- Signed agreement with
Clearway Group to commit to invest in the 452 MW Texas Solar Nova solar projects - Received enhanced offer from
Clearway Group to invest in Dan's Mountain Wind - Received offer from
Clearway Group to invest in 572 MW of solar plus storage projects - Entered into new Resource Adequacy contracts for
Marsh Landing andEl Segundo - Reiterating 2023 financial guidance range and initiating 2024 financial guidance
- Increasing the quarterly dividend by 2% to
$0.3964 per share in the fourth quarter of 2023, or$1.5856 per share annualized. Achieved 8% dividend per share growth in 2023 - Continue to target annual dividend per share growth in the upper range of 5% to 8% through 2026
"Clearway continues to expect 2023 full year results to be within the revised guidance range and has made further progress on executing toward its long-term objective to deliver at the upper range of its dividend growth target through 2026 without external debt or equity. With the commitment to invest in the Texas Solar Nova projects and the recent projects offered to CWEN, we now have full visibility into the deployment of the excess Thermal proceeds through commitments or offers. Importantly, the recent commitment and offers from our sponsor are at attractive economics and reflect the ability of the Clearway enterprise to adapt to the current capital markets environment,” said
Adjusted EBITDA and Cash Available for Distribution used in this press release are non-GAAP measures and are explained in greater detail under “Non-GAAP Financial Information” below.
Overview of Financial and Operating Results
Segment Results
Table 1: Net Income/(Loss)
($ millions) | Three Months Ended | Nine Months Ended | ||||||||||||||
Segment | ||||||||||||||||
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 | ||||||||||||||||
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) | ||||||||||||||||
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
Operational Performance
Table 4: Selected Operating Results1
(MWh in thousands) | Three Months Ended | Nine Months Ended | ||||||||||
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.
________________________
1 Excludes equity method investments
2 Generation sold excludes MWh that are reimbursable for economic curtailment
Liquidity and Capital Resources
Table 5: Liquidity
($ millions) | ||||||||
Cash and Cash Equivalents: | ||||||||
$ | 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
As of
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
Enhanced Offer to Invest in Dan's Mountain Wind
On
Offer to Invest in 572 MW of Solar Plus Storage Projects
On
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 commencingSeptember 2026 and endingDecember 2027 . As of the end of the third quarter, 100% ofMarsh 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 commencingAugust 2026 and endingDecember 2027 . As of the end of the third quarter, 100% ofEl 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
The Company anticipates that a portion of the dividends expected to be paid in 2023 and beyond may be treated as taxable for
Seasonality
- 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
The Company is initiating 2024 full year CAFD guidance of
Earnings Conference Call
On
About
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, and typically can be identified by the use of words such as “expect,” “estimate,” "target," “anticipate,” “forecast,” “plan,” “outlook,” “believe” and similar terms. Such forward-looking statements include, but are not limited to, statements regarding, the Company’s dividend expectations and its operations, its facilities and its financial results, impacts related to COVID-19 (including any variant of the virus) or any other pandemic, statements regarding the
anticipated consummation of the transactions described above, the anticipated benefits, opportunities, and results with respect to the transactions, including the Company’s future relationship and arrangements with
Although
Contacts:
Investors: investor.relations@clearwayenergy.com 609-608-1500 | Media: media@clearwayenergy.com 202-836-5754 | |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
(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 | $ | 4 | $ | 32 | $ | 42 | $ | 570 | |||||||
Earnings Per Share Attributable to | |||||||||||||||
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 | $ | 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 | $ | 0.3891 | $ | 0.3604 | $ | 1.1454 | $ | 1.0608 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
(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 | 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 | $ | 6 | $ | 36 | $ | 44 | $ | 582 |
CONSOLIDATED BALANCE SHEETS | |||||||
(In millions, except shares) | |||||||
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, | — | — | |||||
Class A, Class B, Class C and Class D common stock, | 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 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
Nine months ended | |||||||
(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 | — | |||||
(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 | ) | |||
(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 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Nine Months Ended (Unaudited) | |||||||||||||||||||||||||
(In millions) | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||
Balances at | $ | — | $ | 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 | — | 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 | — | 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 | $ | — | $ | 1 | $ | 1,728 | $ | 370 | $ | 11 | $ | 2,140 | $ | 4,250 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the Nine Months Ended (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 | $ | — | $ | 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 | — | 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 | $ | — | $ | 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 | — | — | — | — | — | (69 | ) | (69 | ) | ||||||||||||||||
Common stock dividends and distributions to CEG unit holders | — | — | — | (42 | ) | — | (31 | ) | (73 | ) | |||||||||||||||
Balances at | $ | — | $ | 1 | $ | 1,786 | $ | 494 | $ | 10 | $ | 1,818 | $ | 4,109 |
Appendix Table A-1: Three Months Ended
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):
($ in millions) | Conventional | Renewables | Thermal | Corporate | Total | |||||||||||||||
Net Income (Loss) | $ | 38 | $ | 62 | $ | — | $ | (85 | ) | $ | 15 | |||||||||
Plus: | ||||||||||||||||||||
Income Tax Expense | — | — | — | 57 | 57 | |||||||||||||||
Interest Expense, net | 7 | 8 | — | 19 | 34 | |||||||||||||||
Depreciation, Amortization, and ARO | 33 | 100 | — | — | 133 | |||||||||||||||
Contract Amortization | 5 | 42 | — | — | 47 | |||||||||||||||
Mark to Market (MtM) (Gain)/Loss on economic hedges | (3 | ) | 21 | — | — | 18 | ||||||||||||||
Transaction and integration costs | — | — | — | 1 | 1 | |||||||||||||||
Other non-recurring | 1 | — | — | — | 1 | |||||||||||||||
Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates | 3 | 13 | — | — | 16 | |||||||||||||||
Non-Cash Equity Compensation | — | — | — | 1 | 1 | |||||||||||||||
Adjusted EBITDA | $ | 84 | $ | 246 | $ | — | $ | (7 | ) | $ | 323 |
Appendix Table A-2: Three Months Ended
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):
($ in millions) | Conventional | Renewables | Thermal | Corporate | Total | |||||||||||||||
Net Income (Loss) | $ | 41 | $ | 62 | $ | — | $ | (41 | ) | $ | 62 | |||||||||
Plus: | ||||||||||||||||||||
Income Tax Expense | — | — | — | 13 | 13 | |||||||||||||||
Interest Expense, net | 11 | 14 | — | 20 | 45 | |||||||||||||||
Depreciation, Amortization, and ARO | 33 | 96 | — | — | 129 | |||||||||||||||
Contract Amortization | 6 | 36 | — | — | 42 | |||||||||||||||
Mark to Market (MtM) (Gain)/Loss on economic hedges | — | 17 | — | — | 17 | |||||||||||||||
Other non-recurring | — | 1 | — | — | 1 | |||||||||||||||
Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates | 3 | 10 | — | — | 13 | |||||||||||||||
Adjusted EBITDA | $ | 94 | $ | 236 | $ | — | $ | (8 | ) | $ | 322 |
Appendix Table A-3: Nine Months Ended
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):
($ in millions) | Conventional | Renewables | Thermal | Corporate | Total | |||||||||||||||
Net Income (Loss) | $ | 99 | $ | 112 | $ | — | $ | (152 | ) | $ | 59 | |||||||||
Plus: | ||||||||||||||||||||
Income Tax Expense | — | — | — | 67 | 67 | |||||||||||||||
Interest Expense, net | 24 | 91 | — | 55 | 170 | |||||||||||||||
Depreciation, Amortization, and ARO | 98 | 291 | — | — | 389 | |||||||||||||||
Contract Amortization | 16 | 125 | — | — | 141 | |||||||||||||||
Mark to Market (MtM) (Gain)/Loss on economic hedges | (3 | ) | (24 | ) | — | — | (27 | ) | ||||||||||||
Transaction and Integration costs | — | — | — | 3 | 3 | |||||||||||||||
Other Non-recurring | (7 | ) | 5 | — | — | (2 | ) | |||||||||||||
Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates | 9 | 45 | — | — | 54 | |||||||||||||||
Non-Cash Equity Compensation | — | — | — | 3 | 3 | |||||||||||||||
Adjusted EBITDA | $ | 236 | $ | 645 | $ | — | $ | (24 | ) | $ | 857 |
Appendix Table A-4: Nine Months Ended
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):
($ in millions) | Conventional | Renewables | Thermal | Corporate | Total | |||||||||||||||
Net Income (Loss) | $ | 121 | $ | 26 | $ | 17 | $ | 950 | $ | 1,114 | ||||||||||
Plus: | ||||||||||||||||||||
Income Tax Expense | — | — | — | 237 | 237 | |||||||||||||||
Interest Expense, net | 29 | 32 | 6 | 70 | 137 | |||||||||||||||
Depreciation, Amortization, and ARO | 99 | 280 | — | — | 379 | |||||||||||||||
Contract Amortization | 18 | 107 | — | — | 125 | |||||||||||||||
Loss on Debt Extinguishment | — | 2 | — | — | 2 | |||||||||||||||
Mark to Market (MtM) (Gain)/Loss on economic hedges | — | 195 | — | — | 195 | |||||||||||||||
Transaction and Integration costs | — | — | — | 5 | 5 | |||||||||||||||
Other Non-recurring | 1 | 1 | — | (1,291 | ) | (1,289 | ) | |||||||||||||
Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates | 9 | 32 | — | — | 41 | |||||||||||||||
Non-Cash Equity Compensation | — | — | — | 2 | 2 | |||||||||||||||
Adjusted EBITDA | $ | 277 | $ | 675 | $ | 23 | $ | (27 | ) | $ | 948 |
Appendix Table A-5: Cash Available for Distribution Reconciliation
The following table summarizes the calculation of Cash Available for Distribution and provides a reconciliation to Cash from Operating Activities:
Three Months Ended | Nine Months Ended | ||||||||||||||
($ in millions) | |||||||||||||||
Adjusted EBITDA | $ | 323 | $ | 322 | $ | 857 | $ | 948 | |||||||
Cash interest paid | (89 | ) | (95 | ) | (237 | ) | (254 | ) | |||||||
Changes in prepaid and accrued liabilities for tolling agreements | 33 | 98 | (23 | ) | 24 | ||||||||||
Adjustments to reflect sale-type leases and payments for lease expenses | 2 | 1 | 5 | 4 | |||||||||||
Pro-rata Adjusted EBITDA from unconsolidated affiliates | (28 | ) | (28 | ) | (64 | ) | (69 | ) | |||||||
Distributions from unconsolidated affiliates | 6 | 8 | 17 | 25 | |||||||||||
Changes in working capital and other | 40 | 22 | (59 | ) | (71 | ) | |||||||||
Cash from Operating Activities | 287 | 328 | 496 | 607 | |||||||||||
Changes in working capital and other | (40 | ) | (22 | ) | 59 | 71 | |||||||||
Development Expenses3 | — | — | — | 2 | |||||||||||
Return of investment from unconsolidated affiliates | 4 | 6 | 14 | 12 | |||||||||||
Net contributions (to)/from non-controlling interest4 | (8 | ) | (12 | ) | (28 | ) | (32 | ) | |||||||
Maintenance capital expenditures | (9 | ) | (4 | ) | (22 | ) | (16 | ) | |||||||
Principal amortization of indebtedness5 | (78 | ) | (147 | ) | (230 | ) | (321 | ) | |||||||
Cash Available for Distribution before Adjustments | $ | 156 | $ | 149 | $ | 289 | $ | 323 | |||||||
2022 | — | 5 | — | 5 | |||||||||||
Cash Available for Distribution6 | $ | 156 | $ | 154 | $ | 289 | $ | 328 |
________________________
3 Primarily related to Thermal Development Expenses
4 2023 excludes
5 2023 excludes
6 Excludes income tax payments related to Thermal sale
Appendix Table A-6: Nine Months Ended
The following table summarizes the sources and uses of liquidity in 2023:
Nine Months Ended | ||||
($ in millions) | ||||
Sources: | ||||
Net cash provided by operating activities | 496 | |||
Contributions from (distributions to) noncontrolling interests, net | 294 | |||
Proceeds from issuance of long-term debt | 293 | |||
Acquisition of Drop Down Assets, net of cash acquired | 100 | |||
Return of investment from unconsolidated affiliates | 14 | |||
Uses: | ||||
Payments for long-term debt | (384 | ) | ||
Payments of dividends and distributions | (231 | ) | ||
Increase in note receivable — affiliate | (215 | ) | ||
Capital expenditures | (143 | ) | ||
Other net cash outflows | (64 | ) | ||
Change in total cash, cash equivalents, and restricted cash | $ | 160 |
Appendix Table A-7: Adjusted EBITDA and Cash Available for Distribution Guidance
($ in millions) | 2023 Full Year Guidance | 2024 Full Year Guidance | ||
Net Income | 95 - 120 | 90 | ||
Income Tax Expense | 20 - 25 | 20 | ||
Interest Expense, net | 300 | 330 | ||
Depreciation, Amortization, and ARO Expense | 620 | 680 | ||
Adjustment to reflect CWEN share of Adjusted EBITDA in unconsolidated affiliates | 50 | 50 | ||
Non-Cash Equity Compensation | 5 | 5 | ||
Adjusted EBITDA | 1,090 - 1,120 | 1,175 | ||
Cash interest paid | (300 | ) | (310 | ) |
Changes in prepaid and accrued liabilities for tolling agreements | (32 | ) | (5 | ) |
Adjustments to reflect sale-type leases and payments for lease expenses | 10 | 10 | ||
Pro-rata Adjusted EBITDA from unconsolidated affiliates | (85 | ) | (85 | ) |
Cash distributions from unconsolidated affiliates7 | 45 | 45 | ||
Cash from Operating Activities | 728 - 758 | 830 | ||
Net distributions to non-controlling interest8 | (60 | ) | (100 | ) |
Maintenance capital expenditures | (35 | ) | (40 | ) |
Principal amortization of indebtedness9 | (303 | ) | (295 | ) |
Cash Available for Distribution10 | 330 - 360 | 395 |
Appendix Table A-8: Adjusted EBITDA and Cash Available for Distribution Growth Projects
($ in millions) | Texas Solar Nova 1&2 | ||
Net Income | — | ||
Interest Expense, net | 9 | ||
Depreciation, Amortization, and ARO Expense | 16 | ||
Adjusted EBITDA | 25 | ||
Cash interest paid | (9 | ) | |
Cash from Operating Activities | 16 | ||
Net distributions (to)/from non-controlling interest | (5 | ) | |
Principal amortization of indebtedness | (7 | ) | |
Estimated Cash Available for Distribution | 4 |
________________________
7 Distribution from unconsolidated affiliates can be classified as Return of Investment on Unconsolidated Affiliates when actuals are reported. This is below cash from operating activities
8 Includes tax equity proceeds and distributions to tax equity partners
9 2023 excludes balloon maturity payments; 2024 maturities assumed to be refinanced
10 Excludes income tax payments related to Thermal sale
Non-GAAP Financial Information
EBITDA and Adjusted EBITDA
EBITDA, Adjusted EBITDA, and Cash Available for Distribution (CAFD) are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. The presentation of non-GAAP financial measures should not be construed as an inference that Clearway Energy’s future results will be unaffected by unusual or non-recurring items.
EBITDA represents net income before interest (including loss on debt extinguishment), taxes, depreciation and amortization. EBITDA is presented because
- EBITDA does not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments;
- EBITDA does not reflect changes in, or cash requirements for, working capital needs;
- EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments;
- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and
- Other companies in this industry may calculate EBITDA differently than
Clearway Energy does, limiting its usefulness as a comparative measure.
Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to use to invest in the growth of Clearway Energy’s business.
Adjusted EBITDA is presented as a further supplemental measure of operating performance. Adjusted EBITDA represents EBITDA adjusted for mark-to-market gains or losses, non-cash equity compensation expense, asset write offs and impairments; and factors which we do not consider indicative of future operating performance such as transition and integration related costs. The reader is encouraged to evaluate each adjustment and the reasons
Management believes Adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. This measure is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.
Additionally, Management believes that investors commonly adjust EBITDA information to eliminate the effect of restructuring and other expenses, which vary widely from company to company and impair comparability. As we define it, Adjusted EBITDA represents EBITDA adjusted for the effects of impairment losses, gains or losses on sales, non-cash equity compensation expense, dispositions or retirements of assets, any mark-to-market gains or losses from accounting for derivatives, adjustments to exclude gains or losses on the repurchase, modification or extinguishment of debt, and any extraordinary, unusual or non-recurring items plus adjustments to reflect the Adjusted EBITDA from our unconsolidated investments. We adjust for these items in our Adjusted EBITDA as our management believes that these items would distort their ability to efficiently view and assess our core operating trends.
In summary, our management uses Adjusted EBITDA as a measure of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations, and in communications with our Board of Directors, shareholders, creditors, analysts and investors concerning our financial performance.
Cash Available for Distribution
A non-GAAP measure, Cash Available for Distribution is defined as of
We believe CAFD is useful to investors in evaluating our operating performance because securities analysts and other interested parties use such calculations as a measure of our ability to make quarterly distributions. In addition, CAFD is used by our management team for determining future acquisitions and managing our growth. The GAAP measure most directly comparable to CAFD is cash provided by operating activities.
However, CAFD has limitations as an analytical tool because it does not include changes in operating assets and liabilities and excludes the effect of certain other cash flow items, all of which could have a material effect on our financial condition and results from operations. CAFD is a non-GAAP measure and should not be considered an alternative to cash provided by operating activities or any other performance or liquidity measure determined in accordance with GAAP, nor is it indicative of funds available to fund our cash needs. In addition, our calculations of CAFD are not necessarily comparable to CAFD as calculated by other companies. Investors should not rely on these measures as a substitute for any GAAP measure, including cash provided by operating activities.
Source:
2023 GlobeNewswire, Inc., source