issued and outstanding (Class A 34,613,853, Class B 42,738,750, Class C 82,283,460, Class D 42,336,750) at December 31, 2022 | 1 | 1 | |||||||||
| Additional paid-in capital | 1,728 | 1,761 | |||||||||
| Retained earnings | 370 | 463 | |||||||||
| Accumulated other comprehensive income | 11 | 9 | |||||||||
| Noncontrolling interest | 2,140 | 1,792 | |||||||||
| Total Stockholders’ Equity | 4,250 | 4,026 | |||||||||
| Total Liabilities and Stockholders’ Equity | 13,370 | 12,312 | |||||||||
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CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine months ended September 30, | |||||||||||
| (In millions) | 2023 | 2022 | |||||||||
| Cash Flows from Operating Activities | |||||||||||
| Net Income | $ | 59 | $ | 1,114 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Equity in earnings of unconsolidated affiliates | (11) | (28) | |||||||||
| Distributions from unconsolidated affiliates | 17 | 25 | |||||||||
| Depreciation, amortization and accretion | 389 | 379 | |||||||||
| Amortization of financing costs and debt discounts | 9 | 10 | |||||||||
| Amortization of intangibles | 139 | 123 | |||||||||
| Loss on debt extinguishment | — | 2 | |||||||||
| Gain on sale of business | — | (1,291) | |||||||||
| Reduction in carrying amount of right-of-use assets | 11 | 10 | |||||||||
| Changes in deferred income taxes | 49 | 207 | |||||||||
| Changes in derivative instruments and amortization of accumulated OCI/OCL | (64) | 77 | |||||||||
| Cash used in changes in other working capital: | |||||||||||
| Changes in prepaid and accrued liabilities for tolling agreements | (23) | 24 | |||||||||
| Changes in other working capital | (79) | (45) | |||||||||
| Net Cash Provided by Operating Activities | 496 | 607 | |||||||||
| Cash Flows from Investing Activities | |||||||||||
| Acquisition of Drop Down Assets, net of cash acquired | 100 | (51) | |||||||||
| Acquisition of Capistrano Wind Portfolio, net of cash acquired | — | (223) | |||||||||
| Increase in note receivable — affiliate | (215) | — | |||||||||
| Capital expenditures | (143) | (95) | |||||||||
| Return of investment from unconsolidated affiliates | 14 | 12 | |||||||||
| Investments in unconsolidated affiliates | (28) | — | |||||||||
| Proceeds from sale of business | — | 1,457 | |||||||||
| Other | 1 | — | |||||||||
| Net Cash (Used in) Provided by Investing Activities | (271) | 1,100 | |||||||||
| Cash Flows from Financing Activities | |||||||||||
| Contributions from (distributions to) noncontrolling interests, net | 294 | (14) | |||||||||
| Payments of dividends and distributions | (231) | (214) | |||||||||
| Distributions to CEG of escrowed amounts | — | (64) | |||||||||
| Tax-related distributions | (21) | (8) | |||||||||
| Proceeds from the revolving credit facility | — | 80 | |||||||||
| Payments for the revolving credit facility | — | (325) | |||||||||
| Proceeds from the issuance of long-term debt | 293 | 219 | |||||||||
| Payments of debt issuance costs | (14) | (4) | |||||||||
| Payments for long-term debt | (384) | (868) | |||||||||
| Other | (2) | (7) | |||||||||
| Net Cash Used in Financing Activities | (65) | (1,205) | |||||||||
| Net Increase in Cash, Cash Equivalents and Restricted Cash | 160 | 502 | |||||||||
| Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 996 | 654 | |||||||||
| Cash, Cash Equivalents and Restricted Cash at End of Period | $ | 1,156 | $ | 1,156 | |||||||
10
CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Nine Months Ended September 30, 2023
(Unaudited)
| (In millions) | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||
| Balances at December 31, 2022 | $ | — | $ | 1 | $ | 1,761 | $ | 463 | $ | 9 | $ | 1,792 | $ | 4,026 | |||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (43) | (43) | ||||||||||||||||||||||||||||||||||
| Unrealized loss on derivatives and changes in accumulated OCI, net of tax | — | — | — | — | (1) | (2) | (3) | ||||||||||||||||||||||||||||||||||
| Contributions from CEG, net of distributions, cash | — | — | — | — | — | 30 | 30 | ||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests, net of distributions, cash | — | — | — | — | — | 215 | 215 | ||||||||||||||||||||||||||||||||||
| Transfers of assets under common control | — | — | (52) | — | — | 46 | (6) | ||||||||||||||||||||||||||||||||||
| Non-cash adjustments for change in tax basis | — | — | 9 | — | — | — | 9 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||||||
| Common stock dividends and distributions to CEG unit holders | — | — | — | (44) | — | (32) | (76) | ||||||||||||||||||||||||||||||||||
| Balances at March 31, 2023 | — | 1 | 1,719 | 419 | 8 | 2,006 | 4,153 | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | 38 | — | 40 | 78 | ||||||||||||||||||||||||||||||||||
| Unrealized gain on derivatives and changes in accumulated OCI, net of tax | — | — | — | — | 1 | 2 | 3 | ||||||||||||||||||||||||||||||||||
| Distributions to CEG, net of contributions, cash | — | — | — | — | — | (4) | (4) | ||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests, net of contributions, cash | — | — | — | — | — | (5) | (5) | ||||||||||||||||||||||||||||||||||
| Tax-related distributions | — | — | — | — | — | (19) | (19) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | (1) | — | — | — | (1) | ||||||||||||||||||||||||||||||||||
| Common stock dividends and distributions to CEG unit holders | — | — | — | (45) | — | (32) | (77) | ||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||
| Balances at June 30, 2023 | — | 1 | 1,718 | 412 | 9 | 1,987 | 4,127 | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | 4 | — | 6 | 10 | ||||||||||||||||||||||||||||||||||
| Unrealized gain on derivatives and changes in accumulated OCI, net of tax | — | — | — | — | 2 | 6 | 8 | ||||||||||||||||||||||||||||||||||
| Distributions to CEG, cash | — | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests, net of distributions, cash | — | — | — | — | — | 12 | 12 | ||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests, non-cash | — | — | — | — | — | (7) | (7) | ||||||||||||||||||||||||||||||||||
| Tax-related distributions | — | — | — | — | — | (2) | (2) | ||||||||||||||||||||||||||||||||||
| Transfer of assets under common control | — | — | — | — | — | 171 | 171 | ||||||||||||||||||||||||||||||||||
| Non-cash adjustments for change in tax basis | — | — | 8 | — | — | — | 8 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 2 | (1) | — | — | 1 | ||||||||||||||||||||||||||||||||||
| Common stock dividends and distributions to CEG unit holders | — | — | — | (45) | — | (33) | (78) | ||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||||||||||||
| Balances at September 30, 2023 | $ | — | $ | 1 | $ | 1,728 | $ | 370 | $ | 11 | $ | 2,140 | $ | 4,250 | |||||||||||||||||||||||||||
11
CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Nine Months Ended September 30, 2022
(Unaudited)
| (In millions) | Preferred Stock | Common Stock | Additional Paid-In Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||
| Balances at December 31, 2021 | $ | — | $ | 1 | $ | 1,872 | $ | (33) | $ | (6) | $ | 1,466 | $ | 3,300 | |||||||||||||||||||||||||||
| Net loss | — | — | — | (32) | — | (67) | (99) | ||||||||||||||||||||||||||||||||||
| Unrealized gain on derivatives and changes in accumulated OCI, net of tax | — | — | — | — | 6 | 8 | 14 | ||||||||||||||||||||||||||||||||||
| Distributions to CEG, net of contributions, cash | — | — | — | — | — | (3) | (3) | ||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests, net of distributions, cash | — | — | — | — | — | 28 | 28 | ||||||||||||||||||||||||||||||||||
| Transfers of assets under common control | — | — | (12) | — | — | (25) | (37) | ||||||||||||||||||||||||||||||||||
| Non-cash adjustments for change in tax basis | — | — | 8 | — | — | — | 8 | ||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | (2) | — | — | — | (2) | ||||||||||||||||||||||||||||||||||
| Common stock dividends and distributions to CEG unit holders | — | — | (40) | — | — | (30) | (70) | ||||||||||||||||||||||||||||||||||
| Balances at March 31, 2022 | — | 1 | 1,826 | (65) | — | 1,377 | 3,139 | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | 570 | — | 575 | 1,145 | ||||||||||||||||||||||||||||||||||
| Unrealized gain on derivatives and changes in accumulated OCI, net of tax | — | — | — | — | 2 | 4 | 6 | ||||||||||||||||||||||||||||||||||
| Distributions to CEG, net of contributions, cash | — | — | — | — | — | (20) | (20) | ||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests, net of contributions, cash | — | — | — | — | — | (10) | (10) | ||||||||||||||||||||||||||||||||||
| Non-cash adjustments for change in tax basis | — | — | (1) | — | — | — | (1) | ||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||||||
| Common stock dividends and distributions to CEG unit holders | — | — | (41) | — | — | (30) | (71) | ||||||||||||||||||||||||||||||||||
| Balances at June 30, 2022 | $ | — | $ | 1 | $ | 1,785 | $ | 505 | $ | 2 | $ | 1,896 | $ | 4,189 | |||||||||||||||||||||||||||
| Net income | — | — | — | 32 | — | 27 | 59 | ||||||||||||||||||||||||||||||||||
| Unrealized gain on derivatives and changes in accumulated OCI, net of tax | — | — | — | — | 4 | 7 | 11 | ||||||||||||||||||||||||||||||||||
| Distributions to CEG, non-cash | — | — | — | — | — | (4) | (4) | ||||||||||||||||||||||||||||||||||
| Contributions from CEG, net of distributions, cash | — | — | — | — | — | 7 | 7 | ||||||||||||||||||||||||||||||||||
| Tax-related distributions | — | — | — | — | — | (8) | (8) | ||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests, net of contributions, cash | — | — | — | — | — | (14) | (14) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 1 | (1) | — | — | — | ||||||||||||||||||||||||||||||||||
| Capistrano Wind Portfolio Acquisition | — | — | — | — | 4 | 7 | 11 | ||||||||||||||||||||||||||||||||||
| Kawailoa Sale to Clearway Renew LLC | — | — | — | — | — | (69) | (69) | ||||||||||||||||||||||||||||||||||
| Common stock dividends and distributions to CEG unit holders | — | — | — | (42) | — | (31) | (73) | ||||||||||||||||||||||||||||||||||
| Balances at September 30, 2022 | $ | — | $ | 1 | $ | 1,786 | $ | 494 | $ | 10 | $ | 1,818 | $ | 4,109 | |||||||||||||||||||||||||||
12
Appendix Table A-1: Three Months Ended September 30, 2023, Segment Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):
| ($ in millions) | Conventional | Renewables | Thermal | Corporate | Total | |||||||||||||||||||||||||||
| Net Income (Loss) | $ | 38 | $ | 62 | $ | — | $ | (85) | $ | 15 | ||||||||||||||||||||||
| Plus: | ||||||||||||||||||||||||||||||||
| Income Tax Expense | — | — | — | 57 | 57 | |||||||||||||||||||||||||||
| Interest Expense, net | 7 | 8 | — | 19 | 34 | |||||||||||||||||||||||||||
| Depreciation, Amortization, and ARO | 33 | 100 | — | — | 133 | |||||||||||||||||||||||||||
Contract Amortization | 5 | 42 | — | — | 47 | |||||||||||||||||||||||||||
| Mark to Market (MtM) (Gain)/Loss on economic hedges | (3) | 21 | — | — | 18 | |||||||||||||||||||||||||||
| Transaction and integration costs | — | — | — | 1 | 1 | |||||||||||||||||||||||||||
| Other non-recurring | 1 | — | — | — | 1 | |||||||||||||||||||||||||||
| Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates | 3 | 13 | — | — | 16 | |||||||||||||||||||||||||||
Non-Cash Equity Compensation | — | — | — | 1 | 1 | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 84 | $ | 246 | $ | — | $ | (7) | $ | 323 | ||||||||||||||||||||||
Appendix Table A-2: Three Months Ended September 30, 2022, Segment Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):
| ($ in millions) | Conventional | Renewables | Thermal | Corporate | Total | |||||||||||||||||||||||||||
| Net Income (Loss) | $ | 41 | $ | 62 | $ | — | $ | (41) | $ | 62 | ||||||||||||||||||||||
| Plus: | ||||||||||||||||||||||||||||||||
| Income Tax Expense | — | — | — | 13 | 13 | |||||||||||||||||||||||||||
| Interest Expense, net | 11 | 14 | — | 20 | 45 | |||||||||||||||||||||||||||
| Depreciation, Amortization, and ARO | 33 | 96 | — | — | 129 | |||||||||||||||||||||||||||
Contract Amortization | 6 | 36 | — | — | 42 | |||||||||||||||||||||||||||
| Mark to Market (MtM) (Gain)/Loss on economic hedges | — | 17 | — | — | 17 | |||||||||||||||||||||||||||
| Other non-recurring | — | 1 | — | — | 1 | |||||||||||||||||||||||||||
Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates | 3 | 10 | — | — | 13 | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 94 | $ | 236 | $ | — | $ | (8) | $ | 322 | ||||||||||||||||||||||
13
Appendix Table A-3: Nine Months Ended September 30, 2023, Segment Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):
| ($ in millions) | Conventional | Renewables | Thermal | Corporate | Total | |||||||||||||||||||||||||||
| Net Income (Loss) | $ | 99 | $ | 112 | $ | — | $ | (152) | $ | 59 | ||||||||||||||||||||||
| Plus: | ||||||||||||||||||||||||||||||||
| Income Tax Expense | — | — | — | 67 | 67 | |||||||||||||||||||||||||||
| Interest Expense, net | 24 | 91 | — | 55 | 170 | |||||||||||||||||||||||||||
| Depreciation, Amortization, and ARO | 98 | 291 | — | — | 389 | |||||||||||||||||||||||||||
Contract Amortization | 16 | 125 | — | — | 141 | |||||||||||||||||||||||||||
| Mark to Market (MtM) (Gain)/Loss on economic hedges | (3) | (24) | — | — | (27) | |||||||||||||||||||||||||||
Transaction and Integration costs | — | — | — | 3 | 3 | |||||||||||||||||||||||||||
| Other Non-recurring | (7) | 5 | — | — | (2) | |||||||||||||||||||||||||||
Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates | 9 | 45 | — | — | 54 | |||||||||||||||||||||||||||
Non-Cash Equity Compensation | — | — | — | 3 | 3 | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 236 | $ | 645 | $ | — | $ | (24) | $ | 857 | ||||||||||||||||||||||
Appendix Table A-4: Nine Months Ended September 30, 2022, Segment Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):
| ($ in millions) | Conventional | Renewables | Thermal | Corporate | Total | |||||||||||||||||||||||||||
| Net Income (Loss) | $ | 121 | $ | 26 | $ | 17 | $ | 950 | $ | 1,114 | ||||||||||||||||||||||
| Plus: | ||||||||||||||||||||||||||||||||
| Income Tax Expense | — | — | — | 237 | 237 | |||||||||||||||||||||||||||
| Interest Expense, net | 29 | 32 | 6 | 70 | 137 | |||||||||||||||||||||||||||
| Depreciation, Amortization, and ARO | 99 | 280 | — | — | 379 | |||||||||||||||||||||||||||
Contract Amortization | 18 | 107 | — | — | 125 | |||||||||||||||||||||||||||
Loss on Debt Extinguishment | — | 2 | — | — | 2 | |||||||||||||||||||||||||||
| Mark to Market (MtM) (Gain)/Loss on economic hedges | — | 195 | — | — | 195 | |||||||||||||||||||||||||||
Transaction and Integration costs | — | — | — | 5 | 5 | |||||||||||||||||||||||||||
| Other Non-recurring | 1 | 1 | — | (1,291) | (1,289) | |||||||||||||||||||||||||||
Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates | 9 | 32 | — | — | 41 | |||||||||||||||||||||||||||
Non-Cash Equity Compensation | — | — | — | 2 | 2 | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 277 | $ | 675 | $ | 23 | $ | (27) | $ | 948 | ||||||||||||||||||||||
14
Appendix Table A-5: Cash Available for Distribution Reconciliation
The following table summarizes the calculation of Cash Available for Distribution and provides a reconciliation to Cash from Operating Activities:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| ($ in millions) | 9/30/23 | 9/30/22 | 9/30/23 | 9/30/22 | |||||||||||||||||||
| Adjusted EBITDA | $ | 323 | $ | 322 | $ | 857 | $ | 948 | |||||||||||||||
| Cash interest paid | (89) | (95) | (237) | (254) | |||||||||||||||||||
| Changes in prepaid and accrued liabilities for tolling agreements | 33 | 98 | (23) | 24 | |||||||||||||||||||
| Adjustments to reflect sale-type leases and payments for lease expenses | 2 | 1 | 5 | 4 | |||||||||||||||||||
| Pro-rata Adjusted EBITDA from unconsolidated affiliates | (28) | (28) | (64) | (69) | |||||||||||||||||||
| Distributions from unconsolidated affiliates | 6 | 8 | 17 | 25 | |||||||||||||||||||
| Changes in working capital and other | 40 | 22 | (59) | (71) | |||||||||||||||||||
| Cash from Operating Activities | 287 | 328 | 496 | 607 | |||||||||||||||||||
| Changes in working capital and other | (40) | (22) | 59 | 71 | |||||||||||||||||||
| Development Expenses3 | — | — | — | 2 | |||||||||||||||||||
| Return of investment from unconsolidated affiliates | 4 | 6 | 14 | 12 | |||||||||||||||||||
| Net contributions (to)/from non-controlling interest4 | (8) | (12) | (28) | (32) | |||||||||||||||||||
| Maintenance capital expenditures | (9) | (4) | (22) | (16) | |||||||||||||||||||
| Principal amortization of indebtedness5 | (78) | (147) | (230) | (321) | |||||||||||||||||||
| Cash Available for Distribution before Adjustments | $ | 156 | $ | 149 | $ | 289 | $ | 323 | |||||||||||||||
| 2022 Net Impact of Capistrano given timing of project debt service | — | 5 | — | 5 | |||||||||||||||||||
| Cash Available for Distribution6 | $ | 156 | $ | 154 | $ | 289 | $ | 328 | |||||||||||||||
3 Primarily related to Thermal Development Expenses
4 2023 excludes $250 million of net contributions related to the funding of Rosamond Central Battery Storage, Waiawa, and Daggett; 2022 excludes $50 million of contributions related to the funding of Mesquite Sky, Black Rock, and Mililani and $2 million of distributions related to release of inverter reserves at Agua Caliente
5 2023 excludes $130 million for the repayment of construction loans in connection with Waiawa and Daggett, and $24 million for the repayment of balloon at Walnut Creek Holdings; 2022 excludes $660 million for the repayment of the Bridge Loan Facility and revolver payments, $186 million for the refinancing of Tapestry Wind, Laredo Ridge, and Viento, and $27 million for the repayment of bridge loans in connection with Mililani
6 Excludes income tax payments related to Thermal sale
15
Appendix Table A-6: Nine Months Ended September 30, 2023, Sources and Uses of Liquidity
The following table summarizes the sources and uses of liquidity in 2023:
| Nine Months Ended | ||||||||
| ($ in millions) | 9/30/23 | |||||||
| Sources: | ||||||||
| Net cash provided by operating activities | 496 | |||||||
| Contributions from (distributions to) noncontrolling interests, net | 294 | |||||||
| Proceeds from issuance of long-term debt | 293 | |||||||
| Acquisition of Drop Down Assets, net of cash acquired | 100 | |||||||
| Return of investment from unconsolidated affiliates | 14 | |||||||
| Uses: | ||||||||
| Payments for long-term debt | (384) | |||||||
| Payments of dividends and distributions | (231) | |||||||
| Increase in note receivable — affiliate | (215) | |||||||
| Capital expenditures | (143) | |||||||
| Other net cash outflows | (64) | |||||||
| Change in total cash, cash equivalents, and restricted cash | $ | 160 | ||||||
16
Appendix Table A-7: Adjusted EBITDA and Cash Available for Distribution Guidance
| ($ in millions) | 2023 Full Year Guidance | 2024 Full Year Guidance | ||||||
| Net Income | 95 - 120 | 90 | ||||||
Income Tax Expense | 20 - 25 | 20 | ||||||
Interest Expense, net | 300 | 330 | ||||||
Depreciation, Amortization, and ARO Expense | 620 | 680 | ||||||
| Adjustment to reflect CWEN share of Adjusted EBITDA in unconsolidated affiliates | 50 | 50 | ||||||
| Non-Cash Equity Compensation | 5 | 5 | ||||||
| Adjusted EBITDA | 1,090 - 1,120 | 1,175 | ||||||
Cash interest paid | (300) | (310) | ||||||
Changes in prepaid and accrued liabilities for tolling agreements | (32) | (5) | ||||||
| Adjustments to reflect sale-type leases and payments for lease expenses | 10 | 10 | ||||||
Pro-rata Adjusted EBITDA from unconsolidated affiliates | (85) | (85) | ||||||
| Cash distributions from unconsolidated affiliates7 | 45 | 45 | ||||||
| Cash from Operating Activities | 728 - 758 | 830 | ||||||
| Net distributions to non-controlling interest8 | (60) | (100) | ||||||
Maintenance capital expenditures | (35) | (40) | ||||||
Principal amortization of indebtedness9 | (303) | (295) | ||||||
| Cash Available for Distribution10 | 330 - 360 | 395 | ||||||
Appendix Table A-8: Adjusted EBITDA and Cash Available for Distribution Growth Projects
| ($ in millions) | Texas Solar Nova 1&2 5 Year Ave. 2025-2029 | |||||||
| Net Income | — | |||||||
| Interest Expense, net | 9 | |||||||
| Depreciation, Amortization, and ARO Expense | 16 | |||||||
| Adjusted EBITDA | 25 | |||||||
| Cash interest paid | (9) | |||||||
| Cash from Operating Activities | 16 | |||||||
| Net distributions (to)/from non-controlling interest | (5) | |||||||
| Principal amortization of indebtedness | (7) | |||||||
| Estimated Cash Available for Distribution | 4 | |||||||
7 Distribution from unconsolidated affiliates can be classified as Return of Investment on Unconsolidated Affiliates when actuals are reported. This is below cash from operating activities
8 Includes tax equity proceeds and distributions to tax equity partners
9 2023 excludes balloon maturity payments; 2024 maturities assumed to be refinanced
10 Excludes income tax payments related to Thermal sale
17
Non-GAAP Financial Information
EBITDA and Adjusted EBITDA
EBITDA, Adjusted EBITDA, and Cash Available for Distribution (CAFD) are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. The presentation of non-GAAP financial measures should not be construed as an inference that Clearway Energy’s future results will be unaffected by unusual or non-recurring items.
EBITDA represents net income before interest (including loss on debt extinguishment), taxes, depreciation and amortization. EBITDA is presented because Clearway Energy considers it an important supplemental measure of its performance and believes debt and equity holders frequently use EBITDA to analyze operating performance and debt service capacity. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:
•EBITDA does not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments;
•EBITDA does not reflect changes in, or cash requirements for, working capital needs;
•EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and
•Other companies in this industry may calculate EBITDA differently than Clearway Energy does, limiting its usefulness as a comparative measure.
Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to use to invest in the growth of Clearway Energy’s business. Clearway Energy compensates for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA only supplementally. See the statements of cash flow included in the financial statements that are a part of this news release.
Adjusted EBITDA is presented as a further supplemental measure of operating performance. Adjusted EBITDA represents EBITDA adjusted for mark-to-market gains or losses, non-cash equity compensation expense, asset write offs and impairments; and factors which we do not consider indicative of future operating performance such as transition and integration related costs. The reader is encouraged to evaluate each adjustment and the reasons Clearway Energy considers it appropriate for supplemental analysis. As an analytical tool, Adjusted EBITDA is subject to all of the limitations applicable to EBITDA. In addition, in evaluating Adjusted EBITDA, the reader should be aware that in the future Clearway Energy may incur expenses similar to the adjustments in this news release.
Management believes Adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. This measure is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.
Additionally, Management believes that investors commonly adjust EBITDA information to eliminate the effect of restructuring and other expenses, which vary widely from company to company and impair comparability. As we define it, Adjusted EBITDA represents EBITDA adjusted for the effects of impairment losses, gains or losses on sales, non-cash equity compensation expense, dispositions or retirements of assets, any mark-to-market gains or losses from accounting for derivatives, adjustments to exclude gains or losses on the repurchase, modification or extinguishment of debt, and any extraordinary, unusual or non-recurring items plus adjustments to reflect the Adjusted EBITDA from our unconsolidated investments. We adjust for these items in our Adjusted EBITDA as our management believes that these items would distort their ability to efficiently view and assess our core operating trends.
In summary, our management uses Adjusted EBITDA as a measure of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations, and in communications with our Board of Directors, shareholders, creditors, analysts and investors concerning our financial performance.
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Cash Available for Distribution
A non-GAAP measure, Cash Available for Distribution is defined as of September 30, 2023 as Adjusted EBITDA plus cash distributions/return of investment from unconsolidated affiliates, cash receipts from notes receivable, cash distributions from noncontrolling interests, adjustments to reflect sales-type lease cash payments and payments for lease expenses, less cash distributions to noncontrolling interests, maintenance capital expenditures, pro-rata Adjusted EBITDA from unconsolidated affiliates, cash interest paid, income taxes paid, principal amortization of indebtedness, changes in prepaid and accrued capacity payments, and adjusted for development expenses. Management believes CAFD is a relevant supplemental measure of the Company’s ability to earn and distribute cash returns to investors.
We believe CAFD is useful to investors in evaluating our operating performance because securities analysts and other interested parties use such calculations as a measure of our ability to make quarterly distributions. In addition, CAFD is used by our management team for determining future acquisitions and managing our growth. The GAAP measure most directly comparable to CAFD is cash provided by operating activities.
However, CAFD has limitations as an analytical tool because it does not include changes in operating assets and liabilities 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. CAFD is a non-GAAP measure and should not be considered an alternative to cash provided by operating activities or any other performance or liquidity measure determined in accordance with GAAP, nor is it indicative of funds available to fund our cash needs. In addition, our calculations of CAFD are not necessarily comparable to CAFD as calculated by other companies. Investors should not rely on these measures as a substitute for any GAAP measure, including cash provided by operating activities.
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