August 6, 2019 - 6:26 AM EDT
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Clearway Energy, Inc. Reports Second Quarter 2019 Financial Results

PRINCETON, N.J.

  • Enhancing long term growth potential with the addition of 354 MW to the ROFO pipeline
  • Announced equity commitments to repower two wind projects totaling 283 MW
  • Advanced committed growth investments for Hawaii Solar Phase I and the DG Investment Partnerships
  • Revising 2019 CAFD guidance due to first half 2019 renewable energy conditions and the CVSR outage
  • Declared quarterly dividend of $0.20 per share in third quarter 2019

Clearway Energy, Inc. (NYSE: CWEN, CWEN.A) today reported second quarter 2019 financial results, including a Net Loss of $36 million, Adjusted EBITDA of $278 million, Cash from Operating Activities of $89 million, and Cash Available for Distribution (CAFD) of $68 million, which includes adjustments to reflect CAFD generated by unconsolidated investments that are unable to distribute project dividends due to the PG&E bankruptcy.

"Despite the Company’s current year financial outlook having been impacted by challenging renewable resource conditions in the first half of the year and the June outage at the CVSR facility, the prospects for long term growth at Clearway Energy remain clear as GIP’s sponsorship continues to provide new accretive investment opportunities,” said Christopher Sotos, Clearway Energy, Inc.’s President and Chief Executive Officer. “With today’s announced expansion of the ROFO pipeline by 354 MW, the recently announced equity commitments to the Repowering Partnership with Clearway Group to repower 283 MW of wind projects, and the ongoing investment in the Company’s existing growth commitments, the Company is able to incrementally grow during the pendency of the PG&E bankruptcy while also positioning itself for long term CAFD per share growth."

Overview of Financial and Operating Results

Segment Results

Table 1: Net (Loss)/Income

($ millions)

 

Three Months Ended

 

Six Months Ended

Segment

 

6/30/19

 

6/30/18

 

6/30/19

 

6/30/18

Conventional

 

32

 

 

41

 

 

56

 

 

68

 

Renewables

 

(20

)

 

84

 

 

(76

)

 

76

 

Thermal

 

(15

)

 

6

 

 

(10

)

 

14

 

Corporate

 

(33

)

 

(35

)

 

(53

)

 

(62

)

Net (Loss)/Income

 

(36

)

 

96

 

 

(83

)

 

96

 

 

Table 2: Adjusted EBITDA

($ millions)

 

Three Months Ended

 

Six Months Ended

Segment

 

6/30/19

 

6/30/18

 

6/30/19

 

6/30/18

Conventional

 

76

 

 

78

 

 

145

 

 

144

 

Renewables

 

191

 

 

217

 

 

302

 

 

329

 

Thermal

 

16

 

 

14

 

 

32

 

 

30

 

Corporate

 

(5

)

 

(5

)

 

(10

)

 

(10

)

Adjusted EBITDA

 

278

 

 

304

 

 

469

 

 

493

 

 

Table 3: Cash from Operating Activities and Cash Available for Distribution (CAFD)

 

 

Three Months Ended

 

Six Months Ended

($ millions)

 

6/30/19

 

6/30/18

 

6/30/19

 

6/30/18

Cash from Operating Activities

 

89

 

 

116

 

 

150

 

 

181

 

Cash Available for Distribution (CAFD)1

 

68

 

 

98

 

 

55

 

 

94

 

 

For the second quarter of 2019, the Company reported a Net Loss of $36 million, Adjusted EBITDA of $278 million, Cash from Operating Activities of $89 million, and CAFD of $68 million, which includes adjustments to reflect CAFD generated by unconsolidated investments that are unable to distribute project dividends due to the PG&E bankruptcy. Net Income was lower than the second quarter of 2018 due to non-cash changes in the fair value of interest rate swaps, a non-cash asset impairment charge in the Thermal segment, weaker renewable energy conditions, and the June outage at the CVSR facility. Adjusted EBITDA results were lower than 2018 primarily due to weaker renewable energy conditions and the CVSR outage, but partially offset by the contribution of growth investments. In the second quarter, CAFD results were lower than 2018 primarily due to lower Adjusted EBITDA and the expiration of network upgrade reimbursements.

Operational Performance

Table 4: Selected Operating Results

(MWh and MWht in thousands)

 

Three Months Ended

 

Six Months Ended

 

 

6/30/19

 

6/30/18

 

6/30/19

 

6/30/18

Equivalent Availability Factor (Conventional)2

 

92.1%

 

97.6%

 

87.5%

 

90.7%

Renewables Generation Sold (MWh)3

 

1,948

 

2,308

 

3,397

 

3,924

Thermal Generation Sold (MWh/MWht)

 

513

 

471

 

1,171

 

1,097

 

In the second quarter of 2019, availability at the Conventional segment was in line with operational targets but lower than second quarter of 2018 due to the timing of spring outages. Generation in the Renewables segment during the quarter was below median expectations and 16% lower than the second quarter of 2018 due to weak solar and wind conditions across the portfolio and the impact from the previously disclosed outage in June at the Company's CVSR facility.

On June 5, 2019 a fire occurred at the CVSR facility impacting approximately 1,200 acres of property. While the fire did not impact solar arrays, damage occurred to associated infrastructure including distribution poles and cabling. The facility was restored to full operations on July 1, 2019. The full year cash impact of the fire is estimated to be approximately $9 million, which assumes insurance recovery for associated repair work by the end of the year.

Liquidity and Capital Resources

Table 5: Liquidity

($ millions)

 

6/30/19

 

3/31/19

 

12/31/18

Cash and Cash Equivalents:

 

 

 

 

 

 

Clearway Energy, Inc. and Clearway Energy LLC, excluding subsidiaries

 

$

7

 

 

$

37

 

 

$

298

 

Subsidiaries

 

86

 

 

80

 

 

109

 

Restricted Cash:

 

 

 

 

 

 

Operating accounts

 

60

 

 

57

 

 

84

 

Reserves, including debt service, distributions, performance obligations and other reserves

 

143

 

 

124

 

 

92

 

Total Cash

 

$

296

 

 

$

298

 

 

$

583

 

Revolving credit facility availability

 

$

450

 

 

$

454

 

 

$

454

 

Total Liquidity

 

$

746

 

 

$

752

 

 

$

1,037

 

 

Total liquidity as of June 30, 2019 was $746 million, $291 million lower than as of December 31, 2018. This reduction was primarily due to the repayment, with cash on hand, of $220 million in outstanding 2019 Convertible Notes, $19 million for the buyout of the Wind TE HoldCo tax equity partnership in January 2019, and $27 million for growth investments, including Duquesne, Mylan, Hawaii Solar Phase I, and ongoing contributions to the DG Investment Partnerships. Borrowing capacity under the revolving credit facility was reduced by $4 million due to the issuance of corporate letters of credit.

The Company's liquidity includes $203 million of restricted cash balances as of June 30, 2019. 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 June 30, 2019, these restricted funds were comprised of $60 million designated to fund operating expenses, approximately $45 million designated for current debt service payments, and $42 million of reserves for debt service, performance obligations and other items including capital expenditures. The remaining $56 million is held in distribution accounts, of which $36 million related to subsidiaries affected by the PG&E bankruptcy.

Potential future sources of liquidity include excess operating cash flow, the existing ATM program, of which $36 million remained available as of August 6, 2019, availability under the revolving credit facility, and, subject to market conditions, new corporate financings.

PG&E Bankruptcy Update

As of August 5, 2019, the Company’s contracts with PG&E have operated in the normal course and the Company currently expects these contracts to continue as such. However, unless such lenders for the related project-level debt otherwise agree, distributions to the Company from these projects may not be made during the pendency of the bankruptcy. These restrictions, therefore, have resulted in the Company accumulating less unrestricted cash and thus decreased the Company’s corporate liquidity and cash available for shareholder dividends and growth investments. The Company has entered into forbearance agreements for certain project-level financing arrangements and continues to seek similar agreements with the lenders for the remaining project-level financing arrangements affected by the PG&E bankruptcy. The Company continues to assess the potential future impacts of the PG&E bankruptcy filing as events occur.

Clearway Group ROFO Pipeline

Additions to the Pipeline

On August 1, 2019, the Company entered into a Second Amendment to the Right of First Offer Agreement with Clearway Group. The following projects were added to the Company's ROFO pipeline:

Asset

 

Project Type

 

Net Capacity
(MW)

 

State

 

Expected
COD

Rattlesnake

 

Utility Wind

 

144

 

WA

 

2020

Black Rock

 

Utility Wind

 

110

 

WV

 

2021

Wildflower

 

Utility Solar

 

100

 

MS

 

2021

Repowering 2.0

 

Repowering

 

TBD

 

TBD

 

TBD

 

Drop Down Offer

On June 18, 2019, Clearway Group offered the Company the opportunity to purchase 100% of CEG's interests in Mesquite Star Pledgor LLC, which owns the Mesquite Star wind project, a 419 MW utility scale wind facility expected to reach COD in 2020. On August 1, 2019, Clearway Group and the Company agreed to extend the negotiation period for the Mesquite Star project. The acquisition is subject to negotiation and approval by the Company's Independent Directors.

Growth Investments

Equity Commitments in Repowering 1.0 Partnership

On June 17, 2019 through an indirect subsidiary, the Company entered into binding equity commitment agreements in the previously announced partnership with Clearway Group to enable the repowering of two of its existing wind assets, Wildorado and Elbow Creek, which total a combined 283 MW. As part of the transaction, a subsidiary of the Company entered into a financing agreement for construction debt of $219 million. The construction financing was in part used to reduce outstanding principal at the existing Viento project financing through the removal of Wildorado from the Viento collateral package. In connection with the completion of this financing, and after taking into account the reduction in debt service in 2019 resulting from the partial repayment of the Viento financing, the Company committed to invest an estimated $111 million4 in net corporate capital to fund the repowering of the wind facilities, subject to closing adjustments. The transaction is expected to contribute incremental asset CAFD on an average annual basis of approximately $12 million beginning in 20205, which reflects the improved operational profile of the projects and the impact from the new tax equity capital structure employed at the partnership.

Hawaii Solar Phase I ROFO Acquisition Update

During the second quarter of 2019, the Company made an incremental corporate capital contribution of $2 million toward the previously disclosed Hawaii Solar Phase I ROFO Acquisition. In aggregate, the Hawaii Solar Phase I ROFO Acquisition totals approximately 80 MW of utility-scale solar projects located in Kawailoa and Oahu, Hawaii and is being purchased from Clearway Group for a total cash consideration of approximately $29 million (of which $23 million remains to be funded as of June 30, 2019) plus the assumption of non-recourse debt of $169 million anticipated at transaction close. The purchase price for the Hawaii Solar Phase I projects will be funded with existing liquidity and the transaction is expected to contribute CAFD on an average annual basis of approximately $2.6 million6 beginning in 2020. The projects are expected to be completed in the fourth quarter of 2019.

DG Investment Partnerships with Clearway Group

During the second quarter of 2019, the Company invested approximately $6 million in the DG investment partnerships with Clearway Group, bringing total capital invested to $252 million7 in these investment partnerships. As of June 30, 2019, through the existing partnership agreements, the Company owns approximately 253 MW8 of distributed and community solar capacity with a weighted average contract life by CAFD of approximately 19 years.

Financing Update

Viento Repayment

On June 14, 2019, and in connection with the Repowering 1.0 Partnership, proceeds from the construction debt were utilized to repay $109 million for the outstanding balance, including accrued interest, under the Viento non-recourse project financing.

South Trent Wind Refinancing

On June 14, 2019, the Company, through South Trent Wind LLC, refinanced $49 million of non-recourse debt due 2020 by issuing $46 million of new non-recourse financing due 2028 at an interest rate of LIBOR plus 1.350%. In conjunction with the

refinancing, the Company invested $3 million of additional cash into the project, net of fees and financing costs.

Quarterly Dividend

On August 1, 2019, Clearway Energy, Inc.’s Board of Directors declared a quarterly dividend on Class A and Class C common stock of $0.20 per share payable on September 17, 2019, to stockholders of record as of September 3, 2019. The Company will continue to assess the level of the dividend pending developments in the PG&E Bankruptcy, including the Company's ability to receive unrestricted project distributions.

Seasonality

Clearway Energy, Inc.’s quarterly operating results are impacted by seasonal factors, as well as variability in renewable energy resources. 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 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
  • Receipt of distributions from or generated by unconsolidated affiliates impacted by the PG&E bankruptcy

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.

2019 Financial Guidance

The Company is reducing its 2019 full year CAFD guidance to $250 million to account for the previously disclosed impact of the CVSR outage in June and year to date renewable resource performance. This financial guidance assumes that all CAFD related to the projects impacted by the PG&E Bankruptcy is realized in 2019 and Mylan and Hawaii Solar Phase I achieve target commercial operational dates. Financial guidance for 2019 also continues to be based on median renewable energy production estimates for the remainder of the year.

Earnings Conference Call

On August 6, 2019, 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 a leading publicly-traded energy infrastructure investor focused on modern, sustainable and long-term contracted assets across North America. Clearway Energy’s environmentally-sound asset portfolio includes over 7,000 megawatts of wind, solar and natural gas-fired power generation facilities, as well as district energy systems. Through this diversified and contracted portfolio, Clearway Energy endeavors to provide its investors with stable and growing dividend income. Clearway Energy’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 Global Infrastructure Partners III (GIP), an independent infrastructure fund manager that invests in infrastructure and businesses in both OECD and select emerging market countries, through GIP’s portfolio company, Clearway Energy Group.

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,” “anticipate,” “forecast,” “plan,” “outlook,” “believe” and similar terms. Such forward-looking statements include, but are not limited to, statements regarding impacts resulting from the PG&E bankruptcy, the benefits of the relationship with Global Infrastructure Partners III (GIP) and GIP’s expertise, the Company’s future relationship and arrangements with GIP 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, impacts relating to the PG&E bankruptcy, general economic conditions, hazards customary in the power industry, weather conditions, including wind and solar performance, competition in wholesale power markets, the volatility of energy and fuel prices, failure of customers to perform under contracts, changes in the wholesale power markets, changes in government regulations, the condition of capital markets generally, the Company's ability to access capital markets, cyber terrorism and inadequate cybersecurity, the ability to engage in successful acquisitions activity, unanticipated outages at its generation facilities, adverse results in current and future litigation, failure to identify, execute or successfully implement acquisitions (including receipt of third party consents and regulatory approvals), the Company's ability to enter into new contracts as existing contracts expire, risk relating to the Company's relationships with GIP and Clearway Energy Group, the Company's ability to successfully transition services previously provided by NRG, the Company's ability to acquire assets from GIP, Clearway Energy Group or third parties, the Company's ability to close drop down transactions, and the Company's ability to maintain and grow its quarterly dividends. 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 Adjusted EBITDA and Cash Available for Distribution are estimates as of today’s date, August 6, 2019, 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 SEC.

 

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

Three months ended June 30,

 

Six months ended June 30,

(In millions, except per share amounts)

2019

 

2018

 

2019

 

2018

Operating Revenues

 

 

 

 

 

 

 

Total operating revenues

$

284

 

 

$

307

 

 

$

501

 

 

$

532

 

Operating Costs and Expenses

 

 

 

 

 

 

 

Cost of operations

79

 

 

74

 

 

163

 

 

163

 

Depreciation and amortization

89

 

 

82

 

 

173

 

 

163

 

Impairment losses

19

 

 

 

 

19

 

 

 

General and administrative

7

 

 

6

 

 

13

 

 

11

 

Transaction and integration costs

1

 

 

1

 

 

2

 

 

2

 

Development costs

2

 

 

 

 

3

 

 

 

Total operating costs and expenses

197

 

 

163

 

 

373

 

 

339

 

Operating Income

87

 

 

144

 

 

128

 

 

193

 

Other Income (Expense)

 

 

 

 

 

 

 

Equity in earnings of unconsolidated affiliates

11

 

 

29

 

 

14

 

 

33

 

Other income, net

1

 

 

1

 

 

4

 

 

2

 

Loss on debt extinguishment

(1

)

 

 

 

(1

)

 

 

Interest expense

(130

)

 

(71

)

 

(231

)

 

(126

)

Total other expense, net

(119

)

 

(41

)

 

(214

)

 

(91

)

(Loss) Income Before Income Taxes

(32

)

 

103

 

 

(86

)

 

102

 

Income tax expense (benefit)

4

 

 

7

 

 

(3

)

 

6

 

Net (Loss) Income

(36

)

 

96

 

 

(83

)

 

96

 

Less: Pre-acquisition net income of Drop Down Assets

 

 

 

 

 

 

4

 

Net Loss (Income) Excluding Pre-acquisition Net Income of Drop Down Assets

(36

)

 

96

 

 

(83

)

 

92

 

Less: (Loss) Income attributable to noncontrolling interests

(12

)

 

17

 

 

(39

)

 

(3

)

Net (Loss) Income Attributable to Clearway Energy, Inc.

$

(24

)

 

$

79

 

 

$

(44

)

 

$

95

 

(Losses) Earnings Per Share Attributable to Clearway Energy, Inc. Class A and Class C Common Stockholders

 

 

 

 

 

 

 

Weighted average number of Class A common shares outstanding - basic

35

 

 

35

 

 

35

 

 

35

 

Weighted average number of Class A common shares outstanding - diluted

35

 

 

49

 

 

35

 

 

49

 

Weighted average number of Class C common shares outstanding - basic

73

 

 

67

 

 

73

 

 

66

 

Weighted average number of Class C common shares outstanding - diluted

73

 

 

78

 

 

73

 

 

77

 

(Losses) Earnings per Weighted Average Class A and Class C Common Share - Basic

$

(0.22

)

 

$

0.77

 

 

$

(0.41

)

 

$

0.94

 

(Losses) Earnings per Weighted Average Class A Common Share - Diluted

(0.22

)

 

0.61

 

 

(0.41

)

 

0.80

 

(Losses) Earnings per Weighted Average Class C Common Share - Diluted

(0.22

)

 

0.7

 

 

(0.41

)

 

0.89

 

Dividends Per Class A Common Share

0.20

 

 

0.31

 

 

0.40

 

 

0.607

 

Dividends Per Class C Common Share

$

0.20

 

 

$

0.31

 

 

$

0.40

 

 

$

0.607

 

 

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

Three months ended June 30,

 

Six months ended June 30,

(In millions)

2019

 

2018

 

2019

 

2018

Net (Loss) Income

$

(36

)

 

$

96

 

 

$

(83

)

 

$

96

 

Other Comprehensive (Loss) Gain

 

 

 

 

 

 

 

Unrealized gain on derivatives, net of income tax benefit of $0, $0, $0 and ($3)

5

 

 

7

 

 

3

 

 

24

 

Other comprehensive gain

5

 

 

7

 

 

3

 

 

24

 

Comprehensive (Loss) Income

(31

)

 

103

 

 

(80

)

 

120

 

Less: Pre-acquisition net income of Drop Down Assets

 

 

 

 

 

 

4

 

Less: Comprehensive (loss) income attributable to noncontrolling interests

(10

)

 

21

 

 

(38

)

 

10

 

Comprehensive (Loss) Income Attributable to Clearway Energy, Inc.

$

(21

)

 

$

82

 

 

$

(42

)

 

$

106

 

 

CLEARWAY ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

 

(In millions, except shares)

June 30, 2019

 

December 31, 2018

ASSETS

(unaudited)

 

 

Current Assets

 

 

 

Cash and cash equivalents

$

93

 

 

$

407

 

Restricted cash

203

 

 

176

 

Accounts receivable — trade

126

 

 

104

 

Accounts receivable — affiliate

1

 

 

 

Inventory

49

 

 

40

 

Prepayments and other current assets

26

 

 

29

 

Total current assets

498

 

 

756

 

Property, plant and equipment, net

5,602

 

 

5,245

 

Other Assets

 

 

 

Equity investments in affiliates

1,165

 

 

1,172

 

Intangible assets, net

1,121

 

 

1,156

 

Derivative instruments

 

 

8

 

Deferred income taxes

62

 

 

57

 

Right of use assets, net

183

 

 

 

Other non-current assets

100

 

 

106

 

Total other assets

2,631

 

 

2,499

 

Total Assets

$

8,731

 

 

$

8,500

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current Liabilities

 

 

 

Current portion of long-term debt

$

1,914

 

 

$

535

 

Accounts payable — trade

62

 

 

45

 

Accounts payable — affiliate

53

 

 

19

 

Derivative instruments

13

 

 

4

 

Accrued interest expense

43

 

 

44

 

Accrued expenses and other current liabilities

42

 

 

57

 

Total current liabilities

2,127

 

 

704

 

Other Liabilities

 

 

 

Long-term debt

4,192

 

 

5,447

 

Derivative instruments

66

 

 

17

 

Long-term lease liabilities

186

 

 

 

Other non-current liabilities

106

 

 

108

 

Total non-current liabilities

4,550

 

 

5,572

 

Total Liabilities

6,677

 

 

6,276

 

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); 193,402,886 shares issued and outstanding (Class A 34,599,645, Class B 42,738,750, Class C 73,325,741, Class D 42,738,750) at June 30, 2019 and 193,251,396 shares issued and outstanding (Class A 34,586,250, Class B 42,738,750, Class C 73,187,646, Class D 42,738,750) at December 31, 2018

1

 

 

1

 

Additional paid-in capital

1,852

 

 

1,897

 

Accumulated deficit

(105

)

 

(58

)

Accumulated other comprehensive loss

(16

)

 

(18

)

Noncontrolling interest

322

 

 

402

 

Total Stockholders' Equity

2,054

 

 

2,224

 

Total Liabilities and Stockholders' Equity

$

8,731

 

 

$

8,500

 

 

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Six months ended June 30,

 

2019

 

2018

 

(In millions)

Cash Flows from Operating Activities

 

 

 

Net (loss) income

$

(83

)

 

$

96

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Equity in earnings of unconsolidated affiliates

(14

)

 

(33

)

Distributions from unconsolidated affiliates

22

 

 

32

 

Depreciation and amortization

173

 

 

163

 

Right of use asset amortization

3

 

 

 

Amortization of financing costs and debt discounts

7

 

 

13

 

Amortization of intangibles and out-of-market contracts

35

 

 

35

 

Adjustment for debt extinguishment

1

 

 

 

Impairment losses

19

 

 

 

Changes in deferred income taxes

(3

)

 

6

 

Changes in derivative instruments

70

 

 

(32

)

Loss (gain) on disposal of asset components

7

 

 

(1

)

Changes in prepaid and accrued liabilities for tolling agreements

(60

)

 

(62

)

Changes in other working capital

(27

)

 

(36

)

Net Cash Provided by Operating Activities

150

 

 

181

 

Cash Flows from Investing Activities

 

 

 

Acquisitions

(100

)

 

(11

)

Partnership interests acquisition

(6

)

 

 

Acquisition of the Drop Down Assets

 

 

(126

)

Buyout of Wind TE Holdco noncontrolling interest

(19

)

 

 

Capital expenditures

(96

)

 

(45

)

Cash receipts from notes receivable

 

 

7

 

Return of investment from unconsolidated affiliates

17

 

 

18

 

Investments in unconsolidated affiliates

(9

)

 

(16

)

Other

2

 

 

7

 

Net Cash Used in Investing Activities

(211

)

 

(166

)

Cash Flows from Financing Activities

 

 

 

Net distributions from noncontrolling interests

(11

)

 

94

 

Proceeds from the issuance of common stock

 

 

75

 

Payments of dividends and distributions

(77

)

 

(113

)

Payments of debt issuance costs

(15

)

 

(5

)

Proceeds from the revolving credit facility

22

 

 

35

 

Payments for the revolving credit facility

(22

)

 

(90

)

Proceeds from the issuance of long-term debt

493

 

 

227

 

Payments for long-term debt

(616

)

 

(285

)

Net Cash Used in Financing Activities

(226

)

 

(62

)

Net Decrease in Cash, Cash Equivalents and Restricted Cash

(287

)

 

(47

)

Cash, Cash Equivalents and Restricted Cash at beginning of period

583

 

 

316

 

Cash, Cash Equivalents and Restricted Cash at end of period

$

296

 

 

$

269

 

 

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Six Months Ended June 30, 2019

(Unaudited)

 

(In millions)

Preferred
Stock

 

Common
Stock

 

Additional
Paid-In
Capital

 

Accumulated
Deficit

 

Accumulated
Other
Comprehensive
Loss

 

Noncontrolling
Interest

 

Total
Stockholders'
Equity

Balances at December 31, 2018

$

 

 

$

1

 

 

$

1,897

 

 

$

(58

)

 

$

(18

)

 

$

402

 

 

$

2,224

 

Net loss

 

 

 

 

 

 

(20

)

 

 

 

(27

)

 

(47

)

Unrealized loss on derivatives, net of tax

 

 

 

 

 

 

 

 

(1

)

 

(1

)

 

(2

)

Buyout of Wind TE Holdco noncontrolling interest

 

 

 

 

(5

)

 

 

 

 

 

(14

)

 

(19

)

Capital contributions from tax equity investors, net of distributions, cash

 

 

 

 

 

 

 

 

 

 

19

 

 

19

 

Contributions from CEG for Oahu Partnership, non-cash

 

 

 

 

 

 

 

 

 

 

12

 

 

12

 

Cumulative effect from change in accounting principle

 

 

 

 

 

 

(2

)

 

 

 

(1

)

 

(3

)

Common stock dividends and distributions

 

 

 

 

(22

)

 

 

 

 

 

(17

)

 

(39

)

Balances at March 31, 2019

$

 

 

$

1

 

 

$

1,870

 

 

$

(80

)

 

$

(19

)

 

$

373

 

 

$

2,145

 

Net loss

 

 

 

 

 

 

(24

)

 

 

 

(12

)

 

(36

)

Unrealized loss on derivatives, net of tax

 

 

 

 

 

 

 

 

3

 

 

2

 

 

5

 

Distributions from non-controlling interests, net of capital contributions, cash

 

 

 

 

 

 

 

 

 

 

(30

)

 

(30

)

Contributions from CEG for Kawailoa, Repowering Partnerships, non-cash

 

 

 

 

 

 

 

 

 

 

6

 

 

6

 

Stock-based compensation

 

 

 

 

1

 

 

(1

)

 

 

 

 

 

 

Non-cash adjustment for change in tax basis of assets

 

 

 

 

2

 

 

 

 

 

 

 

 

2

 

Common stock dividends and distributions

 

 

 

 

(21

)

 

 

 

 

 

(17

)

 

(38

)

Balances at June 30, 2019

 

 

$

1

 

 

$

1,852

 

 

$

(105

)

 

$

(16

)

 

$

322

 

 

$

2,054

 

 

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Six Months Ended June 30, 2018

(Unaudited)

 

(In millions)

Preferred
Stock

 

Common
Stock

 

Additional
Paid-In
Capital

 

Accumulated
Deficit

 

Accumulated
Other
Comprehensive
Loss

 

Noncontrolling
Interest

 

Total
Stockholders'
Equity

Balances at December 31, 2017

$

 

 

$

1

 

 

$

1,843

 

 

$

(69

)

 

$

(28

)

 

$

412

 

 

$

2,159

 

Net income (loss)

 

 

 

 

 

 

16

 

 

 

 

(20

)

 

(4

)

Pre-acquisition net income of Buckthorn Solar Drop Down Asset

 

 

 

 

 

 

 

 

 

 

4

 

 

4

 

Unrealized gain on derivatives, net of tax

 

 

 

 

 

 

 

 

8

 

 

9

 

 

17

 

Payment for the Buckthorn Solar Drop Down Asset

 

 

 

 

 

 

 

 

 

 

(42

)

 

(42

)

Capital contributions from tax equity investors, net of distributions, cash

 

 

 

 

 

 

 

 

 

 

30

 

 

30

 

Distributions and return of capital to NRG, net of contributions, cash

 

 

 

 

 

 

 

 

 

 

4

 

 

4

 

Proceeds from the issuance of Class C common stock

 

 

 

 

10

 

 

 

 

 

 

 

 

10

 

Non-cash adjustment for change in tax basis of property, plant and equipment

 

 

 

 

3

 

 

 

 

 

 

 

 

3

 

Common stock dividends and distributions

 

 

 

 

(29

)

 

 

 

 

 

(26

)

 

(55

)

Balances at March 31, 2018

$

 

 

$

1

 

 

$

1,827

 

 

$

(53

)

 

$

(20

)

 

$

371

 

 

$

2,126

 

Net income (loss)

 

 

 

 

 

 

79

 

 

 

 

17

 

 

96

 

Pre-acquisition net income of Buckthorn Solar Drop Down Asset

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on derivatives, net of tax

 

 

 

 

 

 

 

 

3

 

 

4

 

 

7

 

Capital contributions from tax equity investors, net of distributions, cash

 

 

 

 

 

 

 

 

 

 

79

 

 

79

 

Distributions and return of capital to NRG, net of contributions, cash

 

 

 

 

 

 

 

 

 

 

(15

)

 

(15

)

Distributions and return of capital to NRG, net of contributions, non-cash

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

1

 

 

 

 

 

 

 

 

1

 

Proceeds from the issuance of Class C common stock

 

 

 

 

65

 

 

 

 

 

 

 

 

65

 

Non-cash adjustment for change in tax basis of property, plant and equipment

 

 

 

 

(2

)

 

 

 

 

 

2

 

 

 

Equity component of tendered 2020 Convertible Notes and 2019 Convertible Notes

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock dividends and distributions

 

 

 

 

(32

)

 

 

 

 

 

(26

)

 

(58

)

Balances at June 30, 2018

$

 

 

$

1

 

 

$

1,859

 

 

$

26

 

 

$

(17

)

 

$

419

 

 

$

2,288

 

 

Appendix Table A-1: Three Months Ended June 30, 2019, 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

 

Thermal

 

Corporate

 

Total

Net (Loss) Income

 

$

32

 

 

$

(20

)

 

$

(15

)

 

$

(33

)

 

$

(36

)

Plus:

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

 

 

 

 

 

 

4

 

 

4

 

Interest Expense, net

 

16

 

 

88

 

 

4

 

 

22

 

 

130

 

Depreciation, Amortization, and ARO

 

25

 

 

59

 

 

7

 

 

 

 

91

 

Contract Amortization

 

2

 

 

15

 

 

 

 

 

 

17

 

Impairment Losses

 

 

 

 

 

19

 

 

 

 

19

 

Loss on Debt Extinguishment

 

 

 

1

 

 

 

 

 

 

1

 

Acquisition-related transaction and integration costs

 

 

 

 

 

 

 

1

 

 

1

 

Other non-recurring charges

 

(2

)

 

2

 

 

1

 

 

 

 

1

 

Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates

 

3

 

 

46

 

 

 

 

 

 

49

 

Non-Cash Equity Compensation

 

 

 

 

 

 

 

1

 

 

1

 

Adjusted EBITDA

 

$

76

 

 

$

191

 

 

$

16

 

 

$

(5

)

 

$

278

 

 

Appendix Table A-2: Three Months Ended June 30, 2018, 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

 

Thermal

 

Corporate

 

Total

Net Income (Loss)

 

$

41

 

 

$

84

 

 

$

6

 

 

$

(35

)

 

$

96

 

Plus:

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

 

 

 

 

 

 

7

 

 

7

 

Interest Expense, net

 

12

 

 

34

 

 

2

 

 

21

 

 

69

 

Depreciation, Amortization, and ARO

 

24

 

 

54

 

 

6

 

 

 

 

84

 

Contract Amortization

 

2

 

 

16

 

 

 

 

 

 

18

 

Acquisition-related transaction and integration costs

 

 

 

 

 

 

 

1

 

 

1

 

Other non-recurring charges

 

(4

)

 

 

 

 

 

 

 

(4

)

Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates

 

3

 

 

29

 

 

 

 

 

 

32

 

Non-Cash Equity Compensation

 

 

 

 

 

 

 

1

 

 

1

 

Adjusted EBITDA

 

$

78

 

 

$

217

 

 

$

14

 

 

$

(5

)

 

$

304

 

 

Appendix Table A-3: Six Months Ended June 30, 2019, 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

 

Thermal

 

Corporate

 

Total

Net (Loss) Income

 

$

56

 

 

$

(76

)

 

$

(10

)

 

$

(53

)

 

$

(83

)

Plus:

 

 

 

 

 

 

 

 

 

 

Income Tax Benefit

 

 

 

 

 

 

 

(3

)

 

(3

)

Interest Expense, net

 

31

 

 

147

 

 

8

 

 

42

 

 

228

 

Depreciation, Amortization, and ARO

 

50

 

 

113

 

 

13

 

 

 

 

176

 

Contract Amortization

 

3

 

 

30

 

 

1

 

 

 

 

34

 

Impairment Losses

 

 

 

 

 

19

 

 

 

 

19

 

Loss on Debt Extinguishment

 

 

 

1

 

 

 

 

 

 

1

 

Mark to Market (MtM) Losses on Economic Hedges

 

 

 

7

 

 

 

 

 

 

7

 

Transaction and Integration costs

 

 

 

 

 

 

 

2

 

 

2

 

Other Non-recurring Charges

 

(2

)

 

2

 

 

1

 

 

1

 

 

2

 

Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates

 

7

 

 

78

 

 

 

 

 

 

85

 

Non-Cash Equity Compensation

 

 

 

 

 

 

 

1

 

 

1

 

Adjusted EBITDA

 

$

145

 

 

$

302

 

 

$

32

 

 

$

(10

)

 

$

469

 

 

Appendix Table A-4: Six Months Ended June 30, 2018, 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

 

Thermal

 

Corporate

 

Total

Net Income (Loss)

 

$

68

 

 

$

76

 

 

$

14

 

 

$

(62

)

 

$

96

 

Plus:

 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

 

 

 

 

 

 

6

 

 

6

 

Interest Expense, net

 

19

 

 

58

 

 

4

 

 

43

 

 

124

 

Depreciation, Amortization, and ARO

 

50

 

 

104

 

 

11

 

 

 

 

165

 

Contract Amortization

 

3

 

 

31

 

 

1

 

 

 

 

35

 

Transaction and Integration costs

 

 

 

 

 

 

 

2

 

 

2

 

Other Non-recurring Charges

 

(3

)

 

1

 

 

 

 

 

 

(2

)

Adjustments to reflect CWEN’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates

 

7

 

 

59

 

 

 

 

 

 

66

 

Non-Cash Equity Compensation

 

 

 

 

 

 

 

1

 

 

1

 

Adjusted EBITDA

 

$

144

 

 

$

329

 

 

$

30

 

 

$

(10

)

 

$

493

 

 

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

 

Six Months Ended

($ in millions)

6/30/19

 

6/30/18

 

6/30/19

 

6/30/18

Adjusted EBITDA

$

278

 

 

$

304

 

 

$

469

 

 

$

493

 

Cash interest paid

(80

)

 

(71

)

 

(153

)

 

(146

)

Changes in prepaid and accrued liabilities for tolling agreements

(25

)

 

(26

)

 

(60

)

 

(62

)

Adjustment to reflect Walnut Creek investment payments

 

 

(1

)

 

(5

)

 

(1

)

Pro-rata Adjusted EBITDA from unconsolidated affiliates

(63

)

 

(61

)

 

(101

)

 

(99

)

Distributions from unconsolidated affiliates

11

 

 

19

 

 

22

 

 

32

 

Changes in working capital and other

(32

)

 

(48

)

 

(22

)

 

(36

)

Cash from Operating Activities

89

 

 

116

 

 

150

 

 

181

 

Changes in working capital and other

32

 

 

48

 

 

22

 

 

36

 

Development Expenses9

2

 

 

 

 

3

 

 

 

Return of investment from unconsolidated affiliates

3

 

 

4

 

 

17

 

 

18

 

Net contributions (to)/from non-controlling interest10

(2

)

 

(2

)

 

 

 

9

 

Maintenance capital expenditures11

(2

)

 

(9

)

 

(6

)

 

(16

)

Principal amortization of indebtedness12

(62

)

 

(62

)

 

(146

)

 

(141

)

Cash receipts from notes receivable13

 

 

3

 

 

 

 

7

 

Adjustments to reflect CAFD generated by unconsolidated investments that are unable to distribute project dividends due to the PG&E bankruptcy

8

 

 

 

 

15

 

 

 

Cash Available for Distribution

$

68

 

 

$

98

 

 

$

55

 

 

$

94

 

 

Appendix Table A-6: Six Months Ended June 30, 2019, Sources and Uses of Liquidity

The following table summarizes the sources and uses of liquidity in 2019:

 

 

Six Months
Ended

($ in millions)

 

6/30/19

Sources:

 

 

Proceeds from the issuance of long-term debt

 

493

 

Net cash provided by operating activities

 

150

 

Net contributions from noncontrolling interests

 

(11

)

Return of investment from unconsolidated affiliates

 

17

 

 

 

 

Uses:

 

 

Payments for long-term debt

 

(616

)

Capital expenditures

 

(96

)

Payment of dividends and distributions

 

(77

)

Buyout of Wind TE Holdco noncontrolling interest

 

(19

)

Payments of debt issuance costs

 

(15

)

Investments in unconsolidated affiliates

 

(9

)

Acquisitions

 

(100

)

Other net cash outflows

 

(4

)

 

 

 

 

 

 

Change in total cash, cash equivalents, and restricted cash

 

$

(287

)

 

Appendix Table A-7: Adjusted EBITDA and Cash Available for Distribution Guidance

($ in millions)

 

Original
2019 Full
Year
Guidance

Revised
2019 Full
Year
Guidance

Net Income

 

165

 

20

 

Income Tax Expense

 

30

 

3

 

Interest Expense, net

 

315

 

380

 

Depreciation, Amortization, and ARO Expense

 

395

 

405

 

Acquisition related transaction and integration costs

 

5

 

5

 

Other Non-Cash Charges

 

 

27

 

Adjustment to reflect CWEN share of Adjusted EBITDA in unconsolidated affiliates

 

85

 

130

 

Adjusted EBITDA

 

995

 

970

 

Cash interest paid

 

(300

)

(302

)

Changes in prepaid and accrued liabilities for tolling agreements

 

4

 

4

 

Adjustment to reflect Walnut Creek investment payments

 

(1

)

(5

)

Pro-rata Adjusted EBITDA from unconsolidated affiliates

 

(215

)

(205

)

Cash distributions from unconsolidated affiliates14

 

130

 

125

 

Cash from Operating Activities

 

613

 

587

 

Development Expense15

 

4

 

4

 

Net contributions to non-controlling interest16

 

(4

)

(6

)

Maintenance capital expenditures

 

(30

)

(30

)

Principal amortization of indebtedness17

 

(313

)

(305

)

Cash Available for Distribution

 

270

 

250

 

Add Back: Principal amortization of indebtedness

 

313

 

305

 

Adjusted Cash from Operations

 

583

 

 

555

 

 

Appendix Table A-8: Hawaii Solar Phase I and Repowering 1.0 5 Year Average CAFD

($ in millions)

 

Hawaii Solar
Phase I
5 Year Ave. -
2020-2024

Repowering
1.0
5 Year Ave. -
2020-2024

Net Income

 

 

7.2

 

 

4

 

Interest Expense, net

 

7.4

 

(4

)

Depreciation, Amortization, and ARO Expense

 

10.2

 

 

Adjusted EBITDA

 

24.8

 

 

Cash interest paid

 

(7.4

)

4

 

Cash from Operating Activities

 

17.4

 

4

 

Net distributions to non-controlling interest

 

(9.7

)

(7

)

Maintenance capital expenditures

 

 

3

 

Principal amortization of indebtedness

 

(5.1

)

12

 

Estimated Cash Available for Distribution

 

2.6

 

12

 

EBITDA and Adjusted EBITDA 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 Adjusted EBITDA 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 (CAFD) is Adjusted EBITDA plus cash distributions/return of investment from unconsolidated affiliates, adjustments to reflect CAFD generated by unconsolidated investments that are unable to distribute project dividends due to the PG&E bankruptcy, cash receipts from notes receivable, cash distributions from noncontrolling interests, 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, Walnut Creek investment payments, 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.

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1 Includes adjustments to reflect CAFD generated by unconsolidated investments that are unable to distribute project dividends due to the PG&E bankruptcy
2 Excludes unconsolidated projects
3 Generation sold excludes MWh that are reimbursable for economic curtailment
4 Subject to closing adjustments; Per terms of the partnership agreement, the Company’s asset level CAFD yield will be no lower than 11% at closing on a 5-year average basis
5 CAFD average over the 5-year period from 2020-2024 and is based on the currently estimated net corporate capital commitment
6 5 Year Average over the period 2020-2024
7 Excludes $26 million for 14 MW of residential solar leases acquired outside of partnerships
8 Based on cash to be distributed; excludes 14 MW of residential solar leases acquired outside of partnership
9 Primarily relates to Thermal Development Expenses
10 Excludes $18 million of contributions in 2019 related to funding of Oahu tax equity partnership; Excludes $80 million in 2Q18 and $99 million of contributions in 2018 related to funding Buckthorn Solar tax equity partnership
11 Net of allocated insurance proceeds
12 Excludes $220 million in 2019 for Convertible Notes, $101 million repaid at Viento in connection with the Repowering Partnership, $22 million for revolver repayments, and $3 million for the refinancing of South Trent
13 Represents reimbursement of network upgrades
14 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
15 Primarily relates to Thermal Development Expenses
16 Includes tax equity proceeds and distributions to tax equity partners
17 Excludes $220 million in 2019 for Convertible Notes, $101 million repaid at Viento in connection with the Repowering Partnership, $22 million for revolver repayments, and $3 million for the refinancing of South Trent

Investors:
Akil Marsh
[email protected]
609-608-1500

Media:
Zadie Oleksiw
[email protected]
202-836-5754


Source: Business Wire (August 6, 2019 - 6:26 AM EDT)

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