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Clearway Energy, Inc. Reports First Quarter 2024 Financial Results
ソース: Nasdaq GlobeNewswire / 09 5 2024 05:15:03 America/Chicago
- Signed agreements with Clearway Group to commit to invest in 55 MW of wind and 257 MW of solar plus storage projects
- Entered into new Resource Adequacy Contracts for Marsh Landing and Walnut Creek
- Reaffirming 2024 financial guidance
- Increasing the quarterly dividend by 1.7% to $0.4102 per share in the second quarter of 2024, or $1.64 per share annualized
- Continue to target annual dividend per share growth in the upper range of 5% to 8% through 2026
PRINCETON, N.J., May 09, 2024 (GLOBE NEWSWIRE) -- Clearway Energy, Inc. (NYSE: CWEN, CWEN.A) today reported first quarter 2024 financial results, including Net Loss of $(46) million, Adjusted EBITDA of $211 million, Cash from Operating Activities of $81 million, and Cash Available for Distribution (CAFD) of $52 million.
"Clearway remains well positioned to achieve its 2024 financial objectives. We reported solid first quarter results highlighting the benefits of our fleet's geographic and technological diversification,” said Craig Cornelius, Clearway Energy, Inc.’s incoming President and Chief Executive Officer. “Furthermore, we have made additional progress on the execution toward our long-term objectives with the commitments to invest in Dan's Mountain and Rosamond South and new resource adequacy contracts for our Conventional fleet. CWEN continues to expect to achieve the upper range of its 5% to 8% annual dividend growth objective without needing external capital through at least 2026. In 2027 we continue to see the potential for CAFD per share growth to be in that same range if the balance of our gas fleet contracts its capacity to deliver resource adequacy at the same or better pricing as recently disclosed contract awards.”
Adjusted EBITDA and Cash Available for Distribution used in this press release are non-GAAP measures and are explained in greater detail under “Non-GAAP Financial Information” below.
Overview of Financial and Operating Results
Segment Results
Table 1: Net Income/(Loss)
($ millions) Three Months Ended Segment 3/31/24 3/31/23 Conventional 16 24 Renewables (44 ) (48 ) Corporate (18 ) (16 ) Net Income/(Loss) $ (46 ) $ (40 ) Table 2: Adjusted EBITDA
($ millions) Three Months Ended Segment 3/31/24 3/31/23 Conventional 51 76 Renewables 169 151 Corporate (9 ) (9 ) Adjusted EBITDA $ 211 $ 218 Table 3: Cash from Operating Activities and Cash Available for Distribution (CAFD)
Three Months Ended ($ millions) 3/31/24 3/31/23 Cash from Operating Activities $ 81 $ 75 Cash Available for Distribution (CAFD) $ 52 $ (4 ) For the first quarter of 2024, the Company reported Net Loss of $(46) million, Adjusted EBITDA of $211 million, Cash from Operating Activities of $81 million, and CAFD of $52 million. Net Loss increased versus 2023 primarily due to higher depreciation expense from growth projects achieving commercial operations. Adjusted EBITDA results in the first quarter of 2024 were lower than 2023 primarily due to the expiration of certain tolling agreements in the Conventional fleet, partially offset by the contribution from growth investments. Cash from Operating Activities increased versus 2023 primarily due to higher distributions from unconsolidated affiliates and lower interest payments related to the Conventional fleet. CAFD results in the first quarter of 2024 were higher than 2023 primarily due to lower debt service in the Conventional fleet coinciding with the expiration of the tolling agreements as well as higher wind generation for certain facilities during the first quarter.
Operational Performance
Table 4: Selected Operating Results1
(MWh in thousands) Three Months Ended 3/31/24 3/31/23 Conventional Equivalent Availability Factor 86.3 % 74.4 % Solar MWh generated/sold 1,443 866 Wind MWh generated/sold 2,519 2,744 Renewables generated/sold 3,962 3,610 In the first quarter of 2024, availability at the Conventional segment was higher than the first quarter of 2023 primarily due to the timing and duration of maintenance outages in the segment in 2023. Generation in the Renewables segment during the first quarter of 2024 was 10% higher than the first quarter of 2023 primarily due to the contribution of growth investments.
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1 Excludes equity method investments
2 Generation sold excludes MWh that are reimbursable for economic curtailmentLiquidity and Capital Resources
Table 5: Liquidity
($ millions) 3/31/2024 12/31/2023 Cash and Cash Equivalents: Clearway Energy, Inc. and Clearway Energy LLC, excluding subsidiaries $ 337 $ 410 Subsidiaries 141 125 Restricted Cash: Operating accounts 173 176 Reserves, including debt service, distributions, performance obligations and other reserves 312 340 Total Cash $ 963 $ 1,051 Revolving credit facility availability 472 454 Total Liquidity $ 1,435 $ 1,505 Total liquidity as of March 31, 2024, was $1,435 million, which was $70 million lower than as of December 31, 2023, primarily due to the repayment of debt and execution of growth investments.
As of March 31, 2024, the Company's liquidity included $485 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 March 31, 2024, these restricted funds were comprised of $173 million designated to fund operating expenses, approximately $187 million designated for current debt service payments, and $87 million of reserves for debt service, performance obligations and other items including capital expenditures. The remaining $38 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
Cedar Creek Wind
On April 16, 2024, the Company, through an indirect subsidiary, acquired the Cedar Creek wind project, a 160 MW project located in Bingham County, Idaho, for $117 million in cash. The project achieved commercial operations in the second quarter of 2024 and sells its power under a 25-year PPA with an investment grade utility. The Company expects the project to contribute asset CAFD on a five-year average annual basis of approximately $13 million beginning January 1, 2025.
Dan's Mountain Wind
On May 3, 2024, the Company, through an indirect subsidiary, committed to acquire 50% cash equity interest in the Dan's Mountain wind project, a 55 MW project located in Allegany County, Maryland, for $44 million in cash, subject to closing adjustments. The project is expected to achieve commercial operations in the first half of 2025 and sell its power primarily under a 12-year PPA with an investment grade offtaker. The Company expects the project to contribute asset CAFD on a five-year average annual basis of approximately $4 million beginning January 1, 2026.
Rosamond South I
On May 7, 2024, the Company, through an indirect subsidiary, committed to acquire 50% cash equity interest in the Rosamond South I solar plus storage project, a 257 MW project located in Rosamond, California, for approximately $21 million in cash, subject to closing adjustments. The project is expected to achieve commercial operations in the first half of 2025 and sell its power, RECs, and capacity under agreements with creditworthy counterparties with a weighted average contract duration of approximately 15 years. The Company expects the project to contribute asset CAFD on a five-year average annual basis of approximately $2 million beginning January 1, 2026.
Strategic Announcements
Resource Adequacy Agreement at Walnut Creek
On May 6, 2024, the Company contracted with a load serving entity to sell approximately 97 MW of Resource Adequacy commencing January 2027 and ending December 2027. With this transaction, approximately 20% of Walnut Creek's net qualifying capacity is contracted through 2027 at terms providing for higher project level CAFD in 2027 relative to current run-rate expectations.
Resource Adequacy Agreement at Marsh Landing
On March 28, 2024, the Company contracted with a load serving entity to sell approximately 90 MW of Resource Adequacy commencing September 2026 and ending December 2030. With this transaction, approximately 74% of Marsh Landing's net qualifying capacity is contracted through 2027 at terms providing for higher project level CAFD in 2027 relative to current run-rate expectations.
Quarterly Dividend
On May 9, 2024, Clearway Energy, Inc.’s Board of Directors declared a quarterly dividend on Class A and Class C common stock of $0.4102 per share payable on June 17, 2024, to stockholders of record as of June 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.
Earnings Conference Call
On May 9, 2024, Clearway Energy, Inc. will host a conference call at 8:00 a.m. Eastern to discuss these results. Investors, the news media and others may access the live webcast of the conference call and accompanying presentation materials by logging on to Clearway Energy, Inc.’s website at http://www.clearwayenergy.com and clicking on “Presentations & Webcasts” under “Investor Relations.”
About Clearway Energy, Inc.
Clearway Energy, Inc. is one of the largest renewable energy owners in the US with approximately 6,200 net MW of installed wind, solar, and battery energy storage systems. The Company's approximately 8,700 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.
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, 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 Global Infrastructure Partners, TotalEnergies, and Clearway Energy Group, as well as the Company's Net Income, Adjusted EBITDA, Cash from Operating Activities, Cash Available for Distribution, the Company’s future revenues, income, indebtedness, capital structure, strategy, plans, expectations, objectives, projected financial performance and/or business results and other future events, and views of economic and market conditions.
Although Clearway Energy, Inc. believes that the expectations are reasonable, it can give no assurance that these expectations will prove to be correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated above include, among others, the Company's ability to maintain and grow its quarterly dividend, impacts related to COVID-19 (including any variant of the virus) or any other pandemic, risks relating to the Company's relationships with its sponsors, the failure to identify, execute or successfully implement acquisitions or dispositions (including receipt of third party consents and regulatory approvals), the Company's ability to acquire assets from its sponsors, the Company’s ability to borrow additional funds and access capital markets due to its indebtedness, corporate structure, market conditions or otherwise, hazards customary in the power industry, weather conditions, including wind and solar performance, 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 new contracts as existing contracts expire, changes in government regulations, operating and financial restrictions placed on the Company that are contained in the project-level debt facilities and other agreements of the Company and its subsidiaries, and cyber terrorism and inadequate cybersecurity. Furthermore, any dividends are subject to available capital, market conditions, and compliance with associated laws and regulations.
Clearway Energy, Inc. undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Cash Available for Distribution are estimates as of today’s date, May 9, 2024, and are based on assumptions believed to be reasonable as of this date. Clearway Energy, Inc. expressly disclaims any current intention to update such guidance. The foregoing review of factors that could cause Clearway Energy, Inc.’s actual results to differ materially from those contemplated in the forward-looking statements included in this news release should be considered in connection with information regarding risks and uncertainties that may affect Clearway Energy, Inc.’s future results included in Clearway Energy, Inc.’s filings with the Securities and Exchange Commission at www.sec.gov. In addition, Clearway Energy, Inc. makes available free of charge at www.clearwayenergy.com, copies of materials it files with, or furnishes to, the Securities and Exchange Commission.
Contacts:
Investors: Media: Akil Marsh Zadie Oleksiw investor.relations@clearwayenergy.com media@clearwayenergy.com 609-608-1500 202-836-5754 CLEARWAY ENERGY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended March 31, (In millions, except per share amounts) 2024 2023 Operating Revenues Total operating revenues $ 263 $ 288 Operating Costs and Expenses Cost of operations, exclusive of depreciation, amortization and accretion shown separately below 126 108 Depreciation, amortization and accretion 154 128 General and administrative 11 10 Transaction and integration costs 1 — Total operating costs and expenses 292 246 Operating (Loss) Income (29 ) 42 Other Income (Expense) Equity in earnings (losses) of unconsolidated affiliates 12 (3 ) Other income, net 16 8 Loss on debt extinguishment (1 ) — Interest expense (57 ) (99 ) Total other expense, net (30 ) (94 ) Loss Before Income Taxes (59 ) (52 ) Income tax benefit (13 ) (12 ) Net Loss (46 ) (40 ) Less: Net loss attributable to noncontrolling interests and redeemable noncontrolling interests (44 ) (40 ) Net Loss Attributable to Clearway Energy, Inc. $ (2 ) $ — Loss 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 Weighted average number of Class C common shares outstanding - basic and diluted 82 82 Loss Per Weighted Average Class A and Class C Common Share - Basic and Diluted $ (0.02 ) $ — Dividends Per Class A Common Share $ 0.4033 $ 0.3745 Dividends Per Class C Common Share $ 0.4033 $ 0.3745 CLEARWAY ENERGY, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) Three months ended March 31, (In millions) 2024 2023 Net Loss $ (46 ) $ (40 ) Other Comprehensive Loss Unrealized loss on derivatives and changes in accumulated OCI, net of income tax benefit, of $—, and $1 (1 ) (3 ) Other comprehensive loss (1 ) (3 ) Comprehensive Loss (47 ) (43 ) Less: Comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interests (43 ) (42 ) Comprehensive Loss Attributable to Clearway Energy, Inc. $ (4 ) $ (1 ) CLEARWAY ENERGY, INC. CONSOLIDATED BALANCE SHEETS (In millions, except shares) March 31, 2024 December 31, 2023 ASSETS (Unaudited) Current Assets Cash and cash equivalents $ 478 $ 535 Restricted cash 485 516 Accounts receivable — trade 184 171 Inventory 58 55 Derivative instruments 54 41 Note receivable — affiliate 178 174 Prepayments and other current assets 60 68 Total current assets 1,497 1,560 Property, plant and equipment, net 9,746 9,526 Other Assets Equity investments in affiliates 349 360 Intangible assets for power purchase agreements, net 2,259 2,303 Other intangible assets, net 72 71 Derivative instruments 111 82 Right-of-use assets, net 615 597 Other non-current assets 213 202 Total other assets 3,619 3,615 Total Assets $ 14,862 $ 14,701 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Current portion of long-term debt $ 565 $ 558 Accounts payable — trade 123 130 Accounts payable — affiliates 28 31 Derivative instruments 52 51 Accrued interest expense 42 57 Accrued expenses and other current liabilities 64 79 Total current liabilities 874 906 Other Liabilities Long-term debt 7,579 7,479 Deferred income taxes 111 127 Derivative instruments 309 281 Long-term lease liabilities 642 627 Other non-current liabilities 300 286 Total other liabilities 8,941 8,800 Total Liabilities 9,815 9,706 Redeemable noncontrolling interest in subsidiaries 2 1 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); 202,080,794 shares issued and outstanding (Class A 34,613,853, Class B 42,738,750, Class C 82,391,441, Class D 42,336,750) at March 31, 2024 and 202,080,794 shares issued and outstanding (Class A 34,613,853, Class B 42,738,750, Class C 82,391,441, Class D 42,336,750) at December 31, 2023 1 1 Additional paid-in capital 1,741 1,732 Retained earnings 311 361 Accumulated other comprehensive income 5 7 Noncontrolling interest 2,987 2,893 Total Stockholders’ Equity 5,045 4,994 Total Liabilities and Stockholders’ Equity $ 14,862 $ 14,701 CLEARWAY ENERGY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three months ended March 31, (In millions) 2024 2023 Cash Flows from Operating Activities Net Loss $ (46 ) $ (40 ) Adjustments to reconcile net loss to net cash provided by operating activities: Equity in (earnings) losses of unconsolidated affiliates (12 ) 3 Distributions from unconsolidated affiliates 9 6 Depreciation, amortization and accretion 154 128 Amortization of financing costs and debt discounts 4 3 Amortization of intangibles 46 47 Loss on debt extinguishment 1 — Reduction in carrying amount of right-of-use assets 4 4 Changes in deferred income taxes (10 ) (11 ) Changes in derivative instruments and amortization of accumulated OCI 2 3 Cash used in changes in other working capital: Changes in prepaid and accrued liabilities for tolling agreements (10 ) (39 ) Changes in other working capital (61 ) (29 ) Net Cash Provided by Operating Activities 81 75 Cash Flows from Investing Activities Acquisition of Drop Down Assets, net of cash acquired (111 ) (7 ) Capital expenditures (98 ) (88 ) Return of investment from unconsolidated affiliates 4 9 Other 2 — Net Cash Used in Investing Activities (203 ) (86 ) Cash Flows from Financing Activities Contributions from noncontrolling interests, net of distributions 207 273 Payments of dividends and distributions (81 ) (76 ) Proceeds from the issuance of long-term debt 74 42 Payments of debt issuance costs — (7 ) Payments for long-term debt (166 ) (204 ) Net Cash Provided by Financing Activities 34 28 Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash (88 ) 17 Cash, Cash Equivalents and Restricted Cash at Beginning of Period 1,051 996 Cash, Cash Equivalents and Restricted Cash at End of Period $ 963 $ 1,013 CLEARWAY ENERGY, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (In millions) Preferred
StockCommon
StockAdditional
Paid-In
CapitalRetained
EarningsAccumulated
Other
Comprehensive
IncomeNoncontrolling
InterestTotal
Stockholders’
EquityBalances at December 31, 2023 $ — $ 1 $ 1,732 $ 361 $ 7 $ 2,893 $ 4,994 Net loss — — — (2 ) — (45 ) (47 ) Unrealized (loss) gain on derivatives and changes in accumulated OCI, net of tax — — — — (2 ) 1 (1 ) Distributions to CEG, net of contributions, cash — — — — — (1 ) (1 ) Contributions from noncontrolling interests, net of distributions, cash — — — — — 215 215 Transfers of assets under common control — — 2 — — (42 ) (40 ) Non-cash adjustments for change in tax basis — — 6 — — — 6 Stock-based compensation — — 1 — — — 1 Common stock dividends and distributions to CEG unit holders — — — (47 ) — (34 ) (81 ) Other — — — (1 ) — — (1 ) Balances at March 31, 2024 $ — $ 1 $ 1,741 $ 311 $ 5 $ 2,987 $ 5,045 (In millions) Preferred
StockCommon
StockAdditional
Paid-In
CapitalRetained
EarningsAccumulated
Other
Comprehensive
IncomeNoncontrolling
InterestTotal
Stockholders’
EquityBalances 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 Appendix Table A-1: Three Months Ended March 31, 2024, Segment Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):($ in millions) Conventional Renewables Corporate Total Net Income (Loss) $ 16 $ (44 ) $ (18 ) $ (46 ) Plus: Income Tax Benefit — — (13 ) (13 ) Interest Expense, net 6 14 20 40 Depreciation, Amortization, and ARO 32 122 — 154 Contract Amortization 5 41 — 46 Loss on Debt Extinguishment — 1 — 1 Mark to Market (MtM) Losses/(Gains) on economic hedges (11 ) 35 — 24 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 1 — 4 Non-Cash Equity Compensation — — 1 1 Adjusted EBITDA $ 51 $ 169 $ (9 ) $ 211 Appendix Table A-2: Three Months Ended March 31, 2023, Segment Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):($ in millions) Conventional Renewables Corporate Total Net Income (Loss) $ 24 $ (48 ) $ (16 ) $ (40 ) Plus: Income Tax Benefit — — (12 ) (12 ) Interest Expense, net 10 62 18 90 Depreciation, Amortization, and ARO 33 95 — 128 Contract Amortization 6 41 — 47 Mark to Market (MtM) Gains on economic hedges — (19 ) — (19 ) Other non-recurring — 4 — 4 Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates 3 16 — 19 Non-Cash Equity Compensation — — 1 1 Adjusted EBITDA $ 76 $ 151 $ (9 ) $ 218 Appendix Table A-3: 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 ($ in millions) 3/31/24 3/31/23 Adjusted EBITDA $ 211 $ 218 Cash interest paid (90 ) (93 ) Changes in prepaid and accrued liabilities for tolling agreements (10 ) (39 ) Adjustments to reflect sale-type leases and payments for lease expenses 3 1 Pro-rata Adjusted EBITDA from unconsolidated affiliates (17 ) (15 ) Distributions from unconsolidated affiliates 9 6 Changes in working capital and other (25 ) (3 ) Cash from Operating Activities 81 75 Changes in working capital and other 25 3 Return of investment from unconsolidated affiliates 4 9 Net distributions (to)/from non-controlling interest3 (5 ) (10 ) Maintenance capital expenditures (2 ) (7 ) Principal amortization of indebtedness4 (51 ) (74 ) Cash Available for Distribution $ 52 $ (4 ) Appendix Table A-4: Three Months Ended March 31, 2024, Sources and Uses of Liquidity
The following table summarizes the sources and uses of liquidity in 2024:Three Months Ended ($ in millions) 3/31/24 Sources: Contributions from noncontrolling interests, net of distributions 207 Net cash provided by operating activities 81 Proceedsfrom the issuance of long-term debt 74 Return of investment from unconsolidated affiliates 4 Other net cash inflows 2 Uses: Payments for long-term debt (166 ) Acquisition of Drop Down Assets, net of cash acquired (111 ) Capital expenditures (98 ) Payments of dividends and distributions (81 ) Change in total cash, cash equivalents, and restricted cash $ (88 ) ____________________________________
3 2024 excludes $224 million of contributions related to Texas Solar Nova 2; 2023 excludes $224 million of contributions related to the funding of Waiawa and Daggett 3
4 2024 excludes $115 for the repayment of bridge loans in connection with Texas Solar Nova 2; 2023 excludes $55 million for the repayment of bridge loans in connection with WaiawaAppendix Table A-5: Adjusted EBITDA and Cash Available for Distribution Guidance
($ in millions) 2024 Full
Year
GuidanceNet Income 90 Income Tax Expense 20 Interest Expense, net 330 Depreciation, Amortization, and ARO Expense 680 Adjustment to reflect CWEN share of Adjusted EBITDA in unconsolidated affiliates 50 Non-Cash Equity Compensation 5 Adjusted EBITDA 1,175 Cash interest paid (310 ) Changes in prepaid and accrued liabilities for tolling agreements (5 ) Adjustments to reflect sale-type leases and payments for lease expenses 10 Pro-rata Adjusted EBITDA from unconsolidated affiliates (85 ) Cash distributions from unconsolidated affiliates5 45 Cash from Operating Activities 830 Net distributions to non-controlling interest6 (100 ) Maintenance capital expenditures (40 ) Principal amortization of indebtedness7 (295 ) Cash Available for Distribution 395 Appendix Table A-6: Adjusted EBITDA and Cash Available for Distribution Growth Projects
($ in millions) Cedar Creek Wind
5 Year Ave. 2025-2029Dan's Mountain Wind
5 Year Ave. 2026-2030Rosamond South I
5 Year Ave. 2026-2030Net Income 3 1 — Interest Expense, net 5 — 12 Depreciation, Amortization, and ARO Expense 8 8 17 Adjusted EBITDA 16 9 29 Cash interest paid (5 ) — (12 ) Cash from Operating Activities 11 9 17 Net distributions (to)/from non-controlling interest 3 (5 ) (6 ) Network Upgrade Reimbursements 2 — — Maintenance capital expenditures — — (1 ) Principal amortization of indebtedness (3 ) — (8 ) Estimated Cash Available for Distribution 13 4 2 ____________________________________
5 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
6 Includes tax equity proceeds and distributions to tax equity partners
7 2024 excludes maturities assumed to be refinancedNon-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 Clearway Energy considers it an important supplemental measure of its performance and believes debt and equity holders frequently use EBITDA to analyze operating performance and debt service capacity. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:
- 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. Clearway Energy compensates for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA only supplementally. See the statements of cash flow included in the financial statements that are a part of this news release.
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 Clearway Energy considers it appropriate for supplemental analysis. As an analytical tool, Adjusted EBITDA is subject to all of the limitations applicable to EBITDA. In addition, in evaluating Adjusted EBITDA, the reader should be aware that in the future Clearway Energy may incur expenses similar to the adjustments in this news release.
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 March 31, 2024 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. Management believes CAFD is a relevant supplemental measure of the Company’s ability to earn and distribute cash returns to investors.
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.
- Signed agreements with Clearway Group to commit to invest in 55 MW of wind and 257 MW of solar plus storage projects