PRINCETON, N.J., Aug. 01, 2024 (GLOBE NEWSWIRE) — Clearway Energy, Inc. (NYSE: CWEN, CWEN.A) today reported second quarter 2024 financial results, including Net Income of $4 million, Adjusted EBITDA of $353 million, Cash from Operating Activities of $196 million, and Cash Available for Distribution (CAFD) of $187 million.
“Following another solid quarter that benefited from our operating fleet’s diversification, Clearway remains well positioned to achieve its 2024 financial objectives,” said Craig Cornelius, Clearway Energy, Inc.’s President and Chief Executive Officer. “With the upsized growth investment commitment to the Luna Valley and Daggett 1 projects, we have now committed to deploying all of the excess proceeds received from the sale of our district thermal business and established our path to achieve the financial objectives we had set through 2026. We are also pleased to be continuing our path towards realizing CAFD per share growth contributions from our natural gas assets with the announcement of our latest resource adequacy contract for Marsh Landing. As we look further ahead, we have in view a number of levers for increased long-term CAFD per share growth. Among these are potential future growth investments in the Pine Forest and Honeycomb project complexes and targeted 3rd party M&A opportunities – each of which can be funded accretively with current liquidity and organic cash flow received from our portfolio over time.”
Adjusted EBITDA and Cash Available for Distribution used in this press release are non-GAAP measures and are explained in greater detail under “Non-GAAP Financial Information” below.
Overview of Financial and Operating Results
Segment Results
Table 1: Net Income/(Loss)
| ($ millions) | Three Months Ended | Six Months Ended | ||||||||||||||
| Segment | 6/30/24 | 6/30/23 | 6/30/24 | 6/30/23 | ||||||||||||
| Conventional | 9 | 37 | 25 | 61 | ||||||||||||
| Renewables | 38 | 98 | (6 | ) | 50 | |||||||||||
| Corporate | (43 | ) | (51 | ) | (61 | ) | (67 | ) | ||||||||
| Net Income/(Loss) | $ | 4 | $ | 84 | $ | (42 | ) | $ | 44 | |||||||
Table 2: Adjusted EBITDA
| ($ millions) | Three Months Ended | Six Months Ended | ||||||||||||||
| Segment | 6/30/24 | 6/30/23 | 6/30/24 | 6/30/23 | ||||||||||||
| Conventional | 57 | 76 | 108 | 152 | ||||||||||||
| Renewables | 306 | 248 | 475 | 399 | ||||||||||||
| Corporate | (10 | ) | (8 | ) | (19 | ) | (17 | ) | ||||||||
| Adjusted EBITDA | $ | 353 | $ | 316 | $ | 564 | $ | 534 | ||||||||
Table 3: Cash from Operating Activities and Cash Available for Distribution (CAFD)
| Three Months Ended | Six Months Ended | |||||||||||
| ($ millions) | 6/30/24 | 6/30/23 | 6/30/24 | 6/30/23 | ||||||||
| Cash from Operating Activities | $ | 196 | $ | 134 | $ | 277 | $ | 209 | ||||
| Cash Available for Distribution (CAFD) | $ | 187 | $ | 137 | $ | 239 | $ | 133 | ||||
For the second quarter of 2024, the Company reported Net Income of $4 million, Adjusted EBITDA of $353 million, Cash from Operating Activities of $196 million, and CAFD of $187 million. Net Income decreased versus 2023 primarily due to non-cash impacts from the mark to market impact of economic hedges. Adjusted EBITDA results in the second quarter were higher than 2023 primarily due to higher renewable production at certain facilities and the contribution of growth investments. CAFD results in the second quarter of 2024 were higher than 2023 primarily due to higher EBITDA and lower debt service in the Conventional fleet coinciding with the expiration of the tolling agreements.
Operational Performance
Table 4: Selected Operating Results1
| (MWh in thousands) | Three Months Ended | Six Months Ended | ||||||||||
| 6/30/24 | 6/30/23 | 6/30/24 | 6/30/23 | |||||||||
| Conventional Equivalent Availability Factor | 97.1 | % | 90.1 | % | 91.7 | % | 82.3 | % | ||||
| Solar MWh generated/sold | 2,613 | 1,544 | 4,056 | 2,410 | ||||||||
| Wind MWh generated/sold | 2,947 | 2,433 | 5,466 | 5,177 | ||||||||
| Renewables generated/sold2 | 5,560 | 3,977 | 9,522 | 7,587 | ||||||||
In the second quarter of 2024, availability at the Conventional segment was higher than the second quarter of 2023 primarily due to longer planned maintenance in 2023 and strong operational performance in 2024. Generation in the Renewables segment during the second quarter of 2024 was 40% higher than the second quarter of 2023 primarily due to the contribution of growth investments as well as higher wind resource at certain facilities.
Liquidity and Capital Resources
Table 5: Liquidity
| ($ millions) | 6/30/2024 | 12/31/2023 | ||||
| Cash and Cash Equivalents: | ||||||
| Clearway Energy, Inc. and Clearway Energy LLC, excluding subsidiaries | $ | 35 | $ | 410 | ||
| Subsidiaries | 191 | 125 | ||||
| Restricted Cash: | ||||||
| Operating accounts | 169 | 176 | ||||
| Reserves, including debt service, distributions, performance obligations and other reserves | 175 | 340 | ||||
| Total Cash | $ | 570 | $ | 1,051 | ||
| Revolving credit facility availability | 495 | 454 | ||||
| Total Liquidity | $ | 1,065 | $ | 1,505 | ||
Total liquidity as of June 30, 2024, was $1,065 million, which was $440 million lower than as of December 31, 2023, primarily due to the execution of growth investments including payments for Cedar Creek, Victory Pass, Arica and the Rosie BESS assets.
As of June 30, 2024, the Company’s liquidity included $344 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 June 30, 2024, these restricted funds were comprised of $169 million designated to fund operating expenses, approximately $42 million designated for current debt service payments, and $89 million of reserves for debt service, performance obligations and other items including capital expenditures. The remaining $44 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
Resource Adequacy Agreement at Marsh Landing
On July 31, 2024, the Company contracted with a load serving entity to sell approximately 195 MW of Marsh Landing’s RA commencing in October 2026 and ending in December 2028. Marsh Landing is now contracted for approximately 99% of its capacity through 2027 at terms providing for higher project level CAFD in 2027 relative to current run-rate expectations.
Pine Forest Offer
On July 19, 2024, Clearway Group offered the Company the opportunity to enter into partnership arrangements to own cash equity interests in a 500 MW solar plus storage project that is expected to reach commercial operations in 2025. The potential corporate capital commitment for the investment is expected to be approximately $155 million. The investment is subject to negotiation both with Clearway Group, and the review and approval by the Company’s Independent Directors.
Luna Valley and Daggett 1 Storage
On June 27, 2024, the Company, through an indirect subsidiary, entered into an agreement to acquire cash equity interests in Luna Valley, a 200 MW solar facility currently under construction in Fresno County, California, and Daggett 1, a 114 MW BESS facility currently under construction in San Bernardino, California, for $143 million in cash consideration, subject to closing adjustments. Upon achieving commercial operations, the projects are underpinned by power purchase agreements with creditworthy counterparties with a weighted average contract duration of over 16 years. The consummation of the transaction is subject to customary closing conditions and certain third-party approvals and is expected in the second half of 2025. The Company expects the projects to contribute asset CAFD on a five-year average annual basis of approximately $14 million beginning January 1, 2026.
Financing Update
NIMH Solar Refinancing
On June 11, 2024, NIMH Solar LLC refinanced the amended and restated credit agreement, which included the issuance of a $137 million term loan facility, as well as $17 million in letters of credit in support of debt service and facility obligations. The obligations under the financing arrangement are supported by the Company’s interests in the Alpine, Blythe and Roadrunner solar facilities. The Company utilized the proceeds from the term loan and existing sources of liquidity to pay off the existing debt in the amount of $146 million. The refinancing resulted in no material change to the Company’s run-rate CAFD expectations for the underlying projects.
Natural Gas CA Holdco LLC LC Facility
On July 25, 2024, the Company, through its indirect subsidiary, Natural Gas CA Holdco LLC, entered into a financing agreement that provides for a $200 million letter of credit facility, which will be utilized to support the collateral needs of the Company’s merchant conventional facilities and will free up capacity on the Company’s corporate revolving credit facility.
Quarterly Dividend
On August 1, 2024, Clearway Energy, Inc.’s Board of Directors declared a quarterly dividend on 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.
Seasonality
Clearway Energy, Inc.’s quarterly operating results are impacted by seasonal factors, as well as weather variability which can impact renewable energy resource throughout the year. 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;
- Renewable energy resource throughout the year
- 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 reaffirming its 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 and estimates for merchant energy gross margin at the conventional fleet. 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. 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 owners of clean energy generation assets in the US. The Company’s fleet comprises approximately 9,000 MW of net owned generating capacity in 26 states, including over 6,500 MW of wind, solar, and energy storage assets, and approximately 2,500 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.
