Clearway Energy, Inc. [CWEN] Filings

10-Q 1 cwen-20240630.htm 10-Q cwen-20240630

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2024


☐			Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 001-36002

Clearway Energy, Inc.

(Exact name of registrant as specified in its charter)


Delaware			46-1777204
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

300 Carnegie Center, Suite 300	Princeton	New Jersey	08540
(Address of principal executive offices)			(Zip Code)

(609) 608-1525

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.01	CWEN.A	New York Stock Exchange
Class C Common Stock, par value $0.01	CWEN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of July 29, 2024, there were 34,613,853 shares of Class A common stock outstanding, par value $0.01 per share, 42,738,750 shares of Class B common stock outstanding, par value $0.01 per share, 82,829,344 shares of Class C common stock outstanding, par value $0.01 per share, and 41,961,750 shares of Class D common stock outstanding, par value $0.01 per share.

TABLE OF CONTENTS

Index


CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION			3
GLOSSARY OF TERMS			4
PART I — FINANCIAL INFORMATION			6
ITEM 1 — FINANCIAL STATEMENTS AND NOTES			6
ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			33
ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			51
ITEM 4 — CONTROLS AND PROCEDURES			52
PART II — OTHER INFORMATION			53
ITEM 1 — LEGAL PROCEEDINGS			53
ITEM 1A — RISK FACTORS			53
ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			53
ITEM 3 — DEFAULTS UPON SENIOR SECURITIES			53
ITEM 4 — MINE SAFETY DISCLOSURES			53
ITEM 5 — OTHER INFORMATION			53
ITEM 6 — EXHIBITS			54
SIGNATURES			55

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q of Clearway Energy, Inc., together with its consolidated subsidiaries, or the Company, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The words “believes,” “projects,” “anticipates,” “plans,” “expects,” “intends,” “estimates” and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors, risks and uncertainties include the factors described under Item 1A — Risk Factors in Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as well as the following:

•The Company’s ability to maintain and grow its quarterly dividend;

•Potential risks related to the Company's relationships with CEG and its owners;

•The Company’s ability to successfully identify, evaluate and consummate acquisitions from, and dispositions to, third parties;

•The Company’s ability to acquire assets from CEG;

•The Company’s ability to borrow additional funds and access capital markets, as well as the Company’s substantial indebtedness and the possibility that the Company may incur additional indebtedness going forward;

•Changes in law, including judicial decisions;

•Hazards customary to the power production industry and power generation operations such as fuel and electricity price volatility, unusual weather conditions (including wind and solar conditions), catastrophic weather-related or other damage to facilities, unscheduled generation outages, maintenance or repairs, unanticipated changes to fuel supply costs or availability due to higher demand, shortages, transportation problems or other developments, environmental incidents, or electric transmission or gas pipeline system constraints and the possibility that the Company may not have adequate insurance to cover losses as a result of such hazards;

•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 contracts to sell power and procure fuel on acceptable terms and prices;

•Government regulation, including compliance with regulatory requirements and changes in market rules, rates, tariffs and environmental laws;

•Operating and financial restrictions placed on the Company that are contained in the facility-level debt facilities and other agreements of certain subsidiaries and facility-level subsidiaries generally, in the Clearway Energy Operating LLC amended and restated revolving credit facility and in the indentures governing the Senior Notes; and

•Cyber terrorism and inadequate cybersecurity, or the occurrence of a catastrophic loss and the possibility that the Company may not have adequate insurance to cover losses resulting from such hazards or the inability of the Company’s insurers to provide coverage.

Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause the Company’s actual results to differ materially from those contemplated in any forward-looking statements included in this Quarterly Report on Form 10-Q should not be construed as exhaustive.

GLOSSARY OF TERMS

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:




2028 Senior Notes			$850 million aggregate principal amount of 4.75% unsecured senior notes due 2028, issued by Clearway Energy Operating LLC
2031 Senior Notes			$925 million aggregate principal amount of 3.75% unsecured senior notes due 2031, issued by Clearway Energy Operating LLC
2032 Senior Notes			$350 million aggregate principal amount of 3.75% unsecured senior notes due 2032, issued by Clearway Energy Operating LLC
Adjusted EBITDA			A non-GAAP measure, represents earnings before interest (including loss on debt extinguishment), tax, depreciation and amortization adjusted for mark-to-market gains or losses, asset write offs and impairments; and factors which the Company does not consider indicative of future operating performance


ASC			The FASB Accounting Standards Codification, which the FASB established as the source of authoritative GAAP

ATM Program			At-The-Market Equity Offering Program
BESS			Battery energy storage system
BlackRock			BlackRock, Inc.

CAFD			A non-GAAP measure, Cash Available for Distribution is defined as of June 30, 2024 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

CEG			Clearway Energy Group LLC (formerly Zephyr Renewables LLC)
CEG Master Services Agreement			Amended and Restated Master Services Agreement, dated as of April 30, 2024, among the Company, Clearway Energy LLC, Clearway Energy Operating LLC and CEG

Clearway Energy LLC			The holding company through which the facilities are owned by Clearway Energy Group LLC, the holder of Class B and Class D units, and Clearway Energy, Inc., the holder of the Class A and Class C units
Clearway Energy Group LLC			The holder of all shares of the Company’s Class B and Class D common stock and Clearway Energy LLC’s Class B and Class D units and, from time to time, possibly shares of the Company’s Class A and/or Class C common stock
Clearway Energy Operating LLC			The holder of facilities that are owned by Clearway Energy LLC
Clearway Renew			Clearway Renew LLC, a subsidiary of CEG, and its wholly-owned subsidiaries

Company			Clearway Energy, Inc., together with its consolidated subsidiaries
CVSR			California Valley Solar Ranch
CVSR Holdco			CVSR Holdco LLC, the indirect owner of CVSR




Distributed Solar			Solar power facilities, typically less than 20 MW in size (on an alternating current, or AC, basis), that primarily sell power produced to customers for usage on site, or are interconnected to sell power into the local distribution grid
Drop Down Assets			Assets under common control acquired by the Company from CEG
ERCOT			Electric Reliability Council of Texas, the ISO and the regional reliability coordinator of the various electricity systems within Texas
Exchange Act			The Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board

GAAP			Accounting principles generally accepted in the U.S.
GenConn			GenConn Energy LLC
GIM			Global Infrastructure Management, LLC, the manager of GIP
GIP			Global Infrastructure Partners
HLBV			Hypothetical Liquidation at Book Value


IRA			Inflation Reduction Act of 2022
IRS			Internal Revenue Service
ISO			Independent System Operator, also referred to as an RTO
ITC			Investment Tax Credit


Mesquite Star			Mesquite Star Special LLC
MMBtu			Million British Thermal Units
Mt. Storm			NedPower Mount Storm LLC
MW			Megawatt
MWh			Saleable megawatt hours, net of internal/parasitic load megawatt-hours

Natural Gas Holdco			Natural Gas CA Holdco LLC
Net Exposure			Counterparty credit exposure to Clearway Energy, Inc. net of collateral
NOLs			Net Operating Losses



OCI			Other comprehensive income
O&M			Operations and Maintenance
PG&E			Pacific Gas and Electric Company
PJM			PJM Interconnection, LLC
PPA			Power Purchase Agreement
PTC			Production Tax Credit

RA			Resource adequacy
RENOM			Clearway Renewable Operation & Maintenance LLC, a wholly-owned subsidiary of CEG
Rosie Central BESS			Rosie BESS Devco LLC

RTO			Regional Transmission Organization
SCE			Southern California Edison
SEC			U.S. Securities and Exchange Commission
Senior Notes			Collectively, the 2028 Senior Notes, the 2031 Senior Notes and the 2032 Senior Notes
SOFR			Secured Overnight Financing Rate
SPP			Solar Power Partners
SREC			Solar Renewable Energy Credit


TotalEnergies			TotalEnergies SE
U.S.			United States of America
Utah Solar Portfolio			Seven utility-scale solar farms located in Utah, representing 530 MW of capacity
Utility Scale Solar			Solar power facilities, typically 20 MW or greater in size (on an alternating current, or AC, basis), that are interconnected into the transmission or distribution grid to sell power at a wholesale level
VIE			Variable Interest Entity

PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
(In millions, except per share amounts)	2024		2023		2024		2023
Operating Revenues
Total operating revenues	$	366	$	406	$	629	$	694
Operating Costs and Expenses
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below	117		118		243		226
Depreciation, amortization and accretion	153		128		307		256

General and administrative	9		9		20		19
Transaction and integration costs	3		2		4		2

Total operating costs and expenses	282		257		574		503

Operating Income	84		149		55		191
Other Income (Expense)
Equity in earnings of unconsolidated affiliates	8		3		20		—


Other income, net	12		9		28		17
Loss on debt extinguishment	(2)		—		(3)		—
Interest expense	(88)		(55)		(145)		(154)
Total other expense, net	(70)		(43)		(100)		(137)
Income (Loss) Before Income Taxes	14		106		(45)		54
Income tax expense (benefit)	10		22		(3)		10
Net Income (Loss)	4		84		(42)		44
Less: Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests	(47)		46		(91)		6
Net Income Attributable to Clearway Energy, Inc.	$	51	$	38	$	49	$	38
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	$	0.43	$	0.33	$	0.41	$	0.32



Dividends Per Class A Common Share	$	0.4102	$	0.3818	$	0.8135	$	0.7563
Dividends Per Class C Common Share	$	0.4102	$	0.3818	$	0.8135	$	0.7563

See accompanying notes to consolidated financial statements.

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
(In millions)	2024		2023		2024		2023
Net Income (Loss)	$	4	$	84	$	(42)	$	44
Other Comprehensive Income
Unrealized gain on derivatives and changes in accumulated OCI, net of income tax benefit, of $—, $1, $—, and $—	1		3		—		—
Other comprehensive income	1		3		—		—
Comprehensive Income (Loss)	5		87		(42)		44
Less: Comprehensive (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests	(46)		48		(89)		6
Comprehensive Income Attributable to Clearway Energy, Inc.	$	51	$	39	$	47	$	38

See accompanying notes to consolidated financial statements.

CLEARWAY ENERGY, INC.

CONSOLIDATED BALANCE SHEETS


(In millions, except shares)	June 30, 2024		December 31, 2023
ASSETS	(Unaudited)
Current Assets
Cash and cash equivalents	$	226	$	535
Restricted cash	344		516
Accounts receivable — trade	255		171
Accounts receivable — affiliates	1		—
Inventory	60		55
Derivative instruments	51		41
Note receivable — affiliate	—		174

Prepayments and other current assets	84		68
Total current assets	1,021		1,560
Property, plant and equipment, net	9,952		9,526
Other Assets
Equity investments in affiliates	321		360

Intangible assets for power purchase agreements, net	2,214		2,303
Other intangible assets, net	71		71

Derivative instruments	117		82
Right-of-use assets, net	597		597

Other non-current assets	224		202
Total other assets	3,544		3,615
Total Assets	$	14,517	$	14,701
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term debt	$	412	$	558

Accounts payable — trade	86		130

Accounts payable — affiliates	12		31
Derivative instruments	59		51
Accrued interest expense	55		57

Accrued expenses and other current liabilities	77		79
Total current liabilities	701		906
Other Liabilities
Long-term debt	6,797		7,479
Deferred income taxes	35		127
Derivative instruments	336		281
Long-term lease liabilities	626		627
Other non-current liabilities	305		286
Total other liabilities	8,099		8,800
Total Liabilities	8,800		9,706
Redeemable noncontrolling interest in subsidiaries	6		1
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); 202,143,697 shares issued and outstanding (Class A 34,613,853, Class B 42,738,750, Class C 82,829,344, Class D 41,961,750) at June 30, 2024 and 202,080,794 shares issued and outstanding (Class A 34,613,853, Class B 42,738,750, Class C 82,391,441, Class D 42,336,750) at December 31, 2023	1		1
Additional paid-in capital	1,830		1,732
Retained earnings	314		361
Accumulated other comprehensive income	5		7
Noncontrolling interest	3,561		2,893
Total Stockholders’ Equity	5,711		4,994
Total Liabilities and Stockholders’ Equity	$	14,517	$	14,701

See accompanying notes to consolidated financial statements.

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six months ended June 30,
(In millions)	2024		2023
Cash Flows from Operating Activities
Net (Loss) Income	$	(42)	$	44
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Equity in earnings of unconsolidated affiliates	(20)		—
Distributions from unconsolidated affiliates	15		11
Depreciation, amortization and accretion	307		256
Amortization of financing costs and debt discounts	7		6
Amortization of intangibles	91		94
Loss on debt extinguishment	3		—

Reduction in carrying amount of right-of-use assets	8		8


Changes in deferred income taxes	(1)		9
Changes in derivative instruments and amortization of accumulated OCI	49		(51)

Cash used in changes in other working capital:
Changes in prepaid and accrued liabilities for tolling agreements	(16)		(56)
Changes in other working capital	(124)		(112)
Net Cash Provided by Operating Activities	277		209
Cash Flows from Investing Activities


Acquisition of Drop Down Assets, net of cash acquired	(671)		(7)



Capital expenditures	(202)		(109)

Return of investment from unconsolidated affiliates	35		10
Decrease in note receivable — affiliate	184		—
Investments in unconsolidated affiliates	—		(10)





Other	7		—
Net Cash Used in Investing Activities	(647)		(116)
Cash Flows from Financing Activities
Contributions from noncontrolling interests, net of distributions	1,399		275


Payments of dividends and distributions	(164)		(153)
Tax-related distributions	—		(19)




Proceeds from the issuance of long-term debt	236		42
Payments of debt issuance costs	(4)		(8)
Payments for long-term debt	(1,577)		(306)
Other	(1)		(2)
Net Cash Used in Financing Activities	(111)		(171)

Net Decrease in Cash, Cash Equivalents and Restricted Cash	(481)		(78)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	1,051		996
Cash, Cash Equivalents and Restricted Cash at End of Period	$	570	$	918

See accompanying notes to consolidated financial statements.

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months Ended June 30, 2024

(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, 2023	$	—	$	1	$	1,732	$	361	$	7	$	2,893	$	4,994
Net loss	—		—		—		(2)		—		(45)		(47)
Unrealized (loss) gain on derivatives and changes in accumulated OCI, net of tax	—		—		—		—		(2)		1		(1)
Distributions to CEG, net of contributions, cash	—		—		—		—		—		(1)		(1)

Contributions from noncontrolling interests, net of distributions, cash	—		—		—		—		—		215		215

Transfers of assets under common control	—		—		2		—		—		(42)		(40)



Non-cash adjustments for change in tax basis	—		—		6		—		—		—		6
Stock-based compensation	—		—		1		—		—		—		1
Common stock dividends and distributions to CEG unit holders	—		—		—		(47)		—		(34)		(81)
Other	—		—		—		(1)		—		—		(1)
Balances at March 31, 2024	—		1		1,741		311		5		2,987		5,045
Net income (loss)	—		—		—		51		—		(51)		—
Unrealized gain on derivatives and changes in accumulated OCI, net of tax	—		—		—		—		—		1		1
Contributions from CEG, net of distributions, cash	—		—		—		—		—		222		222
Contributions from noncontrolling interests, net of distributions, cash	—		—		—		—		—		988		988
Distributions to noncontrolling interests, net of contributions, non-cash	—		—		—		—		—		(1)		(1)
Transfers of assets under common control	—		—		5		—		—		(549)		(544)

Non-cash adjustments for change in tax basis	—		—		85		—		—		—		85
Stock-based compensation	—		—		(1)		—		—		—		(1)
Common stock dividends and distributions to CEG unit holders	—		—		—		(48)		—		(35)		(83)
Other	—		—		—		—		—		(1)		(1)
Balances at June 30, 2024	$	—	$	1	$	1,830	$	314	$	5	$	3,561	$	5,711

See accompanying notes to consolidated financial statements.

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months Ended June 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 distribution	—		—		—		—		—		(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

See accompanying notes to consolidated financial statements.

CLEARWAY ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Nature of Business

Clearway Energy, Inc., together with its consolidated subsidiaries, or the Company, is a publicly-traded energy infrastructure investor with a focus on investments in clean energy and owner of modern, sustainable and long-term contracted assets across North America. The Company is sponsored by GIP and TotalEnergies through the portfolio company, Clearway Energy Group LLC, or CEG, which is equally owned by GIP and TotalEnergies. GIP is an independent infrastructure fund manager that makes equity and debt investments in infrastructure assets and businesses. TotalEnergies is a global multi-energy company. CEG is a leading developer of renewable energy infrastructure in the U.S.

The Company is one of the largest renewable energy owners in the U.S. with approximately 6,500 net MW of installed wind, solar and battery energy storage system, or BESS, facilities. The Company’s approximately 9,000 net MW of assets also includes approximately 2,500 net MW of environmentally-sound, highly efficient natural gas-fired generation facilities. Through this environmentally-sound, diversified and primarily contracted portfolio, the Company endeavors to provide its investors with stable and growing dividend income. The majority of the Company’s revenues are derived from long-term contractual arrangements for the output or capacity from these assets.

The Company consolidates the results of Clearway Energy LLC through its controlling interest, with CEG’s interest shown as noncontrolling interest in the consolidated financial statements. The holders of the Company’s outstanding shares of Class A and Class C common stock are entitled to dividends as declared. CEG receives its distributions from Clearway Energy LLC through its ownership of Clearway Energy LLC Class B and Class D units. From time to time, CEG may also hold shares of the Company’s Class A and/or Class C common stock.

As of June 30, 2024, the Company owned 58.10% of the economic interests of Clearway Energy LLC, with CEG owning 41.90% of the economic interests of Clearway Energy LLC.

The following table represents a summarized structure of the Company as of June 30, 2024:

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the SEC’s regulations for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to the consolidated financial statements included in the Company’s 2023 Form 10-K. Interim results are not necessarily indicative of results for a full year.

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all material adjustments consisting of normal and recurring accruals necessary to present fairly the Company’s consolidated financial position as of June 30, 2024, and results of operations, comprehensive income and cash flows for the three and six months ended June 30, 2024 and 2023.

Note 2 — Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amounts of net earnings during the reporting periods. Actual results could be different from these estimates.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include highly liquid investments with an original maturity of three months or less at the time of purchase. Cash and cash equivalents held at subsidiary facilities was $191 million and $125 million as of June 30, 2024 and December 31, 2023, respectively.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:


	June 30, 2024		December 31, 2023
	(In millions)
Cash and cash equivalents	$	226	$	535
Restricted cash	344		516
Cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	$	570	$	1,051

Restricted cash consists primarily of funds held to satisfy the requirements of certain debt agreements and funds held within the Company’s facilities that are restricted in their use. As of June 30, 2024, these restricted funds were comprised of $169 million designated to fund operating expenses, $42 million designated for current debt service payments and $89 million restricted for reserves including debt service, performance obligations and other reserves as well as capital expenditures. The remaining $44 million is held in distributions reserve accounts.

Supplemental Cash Flow Information

The following table provides a disaggregation of the amounts classified as Acquisition of Drop Down Assets, net of cash acquired, shown in the consolidated statements of cash flows:


	Six months ended June 30,
	2024		2023
	(In millions)
Cash paid to acquire Drop Down Assets	$	(673)	$	(21)
Cash acquired from the acquisition of Drop Down Assets	2		14
Acquisition of Drop Down Assets, net of cash acquired	$	(671)	$	(7)

Accumulated Depreciation and Accumulated Amortization

The following table presents the accumulated depreciation included in property, plant and equipment, net, and accumulated amortization included in intangible assets, net:


	June 30, 2024		December 31, 2023
	(In millions)
Property, Plant and Equipment Accumulated Depreciation	$	3,781	$	3,485
Intangible Assets Accumulated Amortization	1,101		1,009

Dividends to Class A and Class C Common Stockholders

The following table lists the dividends paid on the Company's Class A and Class C common stock during the six months ended June 30, 2024:


	Second Quarter 2024		First Quarter 2024
Dividends per Class A share	$	0.4102	$	0.4033
Dividends per Class C share	0.4102		0.4033

Dividends on the Class A and Class C common stock are subject to available capital, market conditions, and compliance with associated laws, regulations and other contractual obligations. The Company expects that, based on current circumstances, comparable cash dividends will continue to be paid in the foreseeable future.

On August 1, 2024, the Company declared quarterly dividends on its Class A and Class C common stock of $0.4171 per share payable on September 16, 2024 to stockholders of record as of September 3, 2024.

Noncontrolling Interests

Clearway Energy LLC Distributions to CEG

The following table lists distributions paid to CEG during the six months ended June 30, 2024 on Clearway Energy LLC’s Class B and D units:


	Second Quarter 2024		First Quarter 2024
Distributions per Class B Unit	$	0.4102	$	0.4033
Distributions per Class D Unit	0.4102		0.4033

On August 1, 2024, Clearway Energy LLC declared a distribution on its Class B and Class D units of $0.4171 per unit payable on September 16, 2024 to unit holders of record as of September 3, 2024.

Revenue Recognition

Disaggregated Revenues

The following tables represent the Company’s disaggregation of revenue from contracts with customers along with the reportable segment for each category:


	Three months ended June 30, 2024
(In millions)	Conventional Generation		Renewables		Total
Energy revenue (a)	$	10	$	334	$	344
Capacity revenue (a)	67		13		80
Other revenues	1		29		30
Contract amortization	(4)		(42)		(46)
Mark-to-market for economic hedges	(5)		(37)		(42)
Total operating revenues	69		297		366
Less: Contract amortization	4		42		46
Less: Mark-to-market for economic hedges	5		37		42
Less: Lease revenue	(28)		(267)		(295)
Total revenue from contracts with customers	$	50	$	109	$	159

(a) The following amounts of energy and capacity revenues relate to leases and are accounted for under ASC 842:


(In millions)	Conventional Generation		Renewables		Total
Energy revenue	$	—	$	258	$	258
Capacity revenue	28		9		37

Total	$	28	$	267	$	295


	Three months ended June 30, 2023
(In millions)	Conventional Generation		Renewables		Total
Energy revenue (a)	$	3	$	275	$	278
Capacity revenue (a)	96		5		101
Other revenues (a)	21		27		48
Contract amortization	(5)		(42)		(47)
Mark-to-market for economic hedges	—		26		26
Total operating revenues	115		291		406
Less: Contract amortization	5		42		47
Less: Mark-to-market for economic hedges	—		(26)		(26)
Less: Lease revenue	(104)		(237)		(341)
Total revenue from contracts with customers	$	16	$	70	$	86

(a) The following amounts of energy, capacity and other revenues relate to leases and are accounted for under ASC 842:


(In millions)	Conventional Generation		Renewables		Total
Energy revenue	$	1	$	233	$	234
Capacity revenue	82		4		86
Other revenues (b)	21		—		21
Total	$	104	$	237	$	341

(b) Includes sales-type lease revenue recognized for the Marsh Landing Black Start addition that reached commercial operations on May 31, 2023.


	Six months ended June 30, 2024
(In millions)	Conventional Generation		Renewables		Total
Energy revenue (a)	$	32	$	555	$	587
Capacity revenue (a)	130		22		152
Other revenues	3		43		46
Contract amortization	(9)		(83)		(92)
Mark-to-market for economic hedges	8		(72)		(64)
Total operating revenue	164		465		629
Less: Contract amortization	9		83		92
Less: Mark-to-market for economic hedges	(8)		72		64
Less: Lease revenue	(57)		(444)		(501)
Total revenue from contracts with customers	$	108	$	176	$	284

(a) The following amounts of energy and capacity revenues relate to leases and are accounted for under ASC 842:


(In millions)	Conventional Generation		Renewables		Total
Energy revenue	$	1	$	427	$	428
Capacity revenue	56		17		73
Total	$	57	$	444	$	501


	Six months ended June 30, 2023
(In millions)	Conventional Generation		Renewables		Total
Energy revenue (a)	$	4	$	473	$	477
Capacity revenue (a)	196		10		206
Other revenues (a)	21		39		60
Contract amortization	(11)		(83)		(94)
Mark-to-market for economic hedges	—		45		45
Total operating revenue	210		484		694
Less: Contract amortization	11		83		94
Less: Mark-to-market for economic hedges	—		(45)		(45)
Less: Lease revenue	(205)		(393)		(598)
Total revenue from contracts with customers	$	16	$	129	$	145

(a) The following amounts of energy, capacity and other revenues relate to leases and are accounted for under ASC 842:


(In millions)	Conventional Generation		Renewables		Total
Energy revenue	$	2	$	385	$	387
Capacity revenue	182		8		190
Other revenues (b)	21		—		21
Total	$	205	$	393	$	598

(b) Includes sales-type lease revenue recognized for the Marsh Landing Black Start addition that reached commercial operations on May 31, 2023.

Contract Balances

The following table reflects the contract assets and liabilities included on the Company’s consolidated balance sheets:


	June 30, 2024		December 31, 2023
	(In millions)
Accounts receivable, net - Contracts with customers	$	100	$	66
Accounts receivable, net - Leases	155		105
Total accounts receivable, net	$	255	$	171

Note 3 — Acquisitions

Cedar Creek Drop Down — On April 16, 2024, the Company, through its indirect subsidiary, Cedar Creek Wind Holdco LLC, acquired Cedar Creek Holdco LLC, the indirect owner of Cedar Creek, a 160 MW wind facility that is located in Bingham County, Idaho, from Clearway Renew for cash consideration of $117 million. Cedar Creek Holdco LLC consolidates as primary beneficiary, Cedar Creek TE Holdco LLC, a tax equity fund that owns the Cedar Creek wind facility, as further described in Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities. Cedar Creek has a 25-year PPA with an investment-grade utility that commenced in March 2024. The Cedar Creek operations are reflected in the Company’s Renewables segment and the acquisition was funded with existing sources of liquidity. The acquisition was determined to be an asset acquisition and the Company consolidates Cedar Creek on a prospective basis in its financial statements. The assets and liabilities transferred to the Company relate to interests under common control and were recorded at historical cost in accordance with ASC 805-50, Business Combinations - Related Issues. The difference between the cash paid of $117 million and the historical cost of the Company’s net assets acquired of $17 million was recorded as an adjustment to CEG’s noncontrolling interest balance. In addition, the Company reflected the entire $117 million of the Company’s purchase price, which was contributed back to the Company by CEG to pay down the acquired long-term debt, in the line item contributions from CEG, net of distributions in the consolidated statements of stockholders’ equity.

The following is a summary of assets and liabilities transferred in connection with the acquisition as of April 16, 2024:


(In millions)	Cedar Creek
Restricted cash	$	1
Property, plant and equipment	311
Right-of-use assets, net	6
Derivative assets	14
Other current and non-current assets	14

Total assets acquired	346

Long-term debt (a)	309
Long-term lease liabilities	7
Other current and non-current liabilities	13
Total liabilities assumed	329
Net assets acquired	$	17

(a) Includes a $112 million construction loan, a $91 million cash equity bridge loan, and a $109 million tax equity bridge loan, offset by $3 million in unamortized debt issuance costs. See Note 7, Long-term Debt, for further discussion of the long-term debt assumed in the acquisition.

Texas Solar Nova 2 Drop Down — On March 15, 2024, the Company, through its indirect subsidiary, TSN1 TE Holdco LLC, acquired Texas Solar Nova 2, a 200 MW solar facility that is located in Kent County, Texas, from Clearway Renew for cash consideration of $112 million, $17 million of which was funded by the Company with the remaining $95 million funded through a contribution from the cash equity investor in Lighthouse Renewable Holdco 2 LLC, which is a partnership. Lighthouse Renewable Holdco 2 LLC indirectly consolidates as primary beneficiary, TSN1 TE Holdco LLC, a tax equity fund that owns Texas Solar Nova 1 and Texas Solar Nova 2, as further described in Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities. Texas Solar Nova 2 has an 18-year PPA with an investment-grade counterparty that commenced in February 2024. The Texas Solar Nova 2 operations are reflected in the Company’s Renewables segment and the Company’s portion of the purchase price was funded with existing sources of liquidity. The acquisition was determined to be an asset acquisition and the Company consolidates Texas Solar Nova 2 on a prospective basis in its financial statements. The assets and liabilities transferred to the Company relate to interests under common control and were recorded at historical cost in accordance with ASC 805-50, Business Combinations - Related Issues. The difference between the cash paid of $112 million and the historical cost of the Company’s net assets acquired of $72 million was recorded as an adjustment to CEG’s noncontrolling interest balance. In addition, the Company reflected $9 million of the Company’s purchase price, which was contributed back to the Company by CEG to pay down the acquired long-term debt, in the line item distributions to CEG, net of contributions in the consolidated statements of stockholders’ equity.

The following is a summary of assets and liabilities transferred in connection with the acquisition as of March 15, 2024:


(In millions)	Texas Solar Nova 2
Restricted cash	$	1
Property, plant and equipment	280
Right-of-use assets, net	21
Derivative assets	6
Other current and non-current assets	4

Total assets acquired	312

Long-term debt (a)	194
Long-term lease liabilities	19
Other current and non-current liabilities	27
Total liabilities assumed	240
Net assets acquired	$	72

(a) Includes an $80 million term loan and a $115 million tax equity bridge loan, offset by $1 million in unamortized debt issuance costs. See Note 7, Long-term Debt, for further discussion of the long-term debt assumed in the acquisition.

Note 4 — Investments Accounted for by the Equity Method and Variable Interest Entities

Entities that are not Consolidated

The Company has interests in entities that are considered VIEs under ASC 810, but for which it is not considered the primary beneficiary. The Company accounts for its interests in these entities and entities in which it has a significant investment under the equity method of accounting, as further described under Item 15 — Note 5, Investments Accounted for by the Equity Method and Variable Interest Entities, to the consolidated financial statements included in the Company’s 2023 Form 10-K.

The following table reflects the Company’s equity investments in unconsolidated affiliates as of June 30, 2024:


Name	Economic Interest	Investment Balance (a)
		(In millions)
Avenal	50%	$	7
Desert Sunlight	25%	221
Elkhorn Ridge	67%	11
GenConn (b)	50%	77
San Juan Mesa	75%	5

		$	321

(a) The Company’s maximum exposure to loss is limited to its investment balances.

(b) GenConn is a VIE.

Rosie Central BESS

On June 13, 2024, when the Rosamond Central BESS facility reached substantial completion, Clearway Renew redeemed Rosie Class B LLC’s entire investment of $28 million in Rosie Central BESS that was accounted for as an equity method investment, as further discussed in Note 7, Long-term Debt. Rosie Class B LLC’s equity investment in Rosie Central BESS was comprised of contributions from the Company and the cash equity investor in Rosie TargetCo LLC during the year ended December 31, 2023.

Entities that are Consolidated

As further described under Item 15 — Note 5, Investments Accounted for by the Equity Method and Variable Interest Entities, to the consolidated financial statements included in the Company’s 2023 Form 10-K, the Company has a controlling financial interest in certain entities which have been identified as VIEs under ASC 810, Consolidations, or ASC 810. These arrangements are primarily related to tax equity arrangements entered into with third parties in order to monetize certain tax credits associated with wind, solar and BESS facilities. The Company also has a controlling financial interest in certain partnership arrangements with third-party investors, which also have been identified as VIEs. Under the Company’s arrangements that have been identified as VIEs, the third-party investors are allocated earnings, tax attributes and distributable cash in accordance with the respective limited liability company agreements. Many of these arrangements also provide a mechanism to facilitate achievement of the investor’s specified return by providing incremental cash distributions to the investor at a specified date if the specified return has not yet been achieved.

The following is a summary of significant activity during the six months ended June 30, 2024 related to the Company’s consolidated VIEs:

Cedar Creek TE Holdco LLC

As described in Note 3, Acquisitions, on April 16, 2024, the Company, through its indirect subsidiary, Cedar Creek Wind Holdco LLC, acquired Cedar Creek Holdco LLC. Cedar Creek Holdco LLC consolidates as primary beneficiary, Cedar Creek TE Holdco LLC, a tax equity fund that owns the Cedar Creek wind facility. The Class A membership interests in Cedar Creek TE Holdco LLC are held by a tax equity investor and are reflected as noncontrolling interest on the Company’s consolidated balance sheet.

Lighthouse Renewable Holdco 2 LLC

As described in Note 3, Acquisitions, on March 15, 2024, TSN1 TE Holdco LLC, an indirect subsidiary of the Company, acquired Texas Solar Nova 2. The Company, through Lighthouse Renewable Holdco 2 LLC, a partnership, consolidates TSN1 TE Holdco LLC, a tax equity fund that owns Texas Solar Nova 1 and Texas Solar Nova 2. The Company recorded the noncontrolling interest of the cash equity investor in Lighthouse Renewable Holdco 2 LLC at historical carrying amount, with the offset to additional-paid in capital. The Class A membership interests in TSN1 TE Holdco LLC are held by a tax equity investor and are reflected as noncontrolling interest on the Company’s consolidated balance sheet.

Daggett Renewable Holdco LLC

Effective January 1, 2024, the Company and the cash equity investor in Daggett Renewable HoldCo LLC and Daggett 2 TargetCo LLC, the indirect owner of the Daggett 2 solar and BESS facility, agreed to transfer Daggett 2 TargetCo LLC to Daggett Renewable Holdco LLC. As the transfer was among entities under common control, the transaction was recognized at historical cost and no gain or loss was recognized.

Summarized financial information for the Company’s consolidated VIEs consisted of the following as of June 30, 2024:


(In millions)	Buckthorn Holdings, LLC		Cedar Creek TE Holdco LLC		Daggett Renewable Holdco LLC (a)		DGPV Funds (b)		Lighthouse Renewable Holdco LLC (c)		Lighthouse Renewable Holdco 2 LLC (d)
Other current and non-current assets	$	5	$	47	$	240	$	56	$	69	$	153
Property, plant and equipment

Clearway Energy, Inc. [CWEN] Filings
Clearway Energy, Inc. [CWEN-A] Filings
10-Q	[2024-08-01]
10-Q	[2024-05-09]
10-K	[2024-02-22]
10-Q	[2023-11-02]
10-Q	[2023-08-08]
10-Q	[2023-05-04]
10-K	[2023-02-23]
10-Q	[2022-11-02]
10-Q	[2022-08-02]
10-Q	[2022-05-05]
10-K	[2022-02-28]
10-Q	[2021-11-04]
10-Q	[2021-08-03]
10-Q	[2021-05-06]
10-K	[2021-03-01]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-03-02]
10-Q	[2019-11-06]
10-Q	[2019-08-06]
10-Q	[2019-05-07]
10-K	[2019-02-28]
10-Q	[2018-11-06]
10-Q	[2018-08-02]
10-Q	[2018-05-03]
10-K	[2018-03-01]
10-Q	[2017-11-02]
10-Q	[2017-08-03]
10-Q	[2017-05-02]
10-K	[2017-02-28]
10-Q	[2016-11-04]
10-Q	[2016-08-09]
10-Q	[2016-05-05]
10-K	[2016-02-29]
10-Q	[2015-11-04]
10-Q	[2015-08-04]
10-Q	[2015-05-08]
10-K	[2015-02-27]
10-Q	[2014-11-05]
10-Q	[2014-08-07]
S-1	[2014-06-16]
10-Q	[2014-05-06]
10-K	[2014-02-28]
10-Q	[2013-11-12]
10-Q	[2013-08-14]
S-1	[2013-06-07]

Clearway Energy, Inc. [CWEN] Filings

Clearway Energy, Inc. [CWEN-A] Filings