Clearway Energy Earnings 2020-03-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

cwen-20200331

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 March 31, 2020


☐			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 April 30, 2020, there were 34,599,645 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, 79,330,275 shares of Class C common stock outstanding, par value $0.01 per share, and 42,738,750 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			7
ITEM 1 — FINANCIAL STATEMENTS AND NOTES			7
ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			37
ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			53
ITEM 4 — CONTROLS AND PROCEDURES			54
PART II — OTHER INFORMATION			55
ITEM 1 — LEGAL PROCEEDINGS			55
ITEM 1A — RISK FACTORS			55
ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			57
ITEM 3 — DEFAULTS UPON SENIOR SECURITIES			57
ITEM 4 — MINE SAFETY DISCLOSURES			57
ITEM 5 — OTHER INFORMATION			57
ITEM 6 — EXHIBITS			58
SIGNATURES			60

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 II of this Quarterly Report on Form 10-Q and under Item 1A — Risk Factors in Part I of the Company's Annual Report on Form 10-K for the year ended December 31, 2019, as well as the following:

•Potential risks related to the PG&E Bankruptcy;

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

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

•Potential risks related to the COVID-19 pandemic;

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

•The Company's ability to acquire assets from GIP or CEG;

•The Company's ability to raise additional capital due to its indebtedness, corporate structure, market conditions or otherwise;

•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 as current offtake agreements expire;

•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 project-level debt facilities and other agreements of certain subsidiaries and project-level subsidiaries generally, in the Clearway Energy Operating LLC amended and restated revolving credit facility, in the indentures governing the Senior Notes and in the indentures governing the Company's convertible notes;

•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;

•The Company's ability to engage in successful mergers and acquisitions activity; and

•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.

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:


2019 Convertible Notes						$220 million aggregate principal amount of 3.50% convertible notes due 2019, issued by Clearway Energy, Inc.
2019 Form 10-K						Clearway Energy, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2019
2020 Convertible Notes						$45 million aggregate principal amount of 3.25% convertible notes due 2020, issued by Clearway Energy, Inc.
2024 Senior Notes						$500 million aggregate principal amount of 5.375% unsecured senior notes due 2024, issued by Clearway Energy Operating LLC
2025 Senior Notes						$600 million aggregate principal amount of 5.750% unsecured senior notes due 2025, issued by Clearway Energy Operating LLC
2026 Senior Notes						$350 million aggregate principal amount of 5.00% unsecured senior notes due 2026, issued by Clearway Energy Operating LLC
2028 Senior Notes						$600 million aggregate principal amount of 4.75% unsecured senior notes due 2028, issued by Clearway Energy Operating LLC
Adjusted EBITDA						A non-GAAP measure, represents earnings before interest, 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
AOCI						Accumulated Other Comprehensive Income
ASC						The FASB Accounting Standards Codification, which the FASB established as the source of authoritative GAAP
ASU						Accounting Standards Updates - updates to the ASC
ATM Program						At-The-Market Equity Offering Program
Bankruptcy Code						Title 11 of the U.S. Code
Bankruptcy Court						U.S. Bankruptcy Court for the Northern District of California
CAFD						A non-GAAP measure, Cash Available for Distribution is Adjusted EBITDA plus cash distributions/return of investment from unconsolidated affiliates, adjustments to reflect CAFD generated by unconsolidated investments that are not able to distribute project dividends due to the PG&E Bankruptcy, cash receipts from notes receivable, cash distributions from noncontrolling interests, 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, Walnut Creek investment payments, and changes in prepaid and accrued capacity payments, and adjusted for development expenses
CEG						Clearway Energy Group LLC (formerly Zephyr Renewables LLC)
CEG Master Services Agreements						Master Services Agreements entered into as of August 31, 2018 between the Company, Clearway Energy LLC and Clearway Energy Operating LLC, and CEG
Clearway Energy LLC						The holding company through which the projects are owned by Clearway Energy Group LLC, the holder of Class B and Class D units of the Company, and Clearway Energy, Inc., the holder of the Class A and Class C units
Clearway Energy Group LLC						The holder of the Company's Class B and Class D common shares and Clearway Energy LLC's Class B and Class D units
Clearway Energy Operating LLC						The holder of the project assets that are owned by Clearway Energy LLC
COD						Commercial Operation Date
Company						Clearway Energy, Inc. together with its consolidated subsidiaries
CVSR						California Valley Solar Ranch
CVSR Holdco						CVSR Holdco LLC, the indirect owner of CVSR
DGPV Holdco 1						DGPV Holdco 1 LLC
DGPV Holdco 2						DGPV Holdco 2 LLC


DGPV Holdco 3						DGPV Holdco 3 LLC
Distributed Solar						Solar power projects, typically less than 20 MW in size, 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						Collectively, assets under common control acquired by the Company from NRG from January 1, 2014 through the period ended August 31, 2018 and from CEG from August 31, 2018 through the period ending March 31, 2020
EBITDA						A non-GAAP measure, represents earnings before interest, tax, depreciation and amortization
Economic Gross Margin						A non-GAAP measure, energy and capacity revenue less cost of fuels. See Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations — Management's discussion of the results of operations for the quarters ended March 31, 2020 and 2019 for a discussion of this measure.
ECP						Energy Center Pittsburgh LLC, a subsidiary of the Company
EPA						U.S. Environmental Protection Agency
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
GIP						Collectively, Global Infrastructure Partners III-C Intermediate AIV 3, L.P., Global Infrastructure Partners III-A/B AIV 3, L.P., Global Infrastructure Partners III-C Intermediate AIV 2, L.P., Global Infrastructure Partners III-C2 Intermediate AIV, L.P. and GIP III Zephyr Friends & Family, LLC.
GIP Transaction						On August 31, 2018, NRG transferred its full ownership interest in the Company to Clearway Energy Group LLC and subsequently sold 100% of its interests in Clearway Energy Group LLC, which includes NRG's renewable energy development and operations platform, to an affiliate of GIP. GIP, NRG and the Company also entered into a consent and indemnity agreement in connection with the purchase and sale agreement, which was signed on February 6, 2018
HLBV						Hypothetical Liquidation at Book Value
LIBOR						London Inter-Bank Offered Rate
March 2017 Drop Down Assets						(i) Agua Caliente Borrower 2 LLC, which owns a 16% interest (approximately 31% of NRG's 51% interest) in the Agua Caliente solar farm and (ii) NRG's 100% ownership in the Class A equity interests in the Utah Solar Portfolio (defined below), both acquired by the Company on March 27, 2017
MMBtu						Million British Thermal Units
MW						Megawatts
MWh						Saleable megawatt hours, net of internal/parasitic load megawatt-hours
MWt						Megawatts Thermal Equivalent
Net Exposure						Counterparty credit exposure to Clearway Energy, Inc. net of collateral
NOLs						Net Operating Losses
NPPD						Nebraska Public Power District
NRG						NRG Energy, Inc.
NRG TSA						Transition Services Agreement, dated as of August 31, 2018, by and between NRG and the Company
OCL						Other comprehensive loss
O&M						Operation and Maintenance
PG&E						Pacific Gas and Electric Company
PG&E Bankruptcy						On January 29, 2019, PG&E Corporation and Pacific Gas and Electric Company filed voluntary petitions for relief under the Bankruptcy Code in the Bankruptcy Court
PPA						Power Purchase Agreement
RENOM						Clearway Renewable Operation & Maintenance LLC
RPV Holdco						RPV Holdco 1 LLC
RTO						Regional Transmission Organization


SEC						U.S. Securities and Exchange Commission
Senior Notes						Collectively, the 2024 Senior Notes, the 2025 Senior Notes, the 2026 Senior Notes and the 2028 Senior Notes
SPP						Solar Power Partners
Tax Act						Tax Cuts and Jobs Act of 2017
Thermal Business						The Company's thermal business, which consists of thermal infrastructure assets that provide steam, hot water and/or chilled water, and in some instances electricity, to commercial businesses, universities, hospitals and governmental units
TSA						Transition Services Agreement
UPMC Thermal Project						The University of Pittsburgh Medical Center Thermal Project, a 73 MWt district energy system that allows ECP to provide steam, chilled water and 7.5 MW of emergency backup power service to UPMC
U.S.						United States of America
Utah Solar Portfolio						Collection consists of Four Brothers Solar, LLC, Granite Mountain Holdings, LLC, and Iron Springs Holdings, LLC, which are equity investments owned by Four Brothers Capital, LLC, Granite Mountain Capital, LLC, and Iron Springs Capital, LLC, respectively, and are part of the March 2017 Drop Down Assets acquisition that closed on March 27, 2017
Utility Scale Solar						Solar power projects, 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
VaR						Value at Risk
VIE						Variable Interest Entity
Wind TE Holdco						Wind TE Holdco LLC, an 814 net MW portfolio of twelve wind projects

PART I - FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended March 31,
(In millions, except per share amounts)	2020		2019
Operating Revenues
Total operating revenues	$	258	$	217
Operating Costs and Expenses
Cost of operations	93		83
Depreciation, amortization and accretion	102		85

General and administrative	9		6
Transaction and integration costs	1		1
Development costs	1		1
Total operating costs and expenses	206		176
Operating Income	52		41
Other Income (Expense)
Equity in (losses) earnings of unconsolidated affiliates	(13)		3
Other income, net	2		3
Loss on debt extinguishment	(3)		—
Interest expense	(167)		(101)
Total other expense, net	(181)		(95)
Loss Before Income Taxes	(129)		(54)
Income tax benefit	(22)		(7)
Net Loss	(107)		(47)


Less: Loss attributable to noncontrolling interests	(78)		(27)
Net Loss Attributable to Clearway Energy, Inc.	$	(29)	$	(20)
Losses 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

Weighted average number of Class C common shares outstanding - basic and diluted	79		73

Losses per Weighted Average Class A and Class C Common Share - Basic and Diluted	$	(0.26)	$	(0.18)


Dividends Per Class A Common Share	0.21		0.20
Dividends Per Class C Common Share	$	0.21	$	0.20

See accompanying notes to consolidated financial statements.

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)


	Three months ended March 31,
(In millions)	2020		2019
Net Loss	$	(107)	$	(47)
Other Comprehensive Loss
Unrealized loss on derivatives, net of income tax benefit of $2 and $0	(12)		(2)
Other comprehensive loss	(12)		(2)
Comprehensive Loss	(119)		(49)
Less: Comprehensive loss attributable to noncontrolling interests	(84)		(28)
Comprehensive Loss Attributable to Clearway Energy, Inc.	$	(35)	$	(21)

See accompanying notes to consolidated financial statements.

CLEARWAY ENERGY, INC.

CONSOLIDATED BALANCE SHEETS


(In millions, except shares)	March 31, 2020		December 31, 2019
ASSETS	(unaudited)
Current Assets
Cash and cash equivalents	$	110	$	155
Restricted cash	270		262
Accounts receivable — trade	99		116
Accounts receivable — affiliate	1		2
Inventory	41		40

Prepayments and other current assets	33		33
Total current assets	554		608
Property, plant and equipment, net	6,001		6,063
Other Assets
Equity investments in affiliates	1,149		1,183

Intangible assets, net	1,406		1,428

Deferred income taxes	116		92
Right of use assets, net	221		223

Other non-current assets	108		103
Total other assets	3,000		3,029
Total Assets	$	9,555	$	9,700
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term debt	$	1,480	$	1,824
Accounts payable — trade	70		74

Accounts payable — affiliate	27		31
Derivative instruments	38		16
Accrued interest expense	60		41

Accrued expenses and other current liabilities	39		71
Total current liabilities	1,714		2,057
Other Liabilities
Long-term debt	5,081		4,956
Derivative instruments	151		76
Long-term lease liabilities	222		227
Other non-current liabilities	123		121
Total non-current liabilities	5,577		5,380
Total Liabilities	7,291		7,437
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); 199,406,906 shares issued and outstanding (Class A 34,599,645, Class B 42,738,750, Class C 79,329,761, Class D 42,738,750) at March 31, 2020 and 198,819,999 shares issued and outstanding (Class A 34,599,645, Class B 42,738,750, Class C 78,742,854, Class D 42,738,750) at December 31, 2019	1		1
Additional paid-in capital	1,922		1,936
Accumulated deficit	(101)		(72)
Accumulated other comprehensive loss	(21)		(15)
Noncontrolling interest	463		413
Total Stockholders' Equity	2,264		2,263
Total Liabilities and Stockholders' Equity	$	9,555	$	9,700

See accompanying notes to consolidated financial statements.

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three months ended March 31,
	2020		2019
	(In millions)
Cash Flows from Operating Activities
Net loss	$	(107)	$	(47)
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings (losses) of unconsolidated affiliates	13		(3)
Distributions from unconsolidated affiliates	5		11
Depreciation, amortization and accretion	102		85
Amortization of financing costs and debt discounts	4		4
Amortization of intangibles and out-of-market contracts	22		17
Loss on debt extinguishment	3		—
Right-of-use asset amortization	2		—
Changes in deferred income taxes	(22)		(7)
Changes in derivative instruments	85		28
Loss on disposal of asset components	—		2
Cash provided by (used in) changes in other working capital
Changes in prepaid and accrued liabilities for tolling agreements	(45)		(35)
Changes in other working capital	22		6
Net Cash Provided by Operating Activities	84		61
Cash Flows from Investing Activities
Partnership interest acquisition	—		(4)
Buyout of Wind TE Holdco noncontrolling interest	—		(19)
Capital expenditures	(40)		(16)
Return of investment from unconsolidated affiliates	12		14
Investments in unconsolidated affiliates	(7)		(4)
Proceeds from sale of assets	15		—
Insurance proceeds	3		—
Other	—		3
Net Cash Used in Investing Activities	(17)		(26)
Cash Flows from Financing Activities
Net contributions from noncontrolling interests	154		19
Net proceeds from the issuance of common stock	10		—
Payments of dividends and distributions	(42)		(39)
Proceeds from the revolving credit facility	180		—
Proceeds from the issuance of long-term debt	31		4


Payments for long-term debt - external	(437)		(304)
Net Cash Used in Financing Activities	(104)		(320)
Net Decrease in Cash, Cash Equivalents and Restricted Cash	(37)		(285)
Cash, Cash Equivalents and Restricted Cash at beginning of period	417		583
Cash, Cash Equivalents and Restricted Cash at end of period	$	380	$	298

See accompanying notes to consolidated financial statements.

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Three Months Ended March 31, 2020

(Unaudited)


(In millions)	Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Stockholders' Equity
Balances at December 31, 2019	$	—	$	1	$	1,936	$	(72)	$	(15)	$	413	$	2,263
Net loss	—		—		—		(29)		—		(78)		(107)
Unrealized loss on derivatives, net of tax	—		—		—		—		(6)		(6)		(12)

Contributions from CEG, cash	—		—		—		—		—		4		4
Contributions from tax equity interests, net of distributions, cash.	—		—		—		—		—		150		150
Net proceeds from the issuance of common stock under the ATM	—		—		10		—		—		—		10
Distributions to tax equity investors, non-cash	—		—		—		—		—		(2)		(2)
Common stock dividends and distributions to CEG	—		—		(24)		—		—		(18)		(42)
Balances at March 31, 2020	$	—	$	1	$	1,922	$	(101)	$	(21)	$	463	$	2,264

For the Three Months Ended March 31, 2019

(Unaudited)


(In millions)	Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Stockholders' Equity


Balances at December 31, 2018	$	—	$	1	$	1,897	$	(58)	$	(18)	$	402	$	2,224
Net loss	—		—		—		(20)		—		(27)		(47)
Unrealized loss on derivatives, net of tax	—		—		—		—		(1)		(1)		(2)
Buyout of Wind TE Holdco noncontrolling interest	—		—		(5)		—		—		(14)		(19)
Contributions from tax equity interests, net of distributions,cash.	—		—		—		—		—		19		19
Contributions from CEG for Oahu Partnership, non-cash	—		—		—		—		—		12		12
Cumulative effect of change in the accounting principle	—		—		—		(2)		—		(1)		(3)
Common stock dividends and distributions to CEG	—		—		(22)		—		—		(17)		(39)
Balances at March 31, 2019	$	—	$	1	$	1,870	$	(80)	$	(19)	$	373	$	2,145

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 in and owner of modern, sustainable and long-term contracted assets across North America. The Company is sponsored by GIP III Zephyr Acquisition Partners, L.P. through its portfolio company, CEG. GIP is an independent fund manager that invests in infrastructure assets in energy and transport sectors.

The Company’s environmentally-sound asset portfolio includes over 5,875 MW of wind, solar and natural gas-fired power generation facilities. Through this diversified and contracted portfolio, the Company endeavors to provide its investors with stable and growing dividend income. Nearly all of these assets sell substantially all of their output pursuant to long-term offtake agreements with creditworthy counterparties. The weighted average remaining contract duration of these offtake agreements was approximately 13 years as of March 31, 2020 based on CAFD. The Company also owns thermal infrastructure assets with an aggregate steam and chilled water capacity of 1,530 net MWt and electric generation capacity of 36 net MW. These thermal infrastructure assets provide steam, hot and/or chilled water, and, in some instances, electricity to commercial businesses, universities, hospitals and governmental units in multiple locations, principally through long-term contracts or pursuant to rates regulated by state utility commissions.

The Company consolidates the results of Clearway Energy LLC through its controlling interest, with CEG's interest shown as noncontrolling interest in the 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.

As a result of the Class C common stock issuance under the ATM during the first quarter of 2020, the Company owns 57.13% of the economic interests of Clearway Energy LLC, with CEG retaining 42.87% of the economic interests of Clearway Energy LLC as of March 31, 2020. For further discussion, see Note 9, Changes in Capital Structure.

The following table represents the structure of the Company as of March 31, 2020:

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 2019 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 March 31, 2020, and the results of operations, comprehensive loss and cash flows for the three months ended March 31, 2020 and 2019.

PG&E Bankruptcy Update

During 2019, PG&E, one of the Company's largest customers, filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of California, or the Bankruptcy Court. On January 31, 2020, PG&E filed with the Bankruptcy Court a Chapter 11 plan of reorganization, as amended, or the PG&E Plan. The PG&E Plan provides for PG&E to assume all of its PPAs with the Company. There are many conditions that must be satisfied before the PG&E Plan and assumption of the PPAs can become effective, including but not limited to approvals by various classes of creditors, the Bankruptcy Court, and the CPUC. A hearing before the Bankruptcy Court to consider whether the PG&E Plan will be approved and confirmed is currently expected to occur on May 27, 2020. As of March 31, 2020, the Company had $1.37 billion of property, plant and equipment, net, $368 million investments in unconsolidated affiliates and $1.19 billion of borrowings with final maturity dates ranging from 2022 to 2037 related to subsidiaries that sell their output to PG&E under the

long-term contracts. These subsidiaries of the Company are parties to financing agreements consisting of non-recourse project-level debt and, in certain cases, non-recourse holding company debt. The PG&E Bankruptcy has triggered defaults under the PPAs with PG&E and such related financing agreements, as further discussed in Item 1 — Note 7, Long-term Debt. As a result, the Company recorded approximately $1.19 billion of principal, net of the related unamortized debt issuance costs, with final maturity dates ranging from 2022 to 2037, as short-term debt. As of May 7, 2020, the Company's contracts with PG&E have operated in the normal course and the Company currently expects these contracts to continue as such. Additionally, the Company has entered into forbearance agreements for certain project-level financing arrangements and continues to seek forbearance agreements for other project-level financing arrangements affected by the PG&E Bankruptcy. The Company continues to assess the potential future impacts of the PG&E Bankruptcy as events occur. For further discussion see Note 7, Long-term Debt.

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, and the reported amounts of revenues and expenses during the reporting period. Actual results could be different from these estimates.

Cash and 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 project subsidiaries was $95 million and $125 million as of March 31, 2020 and December 31, 2019, 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 statements of cash flows.


	March 31,		December 31,
	2020		2019
	(In millions)
Cash and cash equivalents	$	110	$	155
Restricted cash	270		262
Cash, cash equivalents and restricted cash shown in the statement of cash flows	$	380	$	417

Restricted cash consists primarily of funds held to satisfy the requirements of certain debt agreements and funds held within the Company's projects that are restricted in their use. As of March 31, 2020, these restricted funds were comprised of $111 million designated to fund operating expenses, approximately $35 million designated for current debt service payments, and $46 million restricted for reserves including debt service, performance obligations and other reserves, as well as capital expenditures. The remaining $78 million is held in distributions reserve accounts, of which $68 million related to subsidiaries affected by the PG&E Bankruptcy as discussed in Note 1, Nature of Bu

Price	-0.00	EPS	-1
Shares	193	P/E	0
MCap	-0	P/FCF	-0
Net Debt	5,782	EBIT	184
TEV	5,782	TEV/EBIT	31
TTM 2019-09-30, in MM, except price, ratios

8-K	2020-08-17	Enter Agreement, Exhibits
8-K	2020-05-21
8-K	2020-05-07
8-K	2020-04-30
8-K	2020-02-27
8-K	2020-02-26
8-K	2020-01-06

EX-31.1	clearwayincex3112020q1.htm
EX-31.2	clearwayincex3122020q1.htm
EX-31.3	clearwayincex3132020q1.htm
EX-32	clearwayincex322020q1.htm

10-Q	2020-03-31	Filed 2020-05-07
10-K	2019-12-31	Filed 2020-03-02

CWEN 10Q Quarterly Report

Clearway Energy Earnings 2020-03-31