Clearway Energy Inc

Previous wording

As you read this discussion and analysis, refer to the Company’s consolidated financial statements to this Form 10-Q, which present the results of operations for the three and nine months ended September 30, 2024 and 2023. Also refer to the Company’s 2023 Form 10-K, which includes detailed discussions of various items impacting the Company’s business, results of operations and financial condition.

Current wording

As you read this discussion and analysis, refer to the Company’s consolidated financial statements to this Form 10-Q, which present the results of operations for the three months ended March 31, 2025 and 2024. Also refer to the Company’s 2024 Form 10-K, which includes detailed discussions of various items impacting the Company’s business, results of operations and financial condition.

Previous wording

•Results of operations, including an explanation of significant differences between the periods in the specific line items of the consolidated statements of income;

Current wording

•Results of operations, including an explanation of significant differences between the periods in the specific line items of the consolidated statements of operations;

Previous wording

Clearway Energy, Inc., together with its consolidated subsidiaries, or the Company, is a publicly-traded energy infrastructure investor with a focus on investments in clean energy and owner of modern, sustainable and long-term contracted assets across North America. The Company is sponsored by GIP and TotalEnergies through the portfolio company, Clearway Energy Group LLC, or CEG, which is equally owned by GIP and TotalEnergies. GIP is an independent infrastructure fund manager that makes equity and debt investments in infrastructure assets and businesses. TotalEnergies is a global multi-energy company. CEG is a leading developer of renewable energy infrastructure in the U.S. On October 1, 2024, BlackRock acquired 100% of the business and assets of GIM, which is the investment manager of the GIP funds that own an interest in CEG. BlackRock is a publicly-traded global investment management firm.

Current wording

Clearway Energy, Inc., together with its consolidated subsidiaries, or the Company, is a publicly-traded energy infrastructure investor with a focus on investments in clean energy and owner of modern, sustainable and long-term contracted assets across North America. The Company is sponsored by Clearway Energy Group LLC, or CEG, which is equally owned by GIP and TotalEnergies.

Previous wording

The Company is one of the largest renewable energy owners in the U.S. with approximately 6,500 net MW of installed wind, solar and battery energy storage system, or BESS, facilities. The Company’s approximately 9,000 net MW of assets also includes approximately 2,500 net MW of environmentally-sound, highly efficient natural gas-fired generation facilities. Through this environmentally-sound, diversified and primarily contracted portfolio, the Company endeavors to provide its investors with stable and growing dividend income. The majority of the Company’s revenues are derived from long-term contractual arrangements for the output or capacity from these assets. The weighted average remaining contract duration of these offtake agreements was approximately 10 yearsas of September 30, 2024 based on CAFD.

Current wording

The Company is one of the largest owners of clean energy generation assets in the U.S. The Company’s portfolio comprises approximately 11.8 GW of gross capacity in 26 states, including approximately 9 GW of wind, solar and battery energy storage systems, or BESS, and approximately 2.8 GW of dispatchable combustion-based power generation assets included in the Flexible Generation segment that provide critical grid reliability services. Through this environmentally-sound, diversified and primarily contracted portfolio, the Company endeavors to provide its investors with stable and growing dividend income. The majority of the Company’s revenues are derived from long-term contractual arrangements for the output or capacity from these assets. The weighted average remaining contract duration of the Company’s Renewables & Storage segment offtake agreements was approximately 12 yearsas of March 31, 2025 based on CAFD.

Previous wording

•On March 28, 2024, the Company contracted with a load serving entity to sell approximately 90 MW of Marsh Landing’s RA commencing in September 2026 and ending in December 2030. On July 31, 2024, the Company contracted with an additional load serving entity to sell approximately 195 MW of Marsh Landing’s RA commencing in October 2026 and ending in December 2028. Marsh Landing is now contracted for approximately 99% of its capacity through 2027 and approximately 49% of its capacity through 2028.

Current wording

•On January 14, 2025, the Company contracted with a load serving entity to sell approximately 75 MW of El Segundo’s RA commencing in August 2026 and ending in December 2029. On February 4, 2025, the Company contracted with an additional load serving entity to sell approximately 197 MW of El Segundo’s RA commencing in August 2026 and ending in December 2029. El Segundo is now contracted for 100% of its capacity through 2027 and approximately 50% of its capacity through 2028.

Previous wording

•In connection with the 2024 Drop Downs of Texas Solar Nova 2 and Cedar Creek, the Company assumed non-recourse facility-level debt. See Note 7, Long-term Debt, for further discussion of the non-recourse facility-level debt associated with each facility.

Current wording

•In connection with the 2025 Drop Down of Rosamond South I, the Company assumed non-recourse facility-level debt. See Note 7, Long-term Debt, for further discussion of the non-recourse facility-level debt associated with the facility.

Previous wording

•On June 11, 2024, the Company, through its indirect subsidiary, NIMH Solar LLC, refinanced its amended and restated credit agreement, which was scheduled to mature in September 2024, resulting in the issuance of a $137 million term loan facility, as well as $17 million in letters of credit in support of debt service and facility obligations. The Company utilized the proceeds from the term loan and existing sources of liquidity to pay off the existing debt. See Note 7, Long-term Debt, for further discussion of the refinanced credit agreement.

Current wording

•On April 9, 2025, the Company, through its indirect subsidiary, Buckthorn Solar Portfolio LLC, refinanced its credit agreement, which was scheduled to mature in May 2025, resulting in the issuance of a $104 million term loan facility, as well as $22 million in letters of credit in support of debt service and facility obligations. The Company utilized the proceeds from the term loan and existing sources of liquidity to pay off the existing debt. See Note 7, Long-term Debt, for further discussion of the refinanced credit agreement.

Previous wording

The Company is subject to a wide range of environmental laws during the development, construction, ownership and operation of facilities. These existing and future laws generally require that governmental permits and approvals be obtained before construction and maintained during operation of facilities. The Company is obligated to comply with all environmental laws and regulations applicable within each jurisdiction and required to implement environmental programs and procedures to monitor and control risks associated with the construction, operation and decommissioning of regulated or permitted energy assets. Federal and state environmental laws have historically become more stringent over time, although this trend could change in the future.

Current wording

The Company is subject to a wide range of environmental laws during the development, construction, ownership and operation of facilities. These existing and future laws generally require that governmental permits and approvals be obtained before construction and maintained during operation of facilities. The Company is obligated to comply with all environmental laws and regulations applicable within each jurisdiction and required to implement environmental programs and procedures to monitor and control risks associated with the construction, operation and decommissioning of regulated or permitted energy assets. Federal, state and local environmental laws have historically become more stringent over time, although this trend could change in the future.

Previous wording

On March 6, 2024, the SEC adopted a new set of rules that require a wide range of climate-related disclosures, including material climate-related risks, information on any climate-related targets or goals that are material to the registrant’s business, results of operations or financial condition, Scope 1 and Scope 2 GHG emissions on a phased-in basis by certain larger registrants when those emissions are material and the filing of an attestation report covering the same, and disclosure of the financial statement effects of severe weather events and other natural conditions including costs and losses. Compliance dates under the final rule are phased in by registrant category. Multiple lawsuits have been filed challenging the SEC’s new climate rules, which have been consolidated and will be heard in the U.S. Court of Appeals for the Eighth Circuit. On April 4, 2024, the SEC issued an order staying the final rules until judicial review is complete.

Current wording

On March 6, 2024, the SEC adopted a new set of rules that would require a wide range of climate-related disclosures, including material climate-related risks, information on any climate-related targets or goals that are material to the registrant’s business, results of operations or financial condition, Scope 1 and Scope 2 GHG emissions on a phased-in basis by certain larger registrants when those emissions are material and the filing of an attestation report covering the same, and disclosure of the financial statement effects of severe weather events and other natural conditions including costs and losses. Litigation challenging the rules was filed by multiple parties in multiple jurisdictions, which was consolidated and assigned to the U.S. Court of Appeals for the Eighth Circuit. On April 4, 2024, the SEC announced that it was voluntarily delaying the implementation of the climate disclosure rules while the U.S. Court of Appeals considered the litigation. On March 27, 2025, the SEC voted to end the defense of the rules in the litigation.

Previous wording

Operating revenues increased by $115 million during the three months ended September 30, 2024, compared to the same period in 2023, due to a combination of the drivers summarized in the table below:

Current wording

Operating revenues increased by $35 million during the three months ended March 31, 2025, compared to the same period in 2024, due to a combination of the drivers summarized in the table below:

Previous wording

Cost of fuels decreased by $13 million during the three months ended September 30, 2024, compared to the same period in 2023, primarily driven by lower prices on fuel purchases at the Walnut Creek and Marsh Landing facilities.

Current wording

Cost of fuels decreased by $14 million during the three months ended March 31, 2025, compared to the same period in 2024, primarily due to lower generation at the Walnut Creek, Marsh Landing and El Segundo facilities, which resulted in less fuel purchases.

Previous wording

Equity in earnings of unconsolidated affiliates increased by $22 million during nine months ended September 30, 2024, compared to the same period in 2023, due to changes in the fair value of interest rate swaps, lower depreciation expense and higher wind production.

Current wording

Interest expense increased by $59 million during the three months ended March 31, 2025, compared to the same period in 2024, primarily due to the change in fair value of interest rate swaps due to changes in interest rates.

Previous wording

For the three months ended September 30, 2024, the Company recorded an income tax expense of $33 million on pretax income of $60 million. For the same period in 2023, the Company recorded an income tax expense of $57 million on pretax income of $72 million. The $24 million decrease in income tax expense during the three months ended September 30, 2024, compared to the same period in 2023, was primarily due to the allocation of taxable earnings and losses, which includes the effect of applying the HLBV method of accounting for book purposes for certain partnerships.

Current wording

For the three months ended March 31, 2025, the Company recorded an immaterial income tax expense on a pretax loss of $104 million. For the same period in 2024, the Company recorded an income tax benefit of $13 million on a pretax loss of $59 million. The $13 million decrease in income tax benefit during the three months ended March 31, 2025, compared to the same period in 2024, was primarily due to the allocation of taxable earnings and losses, which includes the effect of applying the HLBV method of accounting for book purposes for certain partnerships.

Previous wording

For the nine months ended September 30, 2024, the Company had a net loss of $100 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:

Current wording

For the three months ended March 31, 2025, the Company had a net loss of $108 million attributable to noncontrolling interests comprised of the following:

Previous wording

For the three months ended September 30, 2024, the Company had a net loss of $9 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:

Current wording

For the three months ended March 31, 2024, the Company had a net loss of $44 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:

Previous wording

The Company’s principal liquidity requirements are to meet its financial commitments, finance current operations, fund capital expenditures, including acquisitions from time to time, service debt and pay dividends. As a normal part of the Company’s business, depending on market conditions, the Company will from time to time consider opportunities to repay, redeem, repurchase or refinance its indebtedness. Changes in the Company’s operating plans, lower than anticipated sales, increased expenses, acquisitions or other events may cause the Company to seek additional debt or equity financing in future periods. There can be no guarantee that financing will be available on acceptable terms or at all. Debt financing, if available, could impose additional cash payment obligations and additional covenants and operating restrictions.

Current wording

The Company’s principal liquidity requirements are to meet its financial commitments, finance current operations, fund capital expenditures, including investments and acquisitions from time to time, service debt and pay dividends. As a normal part of the Company’s business, depending on market conditions, the Company will from time to time consider opportunities to repay, redeem, repurchase or refinance its indebtedness. Changes in the Company’s operating plans, lower than anticipated sales, increased expenses, investments, acquisitions or other events may cause the Company to seek additional debt or equity financing in future periods. There can be no guarantee that financing will be available on acceptable terms or at all. Debt financing, if available, could impose additional cash payment obligations and additional covenants and operating restrictions.

Previous wording

As of September 30, 2024 and December 31, 2023, the Company’s liquidity was approximately $1.27 billion and $1.51 billion, respectively, comprised of cash, restricted cash and availability under the Company’s revolving credit facility.

Current wording

As of March 31, 2025 and December 31, 2024, the Company’s liquidity was approximately $1,325 million and $1,330 million, respectively, comprised of cash, restricted cash and availability under the Company’s revolving credit facility.

Previous wording

The Company’s liquidity includes $382 million and $516 million of restricted cash balances as of September 30, 2024 and December 31, 2023, respectively. Restricted cash consists primarily of funds to satisfy the requirements of certain debt arrangements and funds held within the Company’s facilities that are restricted in their use. As of September 30, 2024, these restricted funds were comprised of $183 million designated to fund operating expenses, approximately $71 million designated for current debt service payments and $89 million restricted for reserves including debt service, performance obligations and other reserves, as well as capital expenditures. The remaining $39 million is held in distribution reserve accounts.

Current wording

The Company’s liquidity includes $414 million and $401 million of restricted cash balances as of March 31, 2025 and December 31, 2024, respectively. Restricted cash consists primarily of funds to satisfy the requirements of certain debt arrangements and funds held within the Company’s facilities that are restricted in their use. As of March 31, 2025, these restricted funds were comprised of $166 million designated to fund operating expenses, approximately $133 million designated for current debt service payments and $83 million restricted for reserves including debt service, performance obligations and other reserves, as well as capital expenditures. The remaining $32 million is held in distribution reserve accounts.

Previous wording

As of September 30, 2024, the Company had no outstanding borrowings under the revolving credit facility and $108 million in letters of credit outstanding. The facility will continue to be used for general corporate purposes including financing of future acquisitions and posting letters of credit.

Current wording

As of March 31, 2025, the Company had no outstanding borrowings under the revolving credit facility and $86 million in letters of credit outstanding. The facility will continue to be used for general corporate purposes including financing of future investments or acquisitions and posting letters of credit.

Previous wording

The Company’s requirements for liquidity and capital resources, other than for operating its facilities, are categorized as: (i) debt service obligations, as described more fully in Note 7, Long-term Debt; (ii) capital expenditures; (iii) off-balance sheet arrangements; (iv) acquisitions and investments, as described more fully in Note 3, Acquisitions and Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities; and (v) cash dividends to investors.

Current wording

The Company’s requirements for liquidity and capital resources, other than for operating its facilities, are categorized as: (i) debt service obligations, as described more fully in Note 7, Long-term Debt; (ii) capital expenditures; (iii) off-balance sheet arrangements; (iv) acquisitions and investments, as described more fully in Note 3, Acquisitions; and (v) cash dividends to investors.

Previous wording

The Company’s capital spending program is mainly focused on maintenance capital expenditures, consisting of costs to maintain the assets currently operating, such as costs to replace or refurbish assets during routine maintenance, and growth capital expenditures consisting of costs to construct new assets and costs to complete the construction of assets where construction is in process.

Current wording

The Company’s capital spending program is mainly focused on maintenance capital expenditures, consisting of costs to maintain the assets currently operating, such as costs to replace or refurbish assets during routine maintenance, and growth capital expenditures consisting of costs to construct new assets, costs to increase the operating capacity of existing assets and costs to complete the construction of assets where construction is in process.

Previous wording

For the nine months ended September 30, 2024, the Company used approximately $237 million to fund capital expenditures, including growth expenditures of $229 million, primarily in the Renewables segment, funded through construction-related financing. Growth capital expenditures included $106 million incurred in connection with the Victory Pass and Arica solar and BESS facilities, $41 million incurred in connection with the Rosamond Central BESS facility, $28 million incurred in connection with the repowering of the Cedro Hill wind facility, $18 million incurred in connection with the Texas Solar Nova 1 and Texas Solar Nova 2 facilities, $14 million incurred in connection with the Daggett 2 solar and BESS facility, $9 million incurred in connection with the Daggett 3 solar and BESS facility, $8 million incurred in connection with the Cedar Creek wind facility and $5 million incurred by other facilities. In addition, the Company incurred $8 million in maintenance capital expenditures.

Current wording

For the three months ended March 31, 2025, the Company used approximately $56 million to fund capital expenditures, including growth expenditures of $55 million, primarily in the Renewables & Storage segment, funded through construction-related financing. Growth capital expenditures included $19 million incurred in connection with the Dan’s Mountain wind facility, $17 million incurred in connection with the repowering of the Cedro Hill wind facility, $9 million in connection with the Rosamond South I solar and BESS facility, $6 million in connection with the Victory Pass and Arica solar and BESS facilities and $4 million incurred by other facilities. In addition, the Company incurred$1 million of maintenance capital expenditures, which is net of credits received from equipment manufacturers.

Previous wording

Variable interest in equity investments — As of September 30, 2024, the Company has several investments with an ownership interest percentage of 50% or less. GenConn is a VIE for which the Company is not the primary beneficiary. The Company’s pro-rata share of non-recourse debt held by unconsolidated affiliates was approximately $290 million as of September 30, 2024. This indebtedness may restrict the ability of these subsidiaries to issue dividends or distributions to the Company.

Current wording

Variable interest in equity investments — As of March 31, 2025, the Company has several investments with an ownership interest percentage of 50% or less. GenConn is a VIE for which the Company is not the primary beneficiary. The Company’s pro-rata share of non-recourse debt held by unconsolidated affiliates was approximately $277 million as of March 31, 2025. This indebtedness may restrict the ability of these subsidiaries to issue dividends or distributions to the Company.

Previous wording

The following table lists the dividends paid on the Company’s Class A common stock and Class C common stock during the nine months ended September 30, 2024:

Current wording

The following table lists the dividends paid on the Company’s Class A common stock and Class C common stock during the three months ended March 31, 2025:

Previous wording

On October 29, 2024, the Company declared quarterly dividends on its Class A and Class C common stock of $0.4240 per share payable on December 16, 2024 to stockholders of record as of December 2, 2024.

Current wording

On April 29, 2025, the Company declared quarterly dividends on its Class A and Class C common stock of $0.4384 per share payable on June 16, 2025 to stockholders of record as of June 2, 2025.

Previous wording

Net Cash Used in Financing Activities

Current wording

Net Cash (Used in) Provided by Financing Activities

Previous wording

As of December 31, 2023, the Company had a cumulative federal NOL carryforward balance of $353 million for financial statement purposes, none of which were subject to expiration. Additionally, as of December 31, 2023, the Company had a cumulative state NOL carryforward balance of $102 million for financial statement purposes, which will expire between 2024 and 2040 if unutilized. The Company does not anticipate material income tax payments through 2026. In addition, as of December 31, 2023, the Company had PTC and ITC carryforward balances totaling $21 million, which will expire between 2035 and 2043 if unutilized.

Current wording

As of December 31, 2024, the Company had a cumulative federal NOL carryforward balance of $278 million for financial statement purposes, none of which were subject to expiration. Additionally, as of December 31, 2024, the Company had a cumulative state NOL carryforward balance of $99 million for financial statement purposes, which will expire between 2025 and 2041 if unutilized. The Company does not anticipate material income tax payments through 2026. In addition, as of December 31, 2024, the Company had PTC and ITC carryforward balances totaling $23 million, which will expire between 2035 and 2044 if unutilized.

Previous wording

As of December 31, 2023, the Company had an interest disallowance carryforward of $75 million as a result of Internal Revenue Code §163(j). The disallowed interest deduction has an indefinite carryforward period and any limitations on the utilization of this carryforward have been factored into the Company’s valuation allowance analysis.

Current wording

As of December 31, 2024, the Company had an interest disallowance carryforward of $82 million as a result of Internal Revenue Code §163(j). The disallowed interest deduction has an indefinite carryforward period and any limitations on the utilization of this carryforward have been factored into the Company’s valuation allowance analysis.

Previous wording

The Company, after the utilization of various federal and state NOL carryforwards, paid $1 million in federal and state income taxes during the nine months ended September 30, 2024 and does not expect to pay additional material federal or state income taxes for the remainder of the current year. The Company does not anticipate being subject to the corporate minimum tax on financial statement income as enacted by the recently passed the IRA, which is discussed in further detail below.

Current wording

The Company did not make any income tax payments during the three months ended March 31, 2025. The Company does not expect to pay additional material federal or state income taxes for the remainder of the current year. The Company does not anticipate being subject to the corporate minimum tax on financial statement income, which is discussed in further detail below.

Previous wording

The IRA contains a number of revisions to the Internal Revenue Code, including a 15% corporate minimum income tax for certain taxpayers, a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022 and business tax credits and incentives for the development of clean energy facilities and the production of clean energy. The Company continues to analyze the potential impact of the IRA and monitor guidance to be issued by the United States Department of the Treasury, but it does not anticipate the corporate minimum tax will apply to it or that the IRA will otherwise have a material impact on its consolidated financial statements.

Current wording

Federal tax legislation enacted in 2022 contains a number of revisions to the Internal Revenue Code, including a 15% corporate minimum income tax for certain taxpayers, a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022 and business tax credits and incentives for the development of clean energy facilities and the production of clean energy. The Company continues to analyze the potential impact of this tax legislation and monitor guidance that may be issued by the United States Department of the Treasury, but it does not anticipate the corporate minimum tax will apply to it or that the foregoing tax provisions will otherwise have a material impact on its consolidated financial statements.

Previous wording

The Company is subject to examination by taxing authorities for income tax returns filed in the U.S. federal and various state jurisdictions. All tax returns filed by the Company for the year ended December 31, 2013 and forward remain subject to audit. As of September 30, 2024, the U.S. federal partnership returns of three of the Company’s subsidiaries are under audit by the IRS. The IRS has issued proposed adjustments with respect to one of the subsidiaries under audit, which the Company believes that such proposed adjustments are without merit and would not impact the Company’s tax liability or the tax liability of such subsidiary. The IRS has not yet issued any proposed adjustments with respect to the other two subsidiaries under audit. The Company believes that the ultimate resolution of each of these audits will not be material to the Company’s financial condition, results of operations or liquidity. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. The outcome of tax audits cannot be predicted with certainty and if any issues addressed in tax audits of the Company are resolved in a manner inconsistent with its expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.

Current wording

The Company is subject to examination by taxing authorities for income tax returns filed in the U.S. federal and various state jurisdictions. All tax returns filed by the Company for the year ended December 31, 2013 and forward remain subject to audit. As of December 31, 2024, the U.S. federal partnership returns of three of the Company’s subsidiaries are under audit by the IRS. The IRS has issued proposed adjustments with respect to one of the subsidiaries under audit. The Company believes that such proposed adjustments are without merit and in any case would not impact the Company’s tax liability or the tax liability of such subsidiary. The IRS has not yet issued any proposed adjustments with respect to the other two subsidiaries under audit. The Company believes that the ultimate resolution of each of these audits will not be material to the Company’s financial condition, results of operations or liquidity, and thus no material provision has been made for any adjustments that may result from tax examinations. The outcome of tax audits cannot be predicted with certainty and if any issues addressed in tax audits of the Company are resolved in a manner inconsistent with its expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.

Previous wording

The Company has no material uncertain tax benefits as of September 30, 2024.

Current wording

The Company had no material uncertain tax benefits as of March 31, 2025.

Previous wording

The Company identifies its most critical accounting policies as those that are the most pervasive and important to the portrayal of the Company’s financial position and results of operations, and that require the most difficult, subjective and/or complex judgments by management regarding estimates about matters that are inherently uncertain. The Company’s critical accounting policies include income taxes and valuation allowance for deferred tax assets, accounting utilizing HLBV, acquisition accounting and determining the fair value of financial instruments.

Current wording

The Company identifies its most critical accounting policies as those that are the most pervasive and important to the portrayal of the Company’s financial position and results of operations, and that require the most difficult, subjective and/or complex judgments by management regarding estimates about matters that are inherently uncertain. The Company’s critical accounting policies include income taxes and valuation allowance for deferred tax assets, accounting utilizing HLBV and determining the fair value of financial instruments.