PRINCETON, N.J., Oct. 30, 2024 (GLOBE NEWSWIRE) — Clearway Energy, Inc. (NYSE: CWEN, CWEN.A) today reported third quarter 2024 financial results, including Net Income of $27 million, Adjusted EBITDA of $354 million, Cash from Operating Activities of $301 million, and Cash Available for Distribution (CAFD) of $146 million.
“Clearway remains well positioned to meet or exceed its 2024 financial objectives, has initiated a 2025 financial guidance range providing for robust growth, and remains committed to the financial objectives previously outlined through 2026,” said Craig Cornelius, Clearway Energy, Inc.’s President and Chief Executive Officer. “With the commitment to Pine Forest and offer to invest in Honeycomb Phase 1, we have further set the stage for sustainable long-term growth. Based on our growth outlook and updated assumptions for levelized resource adequacy pricing, we are targeting CAFD per share of $2.40-2.60 in 2027, which represents approximately 7.5% to 12% annual growth from the midpoint of our 2025 financial guidance. While there is work ahead to achieve the 2027 targets and long-term framework outlined today, the team at Clearway has built a solid foundation for our future as we reach towards the goals we’ve laid out for the years ahead.”
Adjusted EBITDA and Cash Available for Distribution used in this press release are non-GAAP measures and are explained in greater detail under “Non-GAAP Financial Information” below.
Overview of Financial and Operating Results
Segment Results
Table 1: Net Income/(Loss)
| ($ millions) | Three Months Ended | Nine Months Ended | ||||||||||||||
| Segment | 9/30/24 | 9/30/23 | 9/30/24 | 9/30/23 | ||||||||||||
| Conventional | 25 | 38 | 50 | 99 | ||||||||||||
| Renewables | 66 | 62 | 60 | 112 | ||||||||||||
| Corporate | (64 | ) | (85 | ) | (125 | ) | (152 | ) | ||||||||
| Net Income/(Loss) | $ | 27 | $ | 15 | $ | (15 | ) | $ | 59 | |||||||
Table 2: Adjusted EBITDA
| ($ millions) | Three Months Ended | Nine Months Ended | ||||||||||||||
| Segment | 9/30/24 | 9/30/23 | 9/30/24 | 9/30/23 | ||||||||||||
| Conventional | 66 | 84 | 174 | 236 | ||||||||||||
| Renewables | 295 | 246 | 770 | 645 | ||||||||||||
| Corporate | (7 | ) | (7 | ) | (26 | ) | (24 | ) | ||||||||
| Adjusted EBITDA | $ | 354 | $ | 323 | $ | 918 | $ | 857 | ||||||||
Table 3: Cash from Operating Activities and Cash Available for Distribution (CAFD)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| ($ millions) | 9/30/24 | 9/30/23 | 9/30/24 | 9/30/23 | ||||||||||||
| Cash from Operating Activities | $ | 301 | $ | 287 | $ | 578 | $ | 496 | ||||||||
| Cash Available for Distribution (CAFD) | $ | 146 | $ | 156 | $ | 385 | $ | 289 | ||||||||
For the third quarter of 2024, the Company reported Net Income of $27 million, Adjusted EBITDA of $354 million, Cash from Operating Activities of $301 million, and CAFD of $146 million. Net Income increased versus 2023 primarily due to non-cash impacts from the mark to market impact of economic hedges and lower tax expenses partially offset by higher interest expense related to interest rate swaps. Adjusted EBITDA results in the third quarter were higher than 2023 primarily due to the contribution of growth investments partially offset by the expiration of El Segundo’s tolling agreement in the third quarter of 2023. CAFD results in the third quarter of 2024 were lower than 2023 primarily due to the expiration of El Segundo’s tolling agreement partially offset by the contribution of growth investments.
Operational Performance
Table 4: Selected Operating Results1
| (MWh in thousands) | Three Months Ended | Nine Months Ended | ||||||||||||||
| 9/30/24 | 9/30/23 | 9/30/24 | 9/30/23 | |||||||||||||
| Conventional Equivalent Availability Factor | 87.5 | % | 97.9 | % | 90.3 | % | 87.5 | % | ||||||||
| Solar MWh generated/sold | 2,943 | 1,822 | 6,999 | 4,232 | ||||||||||||
| Wind MWh generated/sold | 2,012 | 2,085 | 7,478 | 7,262 | ||||||||||||
| Renewables generated/sold2 | 4,955 | 3,907 | 14,477 | 11,494 | ||||||||||||
In the third quarter of 2024, availability at the Conventional segment was lower than the third quarter of 2023 primarily due to outages at certain facilities. Generation in the Renewables segment during the third quarter of 2024 was 27% higher than the third quarter of 2023 primarily due to the contribution of growth investments partially offset by lower wind resource at certain facilities.
Liquidity and Capital Resources
Table 5: Liquidity
| ($ millions) | 9/30/2024 | 12/31/2023 | ||||||
| Cash and Cash Equivalents: | ||||||||
| Clearway Energy, Inc. and Clearway Energy LLC, excluding subsidiaries | $ | 90 | $ | 410 | ||||
| Subsidiaries | 202 | 125 | ||||||
| Restricted Cash: | ||||||||
| Operating accounts | 183 | 176 | ||||||
| Reserves, including debt service, distributions, performance obligations and other reserves | 199 | 340 | ||||||
| Total Cash | $ | 674 | $ | 1,051 | ||||
| Revolving credit facility availability | 592 | 454 | ||||||
| Total Liquidity | $ | 1,266 | $ | 1,505 | ||||
Total liquidity as of September 30, 2024, was $1,266 million, which was $239 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 September 30, 2024, the Company’s liquidity included $382 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, 2024, these restricted funds were comprised of $183 million designated to fund operating expenses, approximately $71 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 $39 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
Pine Forest
On October 28, 2024, the Company, through an indirect subsidiary, entered into agreements to acquire cash and tax equity interests in a 500 MW solar plus storage project currently under construction in Hopkins County, Texas that is expected to reach commercial operations in 2025 for a total investment of $155 million, subject to closing adjustments. Upon achieving commercial operations, the project’s solar output is underpinned by power purchase agreements with creditworthy counterparties with a weighted average contract duration of approximately 20 years. The consummation of the transactions are 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 $16 million beginning January 1, 2026.
Honeycomb Phase 1 Offer
On October 18, 2024, Clearway Group offered the Company the opportunity to enter into partnership arrangements to own cash equity interests in a portfolio of 320 MW storage hybridization projects that is expected to reach commercial operations in 2026. The potential corporate capital commitment for the investment is expected to be approximately $85 million. The investment is subject to negotiation both with Clearway Group, and the review and approval by the Company’s Independent Directors.
Financing Update
Capistrano Wind Refinancing
On October 23, 2024, the Company, through its indirect subsidiary, Capistrano Portfolio Holdco LLC, entered into a financing agreement which included the issuance of a $121 million term loan as well as $42 million in letters of credit in support of debt service and facility obligations, supported by the Company’s interests in the Broken Bow, Crofton Bluffs, Mountain Wind 1 and Mountain Wind 2 wind facilities. The term loan matures on September 28, 2033. The Company utilized the proceeds from the term loan to pay off the existing debt in the amount of $63 million related to Broken Bow and Crofton Bluffs and to pay related financing costs.
Quarterly Dividend
On October 29, 2024, Clearway Energy, Inc.’s Board of Directors declared a quarterly dividend on Class A and Class C common stock of $0.4240 per share payable on December 16, 2024, to stockholders of record as of December 2, 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.
The Company is initiating a 2025 full year CAFD guidance at a $420 million midpoint and a range of $400 million to $440 million. The midpoint of the 2025 financial guidance range is based on median renewable energy production estimates for the full year, while the range reflects a range of potential distributions of outcomes on resource and performance in the fiscal year. The guidance range also factors in completing committed growth investments on currently forecasted schedules.
About Clearway Energy, Inc.
Clearway Energy, Inc. is one of the largest owners of clean energy generation assets in the US and is leading the transition to a world powered by clean energy. Our portfolio comprises approximately 11.7 GW of gross capacity in 26 states, including 9 GW of wind, solar, and energy storage and over 2.7 GW of dispatchable power generation providing critical grid reliability services. Through our diversified and primarily contracted clean energy portfolio, Clearway Energy endeavors to provide our 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 our controlling investor, Clearway Energy Group LLC. For more information, visit investor.clearwayenergy.com.
