Financial Performance - In 2022, the company reported total operating revenues of $1,190 million, with net income of $1,060 million, which includes a $1.29 million gain from the sale of the Thermal Business to KKR[22]. - The aggregate market value of the common stock held by non-affiliates was approximately $2.94 billion based on closing sale prices on the New York Stock Exchange[53]. - As of December 31, 2022, the company had approximately $6,870 million of total consolidated indebtedness, with $4,745 million incurred by non-guarantor subsidiaries[87]. - The Company’s cash available for distribution (CAFD) will fluctuate based on various factors, including capital expenditures, operating expenses, and seasonal variations[195]. - Clearway Energy LLC's CAFD may lead to reduced cash distributions to members in certain quarters due to seasonality, affecting the Company's ability to maintain its quarterly dividend[197]. - The Company is a holding company, dependent on distributions from Clearway Energy LLC to cover dividends and expenses[198]. Asset Management - The company has over 5,500 net MW of installed wind and solar generation projects and approximately 2,500 net MW of natural gas-fired generation facilities, totaling over 8,000 net MW of assets[6]. - The company is committed to acquiring contracted operating assets to enhance its portfolio, with several solar/storage projects in California totaling 945 MW currently committed[13]. - The company benefits from a portfolio of relatively younger assets with low operating and maintenance costs, expecting high fleet availability[19]. - The company's generation offtake agreements have a weighted-average Moody's rating of Ba1 based on rated capacity under contract, indicating a stable credit profile[16]. - The Company owns 57.88% of the economic interests of Clearway Energy LLC, which consolidates its financial results[50]. Strategic Focus - The company aims to grow its dividend over time by maintaining a disciplined financial analysis and a balanced capital structure, focusing on distributing a significant portion of CAFD each quarter[14]. - The company intends to focus its investments primarily in North America to leverage regional knowledge and minimize currency and sovereign risk[13]. - The Company’s business strategy includes growth through acquisitions of additional generation assets, but competition for these opportunities may increase costs and limit acquisition potential[81]. - The Company believes that existing policy incentives for renewable energy projects will create incremental demand in the future[48]. - The Company is committed to engaging with stakeholders on environmental, social, and governance (ESG) matters, providing credible data to ESG agencies[72]. Regulatory Environment - The Company is subject to a wide range of environmental laws and is obligated to comply with all applicable regulations, which have historically become more stringent over time[35]. - Proposed legislation and regulations under review in 2023 could negatively impact the Company's financial performance if they restrict operations[36]. - The Company’s business is subject to numerous risks, including environmental regulations and potential changes in laws that could adversely affect its operations[105]. - The Company must comply with extensive federal, state, and local regulations, which may incur significant costs and risks of penalties for non-compliance[187]. - Changes in the regulatory environment for electric generation could adversely affect the profitability of the Company's generation facilities and overall business prospects[189]. Competition and Market Risks - The company faces competition from various industry participants, including utilities and independent power producers, which may affect its project acquisition and operational strategies[15]. - The Company’s electric generation assets face intense competition, which has contributed to a reduction in electricity prices in certain markets characterized by excess supply[114]. - The Company may face significant risks and hazards in operating electric generation facilities, which could lead to substantial liabilities[94]. - The Company may face risks related to the inability to enter into new or replacement offtake agreements, which could adversely affect its business and financial condition[85]. - The Company relies on a limited number of suppliers for fuel and services, which exposes it to market price volatility and potential disruptions in operations[127]. Employee and Governance - As of December 31, 2022, the Company had 58 employees and relies on personnel from CEG for asset management, administration, and O&M services[42]. - The Company focuses on attracting and retaining talented employees, conducting regular assessments of compensation and benefits to ensure competitive pay levels[45]. - The Company is committed to diversity and inclusion, providing unconscious bias training to its employees[46]. - The Company is committed to diversity, equity, and inclusion through its Equity, Partnership & Inclusion Council, focusing on education, recruitment strategies, and community partnerships[58][59]. - The Company is controlled by CEG, which holds 54.91% of the voting power, potentially limiting other shareholders' influence on corporate decisions[145]. Financial Risks - The Company’s financial condition may be adversely affected by its indebtedness and reliance on key personnel[64]. - The Company’s substantial debt could limit its ability to return capital to stockholders and may result in increased interest expenses[88]. - The Company’s ability to arrange financing is influenced by various factors, including economic conditions and investor confidence[90]. - Disruptions in accessing capital markets or increases in interest rates could limit the Company's ability to acquire projects and finance growth[202]. - The Company may not be successful in obtaining additional capital or refinancing existing arrangements, which could have a material adverse effect on its business and financial condition[121]. Environmental and Climate Risks - The Company is subject to risks from climate change, which may lead to increased operating costs and affect consumer demand for electricity[134]. - The Company faces risks from climate change regulations that may limit access to natural gas and decrease demand for energy generated by conventional assets, potentially impacting financial results[167]. - The Company’s operations are affected by environmental regulations, which could impose additional costs and operational constraints[152]. - The Company’s generation facilities are located in areas prone to natural disasters, which could disrupt operations and lead to significant costs[137]. - The Company’s electricity generation and revenue are highly dependent on favorable solar and wind conditions, which are beyond its control[92].
Clearway Energy(CWEN_A) - 2022 Q4 - Annual Report