Clearway Energy(CWEN) - 2024 Q1 - Quarterly Report

PART I — FINANCIAL INFORMATION Financial Statements and Notes Clearway Energy reported Q1 2024 operating revenues of $263 million and a net loss of $46 million, with total assets at $14.86 billion, reflecting acquisitions and renewable investments Consolidated Financial Statements Q1 2024 consolidated financial statements show a net loss of $46 million on $263 million revenue, with total assets at $14.86 billion and $81 million cash from operations Consolidated Statement of Operations Highlights (Q1 2024 vs Q1 2023) | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total operating revenues | $263 | $288 | ($25) | | Operating (Loss) Income | ($29) | $42 | ($71) | | Net Loss | ($46) | ($40) | ($6) | | Net Loss Attributable to Clearway Energy, Inc. | ($2) | $0 | ($2) | | Loss Per Share (Basic and Diluted) | ($0.02) | $0.00 | ($0.02) | Consolidated Balance Sheet Highlights (as of Mar 31, 2024 vs Dec 31, 2023) | Metric | March 31, 2024 (in millions) | Dec 31, 2023 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $478 | $535 | | Total current assets | $1,497 | $1,560 | | Total Assets | $14,862 | $14,701 | | Total current liabilities | $874 | $906 | | Long-term debt | $7,579 | $7,479 | | Total Liabilities | $9,815 | $9,706 | | Total Stockholders' Equity | $5,045 | $4,994 | Consolidated Statement of Cash Flows Highlights (Q1 2024 vs Q1 2023) | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $81 | $75 | | Net Cash Used in Investing Activities | ($203) | ($86) | | Net Cash Provided by Financing Activities | $34 | $28 | | Net Decrease in Cash, Cash Equivalents and Restricted Cash | ($88) | $17 | Note 3 — Acquisitions In Q1 2024, the company acquired Texas Solar Nova 2 (200 MW solar) for $112 million, and post-quarter, Cedar Creek (160 MW wind) for $117 million - On March 15, 2024, the Company acquired Texas Solar Nova 2, LLC, a 200 MW solar facility in Texas, for cash consideration of $112 million[54] - On April 16, 2024, subsequent to the quarter's end, the Company acquired Cedar Creek Holdco LLC, a 160 MW wind facility in Idaho, for cash consideration of $117 million[53] Note 7 — Long-term Debt As of March 31, 2024, total debt was $8.2 billion, primarily Senior Notes and non-recourse facility-level debt, with no revolving credit facility borrowings Total Debt Composition (as of March 31, 2024) | Debt Category | Amount (in millions) | | :--- | :--- | | Senior Notes (2028, 2031, 2032) | $2,125 | | Non-recourse facility-level debt | $6,076 | | Total debt | $8,201 | - As of March 31, 2024, the company had no outstanding borrowings under its revolving credit facility and $228 million in letters of credit outstanding[85] - In connection with the Texas Solar Nova 2 acquisition on March 15, 2024, the company assumed an $80 million term loan and a $115 million tax equity bridge loan, which was subsequently repaid[87][88] Note 9 — Segment Reporting In Q1 2024, Conventional Generation reported $21 million operating income, while Renewables had a $39 million operating loss on $168 million revenue Segment Performance (Q1 2024) | Segment | Operating Revenues (in millions) | Operating Income (Loss) (in millions) | | :--- | :--- | :--- | | Conventional Generation | $95 | $21 | | Renewables | $168 | ($39) | | Corporate | $0 | ($11) | | Total | $263 | ($29) | Management's Discussion and Analysis (MD&A) MD&A attributes the $25 million revenue decrease to lower capacity prices and hedge adjustments, widening net loss, while maintaining $1.44 billion liquidity and pursuing renewable growth - The company's portfolio consists of approximately 8,700 net MW of assets, including 6,200 net MW of installed wind, solar, and BESS facilities with a weighted average remaining contract duration of approximately 10 years[103] - Key recent events include the acquisition of Texas Solar Nova 2 (200 MW solar) and Cedar Creek (160 MW wind), and new Resource Adequacy (RA) agreements for the Walnut Creek and Marsh Landing facilities[107][108] Consolidated Results of Operations Q1 2024 operating revenues decreased by $25 million to $263 million, driven by lower conventional capacity prices and negative hedge impacts, partially offset by new renewable assets - The Conventional segment revenue decreased primarily due to lower capacity prices from PPA expirations at the Walnut Creek, Marsh Landing, and El Segundo facilities, resulting in a $43 million decline[115] - The Renewables segment revenue increased by $16 million, driven by new solar and BESS acquisitions including Daggett 2 & 3, Arica, and Texas Solar Nova 1[115] - Mark-to-market on economic hedges had a significant negative impact, decreasing revenue by $54 million due to rising forward power prices in ERCOT and PJM markets[115] - Depreciation, amortization, and accretion increased by $26 million, mainly in the Renewables segment, due to newly operational facilities like Daggett 2 & 3 and the acquisition of Texas Solar Nova 1[117] Liquidity and Capital Resources As of March 31, 2024, total liquidity was $1.44 billion, with Q1 capital expenditures of $98 million primarily for renewable growth and continued dividend payments Liquidity Position | Component | March 31, 2024 (in millions) | Dec 31, 2023 (in millions) | | :--- | :--- | :--- | | Total cash, cash equivalents and restricted cash | $963 | $1,051 | | Revolving credit facility availability | $472 | $454 | | Total liquidity | $1,435 | $1,505 | - Capital expenditures for Q1 2024 were approximately $98 million, including $96 million for growth in the Renewables segment, primarily for the Victory Pass, Arica, and Daggett facilities[132] - A quarterly dividend of $0.4102 per share was declared on May 9, 2024, an increase from the $0.4033 per share paid in the first quarter[142] Quantitative and Qualitative Disclosures About Market Risk The company manages commodity price, interest rate, liquidity, and credit risks using derivatives, with sensitivity analysis showing impacts on interest expense and power derivative values - A 1% (100 basis points) change in interest rates would result in an approximately $5 million change in market interest expense on a rolling twelve-month basis[169] - A $0.50 per MWh increase or decrease in power prices would cause a change of approximately $6 million to the net value of the company's long-term power commodity derivative contracts[165] - The fair value of the company's debt was $7.63 billion as of March 31, 2024, compared to a carrying value of $8.20 billion[170] Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of the end of the period covered by the report[173] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[174] PART II — OTHER INFORMATION Other Information Summary Part II reports no legal proceedings, unregistered equity sales, or defaults on senior securities, with no material changes to previously disclosed risk factors - The company reports no legal proceedings for the period[177] - There have been no material changes in the Company's risk factors since those reported in its 2023 Form 10-K[178] - The company reports no unregistered sales of equity securities, use of proceeds, or defaults upon senior securities[179][180]