Clearway Energy Reports Third Quarter 2023 Financial Results

PRINCETON, N.J., Nov. 02, 2023 (GLOBE NEWSWIRE) — Clearway Energy, Inc. (NYSE: CWEN, CWEN.A) today reported third quarter 2023 financial results, including Net Income of $15 million, Adjusted EBITDA of $323 million, Cash from Operating Activities of $287 million, and Cash Available for Distribution (CAFD) of $156 million.

“Clearway continues to expect 2023 full year results to be within the revised guidance range and has made further progress on executing toward its long-term objective to deliver at the upper range of its dividend growth target through 2026 without external debt or equity. With the commitment to invest in the Texas Solar Nova projects and the recent projects offered to CWEN, we now have full visibility into the deployment of the excess Thermal proceeds through commitments or offers. Importantly, the recent commitment and offers from our sponsor are at attractive economics and reflect the ability of the Clearway enterprise to adapt to the current capital markets environment,” said Christopher Sotos, Clearway Energy, Inc.’s President and Chief Executive Officer. “We are fortunate to have a sponsor who’s aligned with our disciplined capital allocation criteria. I remain confident that in partnership with our Board and sponsor, we can allocate capital to both drive CAFD per share growth and create long-term value creation for our investors.”

Adjusted EBITDA and Cash Available for Distribution used in this press release are non-GAAP measures and are explained in greater detail under “Non-GAAP Financial Information” below.

Overview of Financial and Operating Results

Segment Results

Table 1: Net Income/(Loss)

($ millions) Three Months Ended Nine Months Ended
Segment 9/30/23 9/30/22 9/30/23 9/30/22
Conventional 38 41 99 121
Renewables 62 62 112 26
Thermal 17
Corporate (85 ) (41 ) (152 ) 950
Net Income/(Loss) $ 15 $ 62 $ 59 $ 1,114


Table 2: Adjusted EBITDA

($ millions) Three Months Ended Nine Months Ended
Segment 9/30/23 9/30/22 9/30/23 9/30/22
Conventional 84 94 236 277
Renewables 246 236 645 675
Thermal 23
Corporate (7 ) (8 ) (24 ) (27 )
Adjusted EBITDA $ 323 $ 322 $ 857 $ 948


Table 3: Cash from Operating Activities and Cash Available for Distribution (CAFD)

Three Months Ended Nine Months Ended
($ millions) 9/30/23 9/30/22 9/30/23 9/30/22
Cash from Operating Activities $ 287 $ 328 $ 496 $ 607
Cash Available for Distribution (CAFD) $ 156 $ 154 $ 289 $ 328

For the third quarter of 2023, the Company reported Net Income of $15 million, Adjusted EBITDA of $323 million, Cash from Operating Activities of $287 million, and CAFD of $156 million. Net Income decreased versus 2022 primarily due to non-cash tax expenses from allocations of taxable earnings and losses from HLBV method accounting. Adjusted EBITDA results in the third quarter were in-line with 2022 as lower renewable production at certain sites and the expiration of certain tolling agreements in the Conventional fleet was offset by the contribution of growth investments. CAFD results in the third quarter of 2023 were in-line with 2022 as lower renewable production at certain sites was offset by the contribution of growth investments.

Operational Performance

Table 4: Selected Operating Results1

(MWh in thousands) Three Months Ended Nine Months Ended
9/30/23 9/30/22 9/30/23 9/30/22
Conventional Equivalent Availability Factor 97.9 % 93.9 % 87.5 % 92.5 %
Solar MWh generated/sold 1,822 1,473 4,232 4,071
Wind MWh generated/sold 2,085 1,894 7,262 7,031
Renewables generated/sold2 3,907 3,367 11,494 11,102

In the third quarter of 2023, availability at the Conventional segment was higher than the third quarter of 2022 primarily due to forced outages in 2022. Generation in the Renewables segment during the third quarter of 2023 was 16% higher than the third quarter of 2022 primarily due to the contribution of growth investments.

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1 Excludes equity method investments
2 Generation sold excludes MWh that are reimbursable for economic curtailment

Liquidity and Capital Resources

Table 5: Liquidity

($ millions) 9/30/2023 12/31/2022
Cash and Cash Equivalents:
Clearway Energy, Inc. and Clearway Energy LLC, excluding subsidiaries $ 441 $ 536
Subsidiaries 125 121
Restricted Cash:
Operating accounts 160 109
Reserves, including debt service, distributions, performance obligations and other reserves 430 230
Total Cash $ 1,156 $ 996
Revolving credit facility availability 489 370
Total Liquidity $ 1,645 $ 1,366

Total liquidity as of September 30, 2023, was $1,645 million, which was $279 million higher than as of December 31, 2022, primarily due to the refinancing of the revolving credit facility which increased its total capacity to $700 million from $495 million and additional project level restricted cash associated with growth investments, partially offset by the execution of growth investments.

As of September 30, 2023, the Company’s liquidity included $590 million of restricted cash. Restricted cash consists primarily of funds to satisfy the requirements of certain debt arrangements and funds held within the Company’s projects that are restricted in their use. As of September 30, 2023, these restricted funds were comprised of $160 million designated to fund operating expenses, approximately $316 million designated for current debt service payments, and $85 million of reserves for debt service, performance obligations and other items including capital expenditures. The remaining $29 million is held in distribution reserve accounts.

Potential future sources of liquidity include excess operating cash flow, availability under the revolving credit facility, asset dispositions, and, subject to market conditions, new corporate debt and equity financings.

Growth Investments and Strategic Announcements

Texas Solar Nova 1 and Texas Solar Nova 2

On August 30, 2023, the Company, through an indirect subsidiary, entered into an agreement to acquire interests in Texas Solar Nova 1 and Texas Solar Nova 2, 452 MW of solar projects under construction in Kent County, Texas, upon the projects meeting certain milestones. Upon achieving commercial operations the projects are underpinned by power purchase agreements with creditworthy counterparties with a weighted average contract duration of approximately 18 years. The Company expects to invest approximately $40 million, subject to closing adjustments. Commercial operations of the facilities and the Company’s investment are expected to occur between the fourth quarter of 2023 and first half of 2024. The Company expects the projects to contribute asset CAFD on a five-year average annual basis of approximately $4 million beginning January 1, 2025.

Enhanced Offer to Invest in Dan’s Mountain Wind

On October 16, 2023, Clearway Group provided an updated offer providing the Company the opportunity to own 100% cash equity interest in a 55 MW wind project located in Allegany County, Maryland that is expected to reach commercial operations in the first half of 2025. The potential corporate capital commitment for the investment is expected to be approximately $86 million. The investment is subject to negotiation, both with Clearway Group and the review and approval by the Company’s Independent Directors.

Offer to Invest in 572 MW of Solar Plus Storage Projects

On October 16, 2023, Clearway Group offered the Company opportunities to enter into partnership arrangements to own cash equity interests in 572 MW of solar plus storage projects that are expected to reach commercial operations in 2025. The potential corporate capital commitment for the investments are expected to be approximately $105 million. The investments are subject to negotiation both with Clearway Group, and the review and approval by the Company’s Independent Directors.

Resource Adequacy Agreements

During the third quarter, the Company signed contracts with California Load Serving Entities to sell Resource Adequacy for the following assets:

  • Marsh Landing: The Company contracted with a load serving entity to sell approximately 400 MW of Resource Adequacy commencing September 2026 and ending December 2027. As of the end of the third quarter, 100% of Marsh Landing’s net qualifying capacity is contracted through 2026. 63% of the project’s net qualifying capacity is contracted in 2027 at terms providing for higher project level CAFD in 2027 relative to current run-rate expectations.
  • El Segundo: The Company contracted with a load serving entity to sell approximately 274 MW of Resource Adequacy commencing August 2026 and ending December 2027. As of the end of the third quarter, 100% of El Segundo’s net qualifying capacity is contracted through 2026. Approximately 50% of the project’s net qualifying capacity is contracted in 2027 at terms providing for higher project level CAFD in 2027 relative to current run-rate expectations.

Quarterly Dividend

On November 1, 2023, Clearway Energy, Inc.’s Board of Directors declared a quarterly dividend on Class A and Class C common stock of $0.3964 per share payable on December 15, 2023, to stockholders of record as of December 1, 2023.

The Company anticipates that a portion of the dividends expected to be paid in 2023 and beyond may be treated as taxable for U.S. federal income tax purposes. The portion of dividends in future years that will be treated as taxable will depend upon a number of factors, including but not limited to, the Company’s overall performance and the gross amount of any dividends made to stockholders in 2023 and beyond.

Seasonality

Clearway Energy, Inc.’s quarterly operating results are impacted by seasonal factors, as well as weather variability which can impact renewable energy resource. Most of the Company’s revenues are generated from the months of May through September, as contracted pricing and renewable resources are at their highest levels in the Company’s portfolio. Factors driving the fluctuation in Net Income, Adjusted EBITDA, Cash from Operating Activities, and CAFD include the following:

  • Higher summer capacity and energy prices from conventional assets;
  • Higher solar insolation during the summer months;
  • Higher wind resources during the spring and summer months;
  • Debt service payments which are made either quarterly or semi-annually;
  • Timing of maintenance capital expenditures and the impact of both unforced and forced outages; and
  • Timing of distributions from unconsolidated affiliates

The Company takes into consideration the timing of these factors to ensure sufficient funds are available for distributions and operating activities on a quarterly basis.

Financial Guidance

The Company is reiterating its 2023 full year CAFD guidance range of $330 million to $360 million.

The Company is initiating 2024 full year CAFD guidance of $395 million. The Company’s 2024 financial guidance factors in the contribution of committed growth investments based on current expected closing timelines. 2024 CAFD guidance does not factor in the timing of when CAFD is realized from new growth investments pursuant to 5-year averages beyond 2024. 2024 financial guidance is based on median renewable energy production estimates for the full year.

About Clearway Energy, Inc.

Clearway Energy, Inc. is one of the largest renewable energy owners in the US with over 5,500 net MW of installed wind and solar generation projects. The Company’s over 8,000 net MW of assets also include approximately 2,500 net MW of environmentally-sound, highly efficient natural gas generation facilities. Through this environmentally-sound diversified and primarily contracted portfolio, Clearway Energy endeavors to provide its investors with stable and growing dividend income. Clearway Energy, Inc.’s Class C and Class A common stock are traded on the New York Stock Exchange under the symbols CWEN and CWEN.A, respectively. Clearway Energy, Inc. is sponsored by its controlling investor, Clearway Energy Group LLC. For more information, visit investor.clearwayenergy.com.