Clearway Energy, Inc. [CWEN] Filings

10-Q 1 cwen-20230930.htm 10-Q cwen-20230930

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 September 30, 2023


☐			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 October 31, 2023, 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, 82,390,447 shares of Class C common stock outstanding, par value $0.01 per share, and 42,336,750 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			36
ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			54
ITEM 4 — CONTROLS AND PROCEDURES			55
PART II — OTHER INFORMATION			56
ITEM 1 — LEGAL PROCEEDINGS			56
ITEM 1A — RISK FACTORS			56
ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			56
ITEM 3 — DEFAULTS UPON SENIOR SECURITIES			56
ITEM 4 — MINE SAFETY DISCLOSURES			56
ITEM 5 — OTHER INFORMATION			56
ITEM 6 — EXHIBITS			57
SIGNATURES			58

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, 2022, 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 GIP, TotalEnergies and CEG;

•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 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 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
ASU			Accounting Standards Updates - updates to the ASC
ATM Program			At-The-Market Equity Offering Program
Bridge Loan Agreement			Senior secured bridge credit agreement entered into by Clearway Energy Operating LLC that provided a term loan facility in an aggregate principal amount of $335 million that was repaid on May 3, 2022
BESS			Battery energy storage system
Black Start			The capability of a generating asset to restore the grid in the event of a blackout without relying on the external electric power transmission network
CAFD			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
Capistrano Wind Portfolio			Five wind projects representing 413 MW of capacity, which includes Broken Bow and Crofton Bluffs located in Nebraska, Cedro Hill located in Texas and Mountain Wind Power I and II located in Wyoming
CEG			Clearway Energy Group LLC (formerly Zephyr Renewables LLC)
CEG Master Services Agreements			Master Services Agreements entered into as of August 31, 2018 and amended on February 2, 2023 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, and Clearway Energy, Inc., the holder of the Class A and Class C units
Clearway Energy Group LLC			The holder of all 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 the project assets that are owned by Clearway Energy LLC
Clearway Renew			Clearway Renew LLC, a subsidiary of CEG

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 projects, 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



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			Global Infrastructure Partners
HLBV			Hypothetical Liquidation at Book Value
IRA			Inflation Reduction Act of 2022
ITC			Investment Tax Credit
KKR			KKR Thor Bidco, LLC, an affiliate of Kohlberg Kravis Roberts & Co. L.P.
LIBOR			London Inter-Bank Offered Rate

Mesquite Star			Mesquite Star Special LLC

Mt. Storm			NedPower Mount Storm LLC
MW			Megawatt
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
NPNS			Normal Purchases and Normal Sales


OCI/OCL			Other comprehensive income/loss
O&M			Operations and Maintenance
PG&E			Pacific Gas and Electric Company
PPA			Power Purchase Agreement
PTC			Production Tax Credit

RA			Resource adequacy
RENOM			Clearway Renewable Operation & Maintenance LLC
Rosie Central BESS			Rosie BESS Devco LLC


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

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

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 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
VIE			Variable Interest Entity

PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

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

See accompanying notes to consolidated financial statements.

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

See accompanying notes to consolidated financial statements.

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

See accompanying notes to consolidated financial statements.

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

See accompanying notes to consolidated financial statements.

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

See accompanying notes to consolidated financial statements.

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

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.

The Company is one of the largest renewable energy owners in the U.S. with over 5,500 net MW of installed wind and solar generation projects. The Company’s over 8,000 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 September 30, 2023, the Company owned 57.90% of the economic interests of Clearway Energy LLC, with CEG owning 42.10% of the economic interests of Clearway Energy LLC.

The following table represents a summarized structure of the Company as of September 30, 2023:

Clearway org picture as of 6.30.23 - 07.05.2023v3.jpg

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 2022 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 September 30, 2023, and results of operations, comprehensive income and cash flows for the three and nine months ended September 30, 2023 and 2022.

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 project subsidiaries was $125 million and $121 million as of September 30, 2023 and December 31, 2022, 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:


	September 30, 2023		December 31, 2022
	(In millions)
Cash and cash equivalents	$	566	$	657
Restricted cash	590		339
Cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	$	1,156	$	996

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 September 30, 2023, these restricted funds were comprised of $160 million designated to fund operating expenses, $316 million designated for current debt service payments and $85 million restricted for reserves including debt service, performance obligations and other reserves as well as capital expenditures. The remaining $29 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:


	Nine months ended September 30,
	2023		2022
	(In millions)
Cash paid to acquire Drop Down Assets	$	(34)	$	(51)
Cash acquired from the acquisition of Drop Down Assets	134		—
Acquisition of Drop Down Assets, net of cash acquired	$	100	$	(51)

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:


	September 30, 2023		December 31, 2022
	(In millions)
Property, Plant and Equipment Accumulated Depreciation	$	3,357	$	3,024
Intangible Assets Accumulated Amortization	1,018		877

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 nine months ended September 30, 2023:


	Third Quarter 2023		Second Quarter 2023		First Quarter 2023
Dividends per Class A share	$	0.3891	$	0.3818	$	0.3745
Dividends per Class C share	0.3891		0.3818		0.3745

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 November 1, 2023, the Company declared quarterly dividends on its 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.

Noncontrolling Interests

Clearway Energy LLC Distributions to CEG

The following table lists distributions paid to CEG during the nine months ended September 30, 2023 on Clearway Energy LLC’s Class B and D units:


	Third Quarter 2023		Second Quarter 2023		First Quarter 2023
Distributions per Class B Unit	$	0.3891	$	0.3818	$	0.3745
Distributions per Class D Unit	0.3891		0.3818		0.3745

In addition to the quarterly distributions paid to CEG, Clearway Energy LLC distributed an additional $21 million to CEG during the nine months ended September 30, 2023, which represents CEG’s pro-rata share of distributions that were paid in order for the Company to make certain additional tax payments primarily associated with the sale of the Thermal Business. The Company’s share of the distribution was $29 million.

On November 1, 2023, Clearway Energy LLC declared a distribution on its Class B and Class D units of $0.3964 per unit payable on December 15, 2023 to unit holders of record as of December 1, 2023.

Redeemable Noncontrolling Interests

To the extent that a third party has the right to redeem their interests for cash or other assets, the Company has included the noncontrolling interest attributable to the third party as a component of temporary equity in the mezzanine section of the consolidated balance sheet. The following table reflects the changes in the Company’s redeemable noncontrolling interest balance:


	(In millions)
Balance at December 31, 2022	$	7
Cash distributions to redeemable noncontrolling interests	(3)
Comprehensive income attributable to redeemable noncontrolling interests	14
Balance at September 30, 2023	$	18

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 September 30, 2023
(In millions)	Conventional Generation		Renewables		Total
Energy revenue (a)	$	57	$	280	$	337
Capacity revenue (a)	74		5		79
Other revenue	3		17		20
Contract amortization	(5)		(42)		(47)
Mark-to-market for economic hedges	3		(21)		(18)
Total operating revenues	132		239		371
Less: Mark-to-market for economic hedges	(3)		21		18
Less: Lease revenue	(41)		(233)		(274)
Less: Contract amortization	5		42		47
Total revenue from contracts with customers	$	93	$	69	$	162

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


(In millions)	Conventional Generation		Renewables		Total
Energy revenue	$	2	$	228	$	230
Capacity revenue	39		5		44

Total	$	41	$	233	$	274


	Three months ended September 30, 2022
(In millions)	Conventional Generation		Renewables		Total
Energy revenue (a)	$	2	$	272	$	274
Capacity revenue (a)	106		1		107
Other revenue	—		18		18
Contract amortization	(6)		(36)		(42)
Mark-to-market for economic hedges	—		(17)		(17)
Total operating revenues	102		238		340
Less: Mark-to-market for economic hedges	—		17		17
Less: Lease revenue	(108)		(226)		(334)
Less: Contract amortization	6		36		42
Total revenue from contracts with customers	$	—	$	65	$	65

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


(In millions)	Conventional Generation		Renewables		Total
Energy revenue	$	2	$	226	$	228
Capacity revenue	106		—		106
Total	$	108	$	226	$	334


	Nine months ended September 30, 2023
(In millions)	Conventional Generation		Renewables		Total
Energy revenue (a)	$	61	$	753	$	814
Capacity revenue (a)	270		15		285
Other revenue (a)	24		56		80
Contract amortization	(16)		(125)		(141)
Mark-to-market for economic hedges	3		24		27
Total operating revenues	342		723		1,065
Less: Mark-to-market for economic hedges	(3)		(24)		(27)
Less: Lease revenue	(246)		(626)		(872)
Less: Contract amortization	16		125		141
Total revenue from contracts with customers	$	109	$	198	$	307

Clearway Energy, Inc. [CWEN] Filings
Clearway Energy, Inc. [CWEN-A] Filings
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