UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| ☒ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||||
For the quarterly period ended June 30, 2026
| ☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||
Commission File Number: 001-36002
Clearway Energy, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 46-1777204 | ||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| 300 Carnegie Center, Suite 300 | Princeton | New Jersey | 08540 | ||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(609) 608-1525
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Class C Common Stock, par value $0.01 | CWEN | New York Stock Exchange | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | ||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
Emerging growth company | ☐ | ||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of July 31, 2026, there were 42,738,750 shares of Class B common stock outstanding, par value $0.01 per share, 121,174,960 shares of Class C common stock outstanding, par value $0.01 per share, and 41,361,142 shares of Class D common stock outstanding, par value $0.01 per share.
TABLE OF CONTENTS
Index
2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q of Clearway Energy, Inc., together with its consolidated subsidiaries, or the Company, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The words “believes,” “projects,” “anticipates,” “plans,” “expects,” “intends,” “estimates” and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors, risks and uncertainties include the factors described under Item 1A — Risk Factors in Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as well as the following:
•The Company’s ability to maintain and grow its quarterly dividend;
•Potential risks related to the Company's relationships with CEG and its owners;
•The Company’s ability to successfully identify, evaluate and consummate investment opportunities, as well as acquisitions from, and dispositions to, third parties;
•The Company’s ability to acquire assets from CEG;
•The Company’s ability to borrow additional funds and access capital markets, as well as the Company’s substantial indebtedness and the possibility that the Company may incur additional indebtedness going forward;
•Changes in law, including judicial decisions;
•Hazards customary to the power production industry and power generation operations such as fuel and electricity price volatility, unusual weather conditions (including wind and solar conditions), catastrophic weather-related or other damage to facilities, unscheduled generation outages, maintenance or repairs, unanticipated changes to fuel supply costs or availability due to higher demand, shortages, transportation problems or other developments, environmental incidents, or electric transmission or gas pipeline system constraints and the possibility that the Company may not have adequate insurance to cover losses as a result of such hazards;
•The Company’s ability to operate its businesses efficiently, manage maintenance capital expenditures and costs effectively, and generate earnings and cash flows from its asset-based businesses in relation to its debt and other obligations;
•The willingness and ability of counterparties to the Company’s offtake agreements to fulfill their obligations under such agreements;
•The Company’s ability to enter into contracts to sell power and procure fuel on acceptable terms and prices;
•Government regulation, including compliance with regulatory requirements and changes in market rules, rates, tariffs and environmental laws;
•Operating and financial restrictions placed on the Company that are contained in the facility-level debt facilities and other agreements of certain subsidiaries and facility-level subsidiaries generally, in the Clearway Energy Operating LLC amended and restated revolving credit facility and in the indentures governing the Senior Notes; and
•Cyber terrorism and inadequate cybersecurity, or the occurrence of a catastrophic loss and the possibility that the Company may not have adequate insurance to cover losses resulting from such hazards or the inability of the Company’s insurers to provide coverage.
Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause the Company’s actual results to differ materially from those contemplated in any forward-looking statements included in this Quarterly Report on Form 10-Q should not be construed as exhaustive.
3
GLOSSARY OF TERMS
When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:
| 2025 Form 10-K | The Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 24, 2026 | ||||
| 2028 Senior Notes | $850 million aggregate principal amount of 4.75% unsecured senior notes due 2028, issued by Clearway Energy Operating LLC | ||||
| 2031 Senior Notes | $925 million aggregate principal amount of 3.75% unsecured senior notes due 2031, issued by Clearway Energy Operating LLC | ||||
| 2032 Senior Notes | $350 million aggregate principal amount of 3.75% unsecured senior notes due 2032, issued by Clearway Energy Operating LLC | ||||
| 2034 Senior Notes | $600 million aggregate principal amount of 5.75% unsecured senior notes due 2034, issued by Clearway Energy Operating LLC | ||||
| Adjusted EBITDA | A non-GAAP measure, represents earnings before interest (including loss on debt extinguishment), tax, depreciation and amortization adjusted for mark-to-market gains or losses, asset write offs and impairments; and factors which the Company does not consider indicative of future operating performance | ||||
| ASC | The FASB Accounting Standards Codification, which the FASB established as the source of authoritative GAAP | ||||
| ATM Program | At-The-Market Equity Offering Program | ||||
| BESS | Battery energy storage system | ||||
| CAFD | A non-GAAP measure, Cash Available for Distribution is defined as of June 30, 2026 as Adjusted EBITDA plus cash distributions/return of investment from unconsolidated affiliates, cash receipts from notes receivable, cash distributions from noncontrolling interests, adjustments to reflect sales-type lease cash payments and payments for lease expenses, less cash distributions to noncontrolling interests, maintenance capital expenditures, pro-rata Adjusted EBITDA from unconsolidated affiliates, cash interest paid, income taxes paid, principal amortization of indebtedness, changes in prepaid and accrued capacity payments and adjusted for development expenses | ||||
| Cardinal Portfolio | 610 MW portfolio of operational solar facilities located in eight states that the Company acquired on March 30, 2026, previously referred to as the Deriva Solar Portfolio. | ||||
| Catalina | 109 MW solar facility located in Kern County, California that the Company leases and operates | ||||
| CEG | Clearway Energy Group LLC (formerly Zephyr Renewables LLC) | ||||
| CEG Master Services Agreement | Amended and Restated Master Services Agreement and Payroll Sharing Agreement, effective as of January 1, 2025, among the Company, Clearway Energy Finance Inc., Clearway Energy LLC, Clearway Energy Operating LLC and CEG | ||||
| Class A Conversion | The conversion of each share of the Company’s Class A common stock into one share of the Company’s Class C common stock, which occurred on May 1, 2026. | ||||
| Clearway Energy LLC | The holding company through which the facilities are owned by Clearway Energy Group LLC, the holder of Class B and Class D units, and the Company, the holder of the Class C units | ||||
| Clearway Energy Group LLC | The holder of all shares of the Company’s Class B and Class D common stock and Clearway Energy LLC’s Class B and Class D units and, from time to time, possibly shares of the Company’s Class C common stock. Clearway Energy Group LLC is a leading developer of renewable energy, energy storage and power infrastructure in the U.S. | ||||
| Clearway Energy Operating LLC | The holder of facilities that are owned by Clearway Energy LLC | ||||
| Clearway Renew | Clearway Renew LLC, a subsidiary of CEG, and its wholly-owned subsidiaries | ||||
| Company | Clearway Energy, Inc., together with its consolidated subsidiaries | ||||
| CVSR | California Valley Solar Ranch | ||||
| Distributed Solar | Solar power facilities, typically less than 20 MW in size (on an alternating current, or AC, basis), that primarily sell power produced to customers for usage on site, or are interconnected to sell power into the local distribution grid | ||||
| Drop Down Assets | Assets under common control acquired by the Company from CEG | ||||
| DSPP | Direct Stock Purchase Plan | ||||
4
| ERCOT | Electric Reliability Council of Texas, the ISO and the regional reliability coordinator of the various electricity systems within Texas | ||||
| Exchange Act | The Securities Exchange Act of 1934, as amended | ||||
| FASB | Financial Accounting Standards Board | ||||
| GAAP | Accounting principles generally accepted in the U.S. | ||||
| GenConn | GenConn Energy LLC | ||||
| GW | Gigawatt | ||||
| HLBV | Hypothetical Liquidation at Book Value | ||||
| Honeycomb Portfolio | Four BESS facilities under construction in Beaver County and Iron County, Utah, collectively representing 320 MW of capacity, which includes Enterprise, Escalante I, Granite Mountain East and Iron Springs that are co-located with the respective solar facilities | ||||
| Honeycomb TargetCo | Honeycomb TargetCo LLC, the indirect owner of the Honeycomb Portfolio | ||||
| IRS | Internal Revenue Service | ||||
| ISO | Independent System Operator, also referred to as an RTO | ||||
| ITC | Investment Tax Credit | ||||
| MMBtu | Million British Thermal Units | ||||
| MW | Megawatt | ||||
| MWh | Saleable megawatt hours, net of internal/parasitic load megawatt-hours | ||||
| Net Exposure | Counterparty credit exposure to Clearway Energy, Inc., net of collateral | ||||
| NOLs | Net Operating Losses | ||||
| NYSE | New York Stock Exchange | ||||
| OCI/OCL | Other comprehensive income/loss | ||||
| O&M | Operations and Maintenance | ||||
| Palisade Plains Partnership | Palisade Plains Development Partnership LLC, the indirect owner of Goat Mountain | ||||
| PG&E | Pacific Gas and Electric Company | ||||
| Pine Forest TE Class A | Pine Forest TE Class A Owner LLC, a consolidated subsidiary of Clearway Energy Finance Inc. and an indirect subsidiary of the Company | ||||
| PPA | Power Purchase Agreement | ||||
| PTC | Production Tax Credit | ||||
| RENOM | Clearway Renewable Operation & Maintenance LLC, a wholly-owned subsidiary of CEG | ||||
| RTO | Regional Transmission Organization | ||||
| SCE | Southern California Edison | ||||
| SDG&E | San Diego Gas & Electric | ||||
| SEC | U.S. Securities and Exchange Commission | ||||
| Senior Notes | Collectively, the 2028 Senior Notes, the 2031 Senior Notes, the 2032 Senior Notes and the 2034 Senior Notes | ||||
| SOFR | Secured Overnight Financing Rate | ||||
| SPP | Solar Power Partners | ||||
| SREC | Solar Renewable Energy Credit | ||||
| U.S. | United States of America | ||||
| Utility Scale Solar | Solar power facilities, typically 20 MW or greater in size (on an alternating current, or AC, basis), that are interconnected into the transmission or distribution grid to sell power at a wholesale level | ||||
| VIE | Variable Interest Entity | ||||
5
PART I — FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS
CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Operating Revenues | |||||||||||||||||||||||
| Total operating revenues | $ | 481 | $ | 392 | $ | 835 | $ | 690 | |||||||||||||||
| Operating Costs and Expenses | |||||||||||||||||||||||
| Cost of operations, exclusive of depreciation, amortization and accretion shown separately below | 149 | 131 | 283 | 253 | |||||||||||||||||||
| Depreciation, amortization and accretion | 196 | 163 | 378 | 326 | |||||||||||||||||||
| General and administrative | 15 | 11 | 26 | 21 | |||||||||||||||||||
| Transaction and integration costs | 5 | 2 | 12 | 5 | |||||||||||||||||||
| Total operating costs and expenses | 365 | 307 | 699 | 605 | |||||||||||||||||||
| Operating Income | 116 | 85 | 136 | 85 | |||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | 11 | 7 | 16 | 12 | |||||||||||||||||||
| Other income, net | 8 | 8 | 16 | 15 | |||||||||||||||||||
| Loss on debt extinguishment | (3) | — | (5) | — | |||||||||||||||||||
| Interest expense | (105) | (83) | (206) | (199) | |||||||||||||||||||
| Total other expense, net | (89) | (68) | (179) | (172) | |||||||||||||||||||
| Income (Loss) Before Income Taxes | 27 | 17 | (43) | (87) | |||||||||||||||||||
| Income tax (benefit) expense | (3) | 5 | (5) | 5 | |||||||||||||||||||
| Net Income (Loss) | 30 | 12 | (38) | (92) | |||||||||||||||||||
| Less: Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | (92) | (18) | 3 | (119) | |||||||||||||||||||
Net Income (Loss) Attributable to Clearway Energy, Inc. | $ | 122 | $ | 30 | $ | (41) | $ | 27 | |||||||||||||||
| Earnings (Loss) Per Share Attributable to Clearway Energy, Inc. Class A and Class C Common Stockholders | |||||||||||||||||||||||
Weighted average number of Class A common shares outstanding - basic and diluted | 11 | 35 | 23 | 35 | |||||||||||||||||||
Weighted average number of Class C common shares outstanding - basic and diluted | 110 | 83 | 98 | 83 | |||||||||||||||||||
| Earnings (Loss) Per Weighted Average Class A and Class C Common Share - Basic and Diluted | $ | 1.00 | $ | 0.25 | $ | (0.34) | $ | 0.23 | |||||||||||||||
| Dividends Per Class A Common Share | $ | — | $ | 0.4384 | $ | 0.4602 | $ | 0.8696 | |||||||||||||||
| Dividends Per Class C Common Share | $ | 0.4676 | $ | 0.4384 | $ | 0.9278 | $ | 0.8696 | |||||||||||||||
See accompanying notes to consolidated financial statements.
6
CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net Income (Loss) | $ | 30 | $ | 12 | $ | (38) | $ | (92) | |||||||||||||||
| Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Unrealized gain (loss) on derivatives and changes in accumulated OCI/OCL, net of income tax (expense) benefit of $(3), $4, $(4) and $5 | 19 | (13) | 29 | (18) | |||||||||||||||||||
| Other comprehensive income (loss) | 19 | (13) | 29 | (18) | |||||||||||||||||||
| Comprehensive Income (Loss) | 49 | (1) | (9) | (110) | |||||||||||||||||||
| Less: Comprehensive (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | (82) | (27) | 18 | (131) | |||||||||||||||||||
| Comprehensive Income (Loss) Attributable to Clearway Energy, Inc. | $ | 131 | $ | 26 | $ | (27) | $ | 21 | |||||||||||||||
See accompanying notes to consolidated financial statements.
7
CLEARWAY ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
See accompanying notes to consolidated financial statements.
8
CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six months ended June 30, | |||||||||||
| (In millions) | 2026 | 2025 | |||||||||
| Cash Flows from Operating Activities | |||||||||||
| Net Loss | $ | (38) | $ | (92) | |||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Equity in earnings of unconsolidated affiliates | (16) | (12) | |||||||||
| Distributions from unconsolidated affiliates | 15 | 13 | |||||||||
| Depreciation, amortization and accretion | 378 | 326 | |||||||||
| Amortization of financing costs and debt discounts | 9 | 7 | |||||||||
| Amortization of intangibles and out-of-market contracts | 101 | 88 | |||||||||
| Loss on debt extinguishment | 5 | — | |||||||||
| Reduction in carrying amount of right-of-use assets | 8 | 8 | |||||||||
| Changes in deferred income taxes | (2) | 2 | |||||||||
| Changes in derivative instruments and amortization of accumulated OCI/OCL | (53) | 22 | |||||||||
| Proceeds from transferable tax credits | 282 | — | |||||||||
| Changes in other working capital | (74) | (76) | |||||||||
| Net Cash Provided by Operating Activities | 615 | 286 | |||||||||
| Cash Flows from Investing Activities | |||||||||||
| Acquisitions, net of cash acquired | (226) | (211) | |||||||||
| Acquisition of Drop Down Assets, net of cash acquired | (81) | (77) | |||||||||
| Capital expenditures | (159) | (132) | |||||||||
| Payments for equipment deposits and asset purchases from affiliate | (112) | — | |||||||||
| Return of investment from unconsolidated affiliates | 8 | 10 | |||||||||
| Investments in unconsolidated affiliates | (91) | — | |||||||||
| Other | 4 | 12 | |||||||||
| Net Cash Used in Investing Activities | (657) | (398) | |||||||||
| Cash Flows from Financing Activities | |||||||||||
| (Distributions to) contributions from noncontrolling interests, net | (119) | 380 | |||||||||
| Proceeds from the issuance of Class C common stock | 50 | — | |||||||||
| Payments of dividends and distributions | (190) | (176) | |||||||||
| Pro-rata distributions to CEG | — | (7) | |||||||||
| Buyout of noncontrolling interest | (3) | — | |||||||||
| Proceeds from the revolving credit facility | 60 | 112 | |||||||||
| Payments for the revolving credit facility | (361) | — | |||||||||
| Proceeds from the issuance of long-term debt | 1,006 | 362 | |||||||||
| Payments of debt issuance costs | (27) | (7) | |||||||||
| Payments for long-term debt | (647) | (498) | |||||||||
| Other | (2) | (1) | |||||||||
| Net Cash (Used in) Provided by Financing Activities | (233) | 165 | |||||||||
| Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | (275) | 53 | |||||||||
| Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 818 | 733 | |||||||||
| Cash, Cash Equivalents and Restricted Cash at End of Period | $ | 543 | $ | 786 | |||||||
See accompanying notes to consolidated financial statements.
9
CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Six Months Ended June 30, 2026
(Unaudited)
| (In millions) | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive (Loss) Income | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||
| Balances at December 31, 2025 | $ | — | $ | 1 | $ | 1,715 | $ | 213 | $ | (5) | $ | 3,887 | $ | 5,811 | |||||||||||||||||||||||||||
| Net (loss) income | — | — | — | (163) | — | 133 | (30) | ||||||||||||||||||||||||||||||||||
| Unrealized gain on derivatives and changes in accumulated OCL, net of tax | — | — | — | — | 5 | 5 | 10 | ||||||||||||||||||||||||||||||||||
| Distributions to CEG, net of contributions, cash | — | — | — | — | — | (64) | (64) | ||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests, net of contributions, cash | — | — | — | — | — | (178) | (178) | ||||||||||||||||||||||||||||||||||
| Transfers of assets under common control | — | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||
| Cardinal Portfolio acquisition | — | — | — | — | — | 2 | 2 | ||||||||||||||||||||||||||||||||||
| Buyout of noncontrolling interest | — | — | 2 | — | — | (5) | (3) | ||||||||||||||||||||||||||||||||||
| Proceeds from the issuance of Class C common stock | — | — | 50 | — | — | — | 50 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||||||
| Common stock dividends and distributions to CEG unit holders | — | — | — | (56) | — | (39) | (95) | ||||||||||||||||||||||||||||||||||
| Balances at March 31, 2026 | — | 1 | 1,768 | (6) | — | 3,740 | 5,503 | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | 122 | — | 100 | 222 | ||||||||||||||||||||||||||||||||||
| Unrealized gain on derivatives and changes in accumulated OCI, net of tax | — | — | — | — | 9 | 10 | 19 | ||||||||||||||||||||||||||||||||||
| Distributions to CEG, net of contributions, cash | — | — | — | — | — | (62) | (62) | ||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests, net of contributions, cash | — | — | — | — | — | (45) | (45) | ||||||||||||||||||||||||||||||||||
| Transfers of assets under common control | — | — | — | — | — | (81) | (81) | ||||||||||||||||||||||||||||||||||
| Non-cash adjustments for change in tax basis | — | — | 12 | — | — | — | 12 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 2 | (1) | — | — | 1 | ||||||||||||||||||||||||||||||||||
| Common stock dividends and distributions to CEG unit holders | — | — | (52) | (4) | — | (39) | (95) | ||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||
| Balances at June 30, 2026 | $ | — | $ | 1 | $ | 1,730 | $ | 111 | $ | 9 | $ | 3,622 | $ | 5,473 | |||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
10
CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Six Months Ended June 30, 2025
(Unaudited)
| (In millions) | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||
| Balances at December 31, 2024 | $ | — | $ | 1 | $ | 1,805 | $ | 254 | $ | 3 | $ | 3,501 | $ | 5,564 | |||||||||||||||||||||||||||
| Net loss | — | — | — | (3) | — | (101) | (104) | ||||||||||||||||||||||||||||||||||
| Unrealized loss on derivatives and changes in accumulated OCI, net of tax | — | — | — | — | (2) | (3) | (5) | ||||||||||||||||||||||||||||||||||
| Distributions to CEG, net of contributions, cash | — | — | — | — | — | (2) | (2) | ||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests, net of distributions, cash | — | — | — | — | — | 51 | 51 | ||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests, non-cash | — | — | — | — | — | (4) | (4) | ||||||||||||||||||||||||||||||||||
| Transfers of assets under common control | — | — | (89) | — | (1) | 79 | (11) | ||||||||||||||||||||||||||||||||||
| Non-cash adjustments for change in tax basis | — | — | 18 | — | — | — | 18 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||||||
| Common stock dividends and distributions to CEG unit holders | — | — | — | (51) | — | (36) | (87) | ||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||
| Balances at March 31, 2025 | — | 1 | 1,735 | 200 | — | 3,484 | 5,420 | ||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | 30 | — | (12) | 18 | ||||||||||||||||||||||||||||||||||
| Unrealized gain on derivatives and changes in accumulated OCI, net of tax | — | — | — | — | (4) | (9) | (13) | ||||||||||||||||||||||||||||||||||
| Contributions from CEG, net of distributions, cash | — | — | — | — | — | 46 | 46 | ||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interest, net of distributions, cash | — | — | — | — | — | 238 | 238 | ||||||||||||||||||||||||||||||||||
| Distributions to CEG, net of contributions, cash | — | — | — | — | — | (7) | (7) | ||||||||||||||||||||||||||||||||||
| Transfers of assets under common control | — | — | (93) | — | (6) | (8) | (107) | ||||||||||||||||||||||||||||||||||
| Non-cash adjustments for change in tax basis | — | — | 27 | — | — | — | 27 | ||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | 1 | — | — | — | 1 | ||||||||||||||||||||||||||||||||||
| Common stock dividends and distributions to CEG unit holders | — | — | — | (51) | — | (38) | (89) | ||||||||||||||||||||||||||||||||||
| Other | — | — | — | (1) | — | 2 | 1 | ||||||||||||||||||||||||||||||||||
| Balances at June 30, 2025 | $ | — | $ | 1 | $ | 1,670 | $ | 178 | $ | (10) | $ | 3,696 | $ | 5,535 | |||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
11
CLEARWAY ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 — Nature of Business
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.
The Company is one of the largest owners of clean energy generation assets in the U.S. The Company’s portfolio comprises approximately 13.9 GW of gross capacity in 27 states, including approximately 11.1 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 Company consolidates the results of Clearway Energy LLC through its controlling interest, with CEG’s interest shown as noncontrolling interest in the consolidated financial statements. The holders of the Company’s outstanding shares of Class C common stock are entitled to dividends as declared. CEG receives its distributions from Clearway Energy LLC through its ownership of Clearway Energy LLC Class B and Class D units. From time to time, CEG may also hold shares of the Company’s Class C common stock.
As of June 30, 2026, the Company owned 59.03% of the economic interests of Clearway Energy LLC, with CEG owning 40.97% of the economic interests of Clearway Energy LLC.
The diagram below represents a summarized structure of the Company as of June 30, 2026:
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Class A Conversion
On April 29, 2026, at the Company’s Annual Meeting of Stockholders, the Company’s stockholders approved a Second Amended and Restated Certificate of Incorporation, or the Amended Charter, pursuant to which each outstanding share of the Company’s Class A common stock was converted into one share of the Company’s Class C common stock, effective May 1, 2026, referred to as the Class A Conversion. Accordingly, the Company no longer has any Class A common stock outstanding. See Note 9, Changes in Capital Structure, for further discussion of the Class A Conversion.
Basis of Presentation
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the SEC’s regulations for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Certain prior period financial information included in these unaudited interim consolidated financial statements has been revised to correct immaterial errors. See Note 13, Revision of Previously Issued Unaudited Financial Information, for additional information.
The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to the consolidated financial statements included in the Company’s 2025 Form 10-K. Interim results are not necessarily indicative of results for a full year.
In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all material adjustments consisting of normal and recurring accruals necessary for a fair statement of the Company’s consolidated financial position as of June 30, 2026 and December 31, 2025, and results of operations, comprehensive income (loss) and cash flows for the three and six months ended June 30, 2026 and 2025.
Note 2 — Summary of Significant Accounting Policies
Use of Estimates
The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amounts of net earnings during the reporting periods. Actual results could be different from these estimates.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents include highly liquid investments with an original maturity of three months or less at the time of purchase. Cash and cash equivalents held at subsidiary facilities was $247 million and $194 million as of June 30, 2026 and December 31, 2025, respectively.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:
| June 30, 2026 | December 31, 2025 | ||||||||||
| (In millions) | |||||||||||
| Cash and cash equivalents | $ | 251 | $ | 231 | |||||||
| Restricted cash | 292 | 587 | |||||||||
| Cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows | $ | 543 | $ | 818 | |||||||
Restricted cash consists primarily of funds held to satisfy the requirements of certain debt agreements and funds held within the Company’s facilities that are restricted in their use. As of June 30, 2026, these restricted funds were comprised of $130 million designated to fund operating expenses, $40 million designated for current debt service payments and $90 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. In January 2026, the Company distributed $174 million to the tax equity investor in Rosie South TE Holdco LLC related to transferable ITCs for the Rosamond South I solar and BESS facility that were included in restricted cash as of December 31, 2025.
13
Accumulated Depreciation and Accumulated Amortization
The following table presents the accumulated depreciation included in property, plant and equipment, net, and accumulated amortization included in intangible assets for power purchase agreements, net and other intangible assets, net:
| June 30, 2026 | December 31, 2025 | ||||||||||
| (In millions) | |||||||||||
| Property, Plant and Equipment Accumulated Depreciation | $ | 5,030 | $ | 4,673 | |||||||
| Intangible Assets Accumulated Amortization | 1,485 | 1,382 | |||||||||
Redeemable Noncontrolling Interests
To the extent that a third party has the right to redeem their interests for cash or other assets, the Company has included the noncontrolling interest attributable to the third party as a component of temporary equity in the mezzanine section of the consolidated balance sheet. The following table reflects the changes in the Company’s redeemable noncontrolling interest balance:
| (In millions) | ||||||||
| Balance at December 31, 2025 | $ | 103 | ||||||
| Cash contributions from redeemable noncontrolling interests, net of distributions | 245 | |||||||
| Non-cash contribution from redeemable noncontrolling interests | 6 | |||||||
| Comprehensive loss attributable to redeemable noncontrolling interests | (230) | |||||||
| Balance at June 30, 2026 | $ | 124 | ||||||
Revenue Recognition
Disaggregated Revenues
The following tables represent the Company’s disaggregation of revenue from contracts with customers along with the reportable segment for each category:
| Three months ended June 30, 2026 | |||||||||||||||||
| (In millions) | Flexible Generation | Renewables & Storage | Total | ||||||||||||||
Energy revenue (a) | $ | 8 | $ | 389 | $ | 397 | |||||||||||
Capacity revenue (a) | 66 | 42 | 108 | ||||||||||||||
| Other revenues | — | 25 | 25 | ||||||||||||||
| Contract amortization | (4) | (47) | (51) | ||||||||||||||
| Mark-to-market for economic hedges | 16 | (14) | 2 | ||||||||||||||
| Total operating revenues | 86 | 395 | 481 | ||||||||||||||
| Less: Contract amortization | 4 | 47 | 51 | ||||||||||||||
| Less: Mark-to-market for economic hedges | (16) | 14 | (2) | ||||||||||||||
| (25) | (293) | (318) | |||||||||||||||
Total revenue from contracts with customers | $ | 49 | $ | 163 | $ | 212 | |||||||||||
(a) The following amounts of energy and capacity revenues relate to leases and are accounted for under ASC 842:
| (In millions) | Flexible Generation | Renewables & Storage | Total | ||||||||||||||
| Energy revenue | $ | — | $ | 258 | $ | 258 | |||||||||||
| Capacity revenue | 25 | 35 | 60 | ||||||||||||||
Total | $ | 25 | $ | 293 | $ | 318 | |||||||||||
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| Three months ended June 30, 2025 | |||||||||||||||||
| (In millions) | Flexible Generation | Renewables & Storage | Total | ||||||||||||||
Energy revenue (a) | $ | 5 | $ | 333 | $ | 338 | |||||||||||
Capacity revenue (a) | 68 | 22 | 90 | ||||||||||||||
| Other revenues | 1 | 21 | 22 | ||||||||||||||
| Contract amortization | (4) | (41) | (45) | ||||||||||||||
| Mark-to-market for economic hedges | (20) | 7 | (13) | ||||||||||||||
| Total operating revenues | 50 | 342 | 392 | ||||||||||||||
| Less: Contract amortization | 4 | 41 | 45 | ||||||||||||||
| Less: Mark-to-market for economic hedges | 20 | (7) | 13 | ||||||||||||||
| (29) | (244) | (273) | |||||||||||||||
Total revenue from contracts with customers | $ | 45 | $ | 132 | $ | 177 | |||||||||||
(a) The following amounts of energy and capacity revenues relate to leases and are accounted for under ASC 842:
| (In millions) | Flexible Generation | Renewables & Storage | Total | ||||||||||||||
| Energy revenue | $ | — | $ | 232 | $ | 232 | |||||||||||
| Capacity revenue | 29 | 12 | 41 | ||||||||||||||
Total | $ | 29 | $ | 244 | $ | 273 | |||||||||||
| Six months ended June 30, 2026 | |||||||||||||||||
| (In millions) | Flexible Generation | Renewables & Storage | Total | ||||||||||||||
Energy revenue (a) | $ | 15 | $ | 643 | $ | 658 | |||||||||||
Capacity revenue (a) | 131 | 74 | 205 | ||||||||||||||
| Other revenues | 1 | 40 | 41 | ||||||||||||||
| Contract amortization | (9) | (92) | (101) | ||||||||||||||
| Mark-to-market for economic hedges | 9 | 23 | 32 | ||||||||||||||
| Total operating revenues | 147 | 688 | 835 | ||||||||||||||
| Less: Contract amortization | 9 | 92 | 101 | ||||||||||||||
| Less: Mark-to-market for economic hedges | (9) | (23) | (32) | ||||||||||||||
| (54) | (472) | (526) | |||||||||||||||
Total revenue from contracts with customers | $ | 93 | $ | 285 | $ | 378 | |||||||||||
(a) The following amounts of energy and capacity revenues relate to leases and are accounted for under ASC 842:
| (In millions) | Flexible Generation | Renewables & Storage | Total | ||||||||||||||
| Energy revenue | $ | 1 | $ | 413 | $ | 414 | |||||||||||
| Capacity revenue | 53 | 59 | 112 | ||||||||||||||
Total | $ | 54 | $ | 472 | $ | 526 | |||||||||||
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| Six months ended June 30, 2025 | |||||||||||||||||
| (In millions) | Flexible Generation | Renewables & Storage | Total | ||||||||||||||
Energy revenue (a) | $ | 11 | $ | 575 | $ | 586 | |||||||||||
Capacity revenue (a) | 132 | 43 | 175 | ||||||||||||||
| Other revenues | 2 | 40 | 42 | ||||||||||||||
| Contract amortization | (9) | (80) | (89) | ||||||||||||||
| Mark-to-market for economic hedges | (18) | (6) | (24) | ||||||||||||||
| Total operating revenues | 118 | 572 | 690 | ||||||||||||||
| Less: Contract amortization | 9 | 80 | 89 | ||||||||||||||
| Less: Mark-to-market for economic hedges | 18 | 6 | 24 | ||||||||||||||
| (58) | (425) | (483) | |||||||||||||||
Total revenue from contracts with customers | $ | 87 | $ | 233 | $ | 320 | |||||||||||
(a) The following amounts of energy and capacity revenues relate to leases and are accounted for under ASC 842:
| (In millions) | Flexible Generation | Renewables & Storage | Total | ||||||||||||||
| Energy revenue | $ | 1 | $ | 400 | $ | 401 | |||||||||||
| Capacity revenue | 57 | 25 | 82 | ||||||||||||||
Total | $ | 58 | $ | 425 | $ | 483 | |||||||||||
Contract Balances
The following table reflects the contract assets included on the Company’s consolidated balance sheets:
| June 30, 2026 | December 31, 2025 | ||||||||||
| (In millions) | |||||||||||
| Accounts receivable, net - Contracts with customers | $ | 141 | $ | 76 | |||||||
| Accounts receivable, net - Leases | 155 | 86 | |||||||||
| Total accounts receivable, net | $ | 296 | $ | 162 | |||||||
Recently Adopted Accounting Standards
Effective January 1, 2026, the Company adopted ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendment clarifies when software costs should be capitalized and requires certain disclosures for all capitalized internal-use software costs. The Company adopted ASU 2025-06 prospectively and the adoption had no material impact on the Company’s financial statements.
Effective January 1, 2026, the Company adopted ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The amendment expands the derivative scope exceptions and clarifies when an entity should apply the guidance in ASC 606, Revenue from Contracts with Customers, to contracts with share-based noncash consideration from a customer for the transfer of goods or services. The Company adopted ASU 2025-07 prospectively, and the adoption had no material impact on the Company’s financial statements.
Recent Accounting Standards Not Yet Adopted
In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), which establishes guidance for the recognition, measurement, presentation and disclosure of environmental credits and environmental credit obligations. The guidance is effective for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual periods. The amendment must be applied retrospectively through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption. Early adoption is permitted. As of June 30, 2026, the Company has not elected to early adopt the standard and is evaluating the effect of the new guidance on its consolidated financial statements.
16
Note 3 — Acquisitions
Cardinal Portfolio Acquisition — On March 30, 2026, the Company, through its indirect subsidiaries, Cardinal Purchaser LLC and Cardinal JV Purchaser LLC, completed the acquisition of the Cardinal Portfolio, a 610 MW portfolio of operational solar facilities located in eight states, for net cash consideration of $322 million, which includes post-closing adjustments of $2 million. Of the net consideration, $242 million related to facilities consolidated by the Company and $80 million related to facilities held through a joint venture with a third-party investor. The joint venture includes 12 facilities located in the western U.S., comprising 225 MW. The Company’s investment in the joint venture is accounted for under the equity method, as further described in Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities. The Cardinal Portfolio has a weighted average remaining contract duration of approximately 10 years. The Cardinal Portfolio is reflected in the Renewables & Storage segment and the acquisition was funded with $100 million in borrowings under the new financing arrangement entered into in connection with the acquisition, as further described in Note 7, Long-term Debt, as well as existing sources of liquidity. After factoring in cash acquired, transaction expenses and proceeds from the related financing activities, the Company estimates its net capital investment in the Cardinal Portfolio will be approximately $240 million.
The Company accounted for the consolidated group of facilities acquired by Cardinal Purchaser LLC as a business combination under ASC 805, Business Combinations, or ASC 805. The following table presents the preliminary fair value estimates of the assets acquired and liabilities assumed by Cardinal Purchaser LLC as of the acquisition date:
| (In millions) | Cardinal Portfolio (a) | |||||||
| Cash | $ | 1 | ||||||
| Restricted cash | 15 | |||||||
| Property, plant and equipment | 314 | |||||||
| Intangible assets for power purchase agreements | 128 | |||||||
| Right-of-use assets | 62 | |||||||
| Derivative assets | 6 | |||||||
| Other current and non-current assets | 24 | |||||||
| Total assets acquired | 550 | |||||||
Long-term debt (b) | 180 | |||||||
| Long-term lease liabilities | 39 | |||||||
| Other current liabilities | 3 | |||||||
| Other non-current liabilities | 84 | |||||||
| Total liabilities assumed | 306 | |||||||
Noncontrolling interest (c) | 2 | |||||||
| Net assets acquired | $ | 242 | ||||||
(a) Excludes the equity method investment held by Cardinal JV Purchaser LLC.
(b) See Note 7, Long-term Debt, for additional information regarding the assumed facility-level debt.
(c) Represents a tax equity fund, Shoreham Energy Holdings, LLC, which the Company consolidates as primary beneficiary. The Class A membership interests in Shoreham Energy Holdings, LLC are held by a tax equity investor.
In accordance with ASC 805, the assets acquired and liabilities assumed have been measured at fair value as of the acquisition date. The fair value of property, plant and equipment was determined primarily based on the income approach using discounted cash flows. This methodology was utilized as the forecasted cash flows incorporate specific attributes including age, useful life, equipment condition and technology. The fair value of intangible assets and liabilities for power purchase agreements was determined utilizing a variation of the income approach determined by discounting the replacement market price of the incremental cash flows associated with the contracts to present value. Intangible liabilities for power purchase agreements are included in other non-current liabilities. Primary assumptions utilized included estimates of generation, contractual prices, operating expenses and the weighted average cost of capital reflective of a market participant. These assumptions are considered to be a Level 3 measurement as defined in ASC 820, Fair Value Measurement, as they utilize inputs that are not observable in the market. Long-term debt assumed as part of the acquisition was recorded at its estimated fair value as of the acquisition date.
17
The fair value measurement of the acquired assets, assumed liabilities and noncontrolling interests above remain preliminary. The Company expects to finalize the fair value estimates within the measurement period, which will not exceed one year from the acquisition date.
For the period from March 30, 2026 through June 30, 2026, the consolidated facilities contributed operating revenues of $22 million and net income of $7 million to the Company’s consolidated results.
The following unaudited pro forma financial information presents the consolidated results of operations of the Company as if the business combination had occurred on January 1, 2025:
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Operating revenues | $ | 481 | $ | 409 | $ | 846 | $ | 722 | ||||||||||||||||||
| Net income (loss) | 30 | 13 | (44) | (93) | ||||||||||||||||||||||
The pro forma information includes adjustments to reflect the Company’s accounting policies and the impact of fair value adjustments to the consolidated facilities’ property, plant, and equipment, intangible assets and long-term debt, including related income tax effects.
Note 4 — Investments Accounted for by the Equity Method and Variable Interest Entities
Entities that are not Consolidated
The Company has interests in entities that are considered VIEs under ASC 810, but for which it is not considered the primary beneficiary. The Company accounts for its interests in these entities and entities in which it has a significant investment under the equity method of accounting, as further described under Item 15 — Note 5, Investments Accounted for by the Equity Method and Variable Interest Entities, to the consolidated financial statements included in the Company’s 2025 Form 10-K.
The following table reflects the Company’s equity investments in unconsolidated affiliates as of June 30, 2026:
| Name | Economic Interest | Investment Balance (a) | ||||||||||||
| (In millions) | ||||||||||||||
| Avenal | 50% | $ | 14 | |||||||||||
Cardinal Portfolio JV (b) | 50% | 92 | ||||||||||||
| Desert Sunlight | 25% | 209 | ||||||||||||
| Elkhorn Ridge | 66.7% | (6) | ||||||||||||
GenConn (c) | 50% | 70 | ||||||||||||
| San Juan Mesa | 75% | (4) | ||||||||||||
| $ | 375 | |||||||||||||
(a) The Company’s maximum exposure to loss is limited to its investment balances.
(b) Acquired on March 30, 2026. See Note 3, Acquisitions, for further discussion.
(c) GenConn is a VIE.
The Company’s pro-rata share of non-recourse debt held by unconsolidated affiliates was $351 million as of June 30, 2026.
18
Entities that are Consolidated
As further described under Item 15 — Note 5, Investments Accounted for by the Equity Method and Variable Interest Entities, to the consolidated financial statements included in the Company’s 2025 Form 10-K, the Company has a controlling financial interest in certain entities which have been identified as VIEs under ASC 810, Consolidation, or ASC 810. These arrangements are primarily related to tax equity arrangements entered into with third parties in order to monetize certain tax credits associated with wind, solar and BESS facilities. The Company also has a controlling financial interest in certain partnership arrangements with third-party investors, which also have been identified as VIEs. Under the Company’s arrangements that have been identified as VIEs, the third-party investors are allocated earnings, tax attributes and distributable cash in accordance with the respective limited liability company agreements. Many of these arrangements also provide a mechanism to facilitate achievement of the investor’s specified return by providing incremental cash distributions to the investor at a specified date if the specified return has not yet been achieved.
The following is a summary of significant activity during the six months ended June 30, 2026 related to the Company’s consolidated VIEs:
Palisade Plains Partnership — On February 19, 2026, Clearway Renew contributed its rights and interests in certain transformer supply agreements to Palisade Plains Development Partnership LLC, or Palisade Plains Partnership, an indirect subsidiary of the Company, in exchange for Class A membership interests. In connection with the transaction, Clearway Renew contributed $6 million for deposits related to the future delivery of equipment, which is included in other non-current assets on the Company’s consolidated balance sheet, and received a distribution of $5 million. The Class A membership interests held by Clearway Renew are reflected as redeemable noncontrolling interest on the Company’s consolidated balance sheet, as the arrangement provides Clearway Renew with the right to redeem their interests in the partnership for cash or other assets at a point in time. As of June 30, 2026, the redeemable noncontrolling interest balance associated with Clearway Renew’s Class A membership interests in the Palisade Plains Partnership was $1 million. Palisade Plains Partnership is a VIE that indirectly owns the Goat Mountain wind facility and whose purpose is to carry out the development, construction and completion of the repowering of the facility. Palisade Plains Development Partnership Holdco LLC, an indirect subsidiary of the Company, consolidates Palisade Plains Partnership as primary beneficiary through its Class B membership interests, which entitles the Company to 99% of distributable cash.
Summarized financial information for the Company’s consolidated VIEs consisted of the following:
| (In millions) | June 30, 2026 | December 31, 2025 | |||||||||
| Other current assets | $ | 309 | $ | 484 | |||||||
| Property, plant and equipment | 7,849 | 7,894 | |||||||||
| Other non-current assets | 727 | 547 | |||||||||
| Total assets | $ | 8,885 | $ | 8,925 | |||||||
| Other current liabilities | $ | 180 | $ | 241 | |||||||
| Other non-current liabilities | 2,145 | 2,353 | |||||||||
| Total liabilities | $ | 2,325 | $ | 2,594 | |||||||
Note 5 — Fair Value of Financial Instruments
Fair Value Accounting under ASC 820
ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
•Level 1—quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.
•Level 2—inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
•Level 3—unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date.
In accordance with ASC 820, the Company determines the level in the fair value hierarchy within which each fair value measurement in its entirety falls, based on the lowest level input that is significant to the fair value measurement.
19
For cash and cash equivalents, restricted cash, accounts receivable — trade, accounts receivable — affiliates, accounts payable — trade, accounts payable — affiliates and accrued expenses and other current liabilities, the carrying amounts approximate fair value because of the short-term maturity of those instruments.
The carrying amount and estimated fair value of the Company’s recorded financial instrument not carried at fair market value or that does not approximate fair value is as follows:
| As of June 30, 2026 | As of December 31, 2025 | ||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
Long-term debt, including current portion (a) | $ | 9,141 | $ | 8,787 | $ | 8,676 | $ | 8,382 | |||||||||||||||
(a) Excludes net debt issuance costs, which are recorded as a reduction to long-term debt on the Company’s consolidated balance sheets.
The fair value of the Company’s publicly-traded long-term debt is based on quoted market prices and is classified as Level 2 within the fair value hierarchy. The fair value of debt securities, non-publicly traded long-term debt and certain notes receivable of the Company are based on expected future cash flows discounted at market interest rates, or current interest rates for similar instruments with equivalent credit quality and are classified as Level 3 within the fair value hierarchy. The following table presents the level within the fair value hierarchy for long-term debt, including current portion:
| As of June 30, 2026 | As of December 31, 2025 | ||||||||||||||||||||||
| Level 2 | Level 3 | Level 2 | Level 3 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
Long-term debt, including current portion | $ | 2,607 | $ | 6,180 | $ | 2,032 | $ | 6,350 | |||||||||||||||
Recurring Fair Value Measurements
The Company records its derivative assets and liabilities at fair market value on its consolidated balance sheets. The following table presents assets and liabilities measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis and their level within the fair value hierarchy:
| As of June 30, 2026 | As of December 31, 2025 | ||||||||||||||||||||||
Fair Value (a) | Fair Value (a) | ||||||||||||||||||||||
| (In millions) | Level 2 (b) | Level 3 | Level 2 (b) | Level 3 | |||||||||||||||||||
| Derivative assets: | |||||||||||||||||||||||
Energy-related commodity contracts (c) | $ | — | $ | 20 | $ | 1 | $ | 13 | |||||||||||||||
| Interest rate contracts | 173 | — | 142 | — | |||||||||||||||||||
Other financial instruments (d) | — | 4 | — | 7 | |||||||||||||||||||
| Total assets | $ | 173 | $ | 24 | $ | 143 | $ | 20 | |||||||||||||||
| Derivative liabilities: | |||||||||||||||||||||||
Energy-related commodity contracts (e) | $ | — | $ | 82 | $ | — | $ | 333 | |||||||||||||||
| Interest rate contracts | 11 | — | 27 | — | |||||||||||||||||||
| Total liabilities | $ | 11 | $ | 82 | $ | 27 | $ | 333 | |||||||||||||||
(a) There were no derivative assets or liabilities classified as Level 1 as of June 30, 2026 and December 31, 2025.
(b) The Company’s interest rate swaps are measured at fair value using an income approach, which uses readily observable inputs, such as forward interest rates (e.g., SOFR) and contractual terms to estimate fair value.
(c) Includes short-term backbone transportation service contracts classified as Level 2 and heat rate call option commodity contracts classified as Level 3.
(d) Includes SREC contract.
(e) Includes long-term power commodity contracts and heat rate call option commodity contracts classified as Level 3. As of June 30, 2026 and December 31, 2025, $80 million and $330 million, respectively, related to long-term power commodity contracts, and $2 million and $3 million, respectively, related to heat rate call option commodity contracts.
20
The following table reconciles the beginning and ending balances for instruments that are recognized at fair value in the consolidated financial statements using significant unobservable inputs:
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| (In millions) | Fair Value Measurement Using Significant Unobservable Inputs (Level 3) | Fair Value Measurement Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||
| Beginning balance | $ | (168) | $ | (363) | $ | (313) | $ | (352) | ||||||||||||||||||
| Settlements | 8 | 33 | 11 | 40 | ||||||||||||||||||||||
Transfers out of Level 3 (a) | 96 | — | 211 | — | ||||||||||||||||||||||
| 6 | (15) | 33 | (33) | |||||||||||||||||||||||
| Ending balance | $ | (58) | $ | (345) | $ | (58) | $ | (345) | ||||||||||||||||||
Change in unrealized gains included in earnings for derivatives and other financial instruments held as of June 30, 2026 | $ | 6 | $ | 33 | ||||||||||||||||||||||
(a) During 2026, the Company restructured the Mesquite Sky, Langford and Elbow Creek energy-related commodity contracts, resulting in the derecognition of the related derivative liabilities and classification as in-substance financings, as further described in Note 7, Long-term Debt.
Derivative and Financial Instruments Fair Value Measurements
The Company’s contracts are non-exchange-traded and valued using prices provided by external sources. The Company uses quoted observable forward prices to value its energy-related commodity contracts, which includes long-term power commodity contracts and heat rate call option commodity contracts. To the extent that observable forward prices are not available, the quoted prices reflect the average of the forward prices from the prior year, adjusted for inflation. As of June 30, 2026, contracts valued with prices provided by models and other valuation techniques make up 10% of derivative assets, 88% of derivative liabilities and 100% of other financial instruments.
The Company’s significant positions classified as Level 3 relate to physical and financial energy-related contracts, including long-term power commodity contracts and heat rate call option commodity contracts executed in illiquid markets. The significant unobservable inputs used in developing fair value include illiquid power tenors and location pricing, which is derived by extrapolating pricing as a basis to liquid locations. The tenor pricing and basis spread are based on observable market data when available or derived from historic prices and forward market prices from similar observable markets when not available.
The following table quantifies the significant unobservable inputs used in developing the fair value of the Company’s Level 3 positions:
| June 30, 2026 | |||||||||||||||||||||||
| Fair Value | Input/Range | ||||||||||||||||||||||
| Assets | Liabilities | Valuation Technique | Significant Unobservable Input | Low | High | Weighted Average | |||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Long-term Power Commodity Contracts | $ | — | $ | 80 | Discounted Cash Flow | Forward Market Price ($ per MWh) | $ | 31.47 | $ | 79.85 | $ | 48.47 | |||||||||||
| Heat Rate Call Option Commodity Contracts | 20 | 2 | Option Model | Forward Market Price ($ per MWh) | 2.26 | 256.49 | 44.08 | ||||||||||||||||
| Option Model | Forward Market Price ($ per MMBtu) | 2.15 | 9.91 | 2.66 | |||||||||||||||||||
| Other Financial Instruments | 4 | — | Discounted Cash Flow | Forecast annual generation levels of certain DG solar facilities | 57,935 MWh | 115,869 MWh | 97,214 MWh | ||||||||||||||||
21
The following table provides the impact on the fair value measurements to increases/(decreases) in significant unobservable inputs as of June 30, 2026:
| Type | Significant Unobservable Input | Position | Change In Input | Impact on Fair Value Measurement | ||||||||||
| Energy-Related Commodity Contracts | Forward Market Price Power | Sell | Increase/(Decrease) | Lower/(Higher) | ||||||||||
| Energy-Related Commodity Contracts | Forward Market Price Gas | Sell | Increase/(Decrease) | Higher/(Lower) | ||||||||||
| Other Financial Instruments | Forecast Generation Levels | Sell | Increase/(Decrease) | Higher/(Lower) | ||||||||||
The fair value of each contract is discounted using a risk-free interest rate. In addition, a credit reserve is applied to reflect credit risk, which is, for interest rate swaps, calculated based on credit default swaps using the bilateral method. For commodities, to the extent that the Net Exposure under a specific master agreement is an asset, the Company uses the counterparty’s default swap rate. If the Net Exposure under a specific master agreement is a liability, the Company uses a proxy of its own default swap rate. For interest rate swaps and commodities, the credit reserve is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume the liabilities or that a market participant would be willing to pay for the assets. As of June 30, 2026, the non-performance reserve was a $2 million gain recorded primarily to total operating revenues in the consolidated statements of operations. It is possible that future market prices could vary from those used in recording assets and liabilities and such variations could be material.
Concentration of Credit Risk
In addition to the credit risk discussion as disclosed under Item 15 — Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company’s 2025 Form 10-K, the following item is a discussion of the concentration of credit risk for the Company’s financial instruments. Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. The Company monitors and manages credit risk through credit policies that include: (i) an established credit approval process; (ii) monitoring of counterparties’ credit limits on an as needed basis; (iii) as applicable, the use of credit mitigation measures such as margin, collateral, prepayment arrangements, or volumetric limits; (iv) the use of payment netting agreements; and (v) the use of master netting agreements that allow for the netting of positive and negative exposures of various contracts associated with a single counterparty. Risks surrounding counterparty performance and credit could ultimately impact the amount and timing of expected cash flows. The Company seeks to mitigate counterparty risk by having a diversified portfolio of counterparties.
Counterparty credit exposure includes credit risk exposure under certain long-term agreements, including solar and other PPAs. As external sources or observable market quotes are not available to estimate such exposure, the Company estimates the exposure related to these contracts based on various techniques including, but not limited to, internal models based on a fundamental analysis of the market and extrapolation of observable market data with similar characteristics. A significant portion of these energy-related commodity contracts are with utilities with strong credit quality and public utility commission or other regulatory support. However, such regulated utility counterparties can be impacted by changes in government regulations or adverse financial conditions, which the Company is unable to predict. Certain subsidiaries of the Company sell the output of their facilities to PG&E, a significant counterparty of the Company, under long-term PPAs, and PG&E’s credit rating is below investment-grade.
Note 6 — Derivative Instruments and Hedging Activities
Interest Rate Swaps
The Company enters into interest rate swap agreements in order to hedge the variability of expected future cash interest payments that may arise in connection with its non-recourse debt or a potential refinancing of its Senior Notes. As of June 30, 2026, the Company had interest rate derivative instruments extending through 2036, a portion of which were designated as cash flow hedges. Under the interest rate swap agreements, the Company pays a fixed rate and the counterparties to the agreements pay a variable interest rate.
Energy-Related Commodity Contracts
As of June 30, 2026, the Company had energy-related derivative instruments extending through 2032. At June 30, 2026, these contracts were not designated as cash flow or fair value hedges.
22
Volumetric Underlying Derivative Transactions
The following table summarizes the net notional volume buy/(sell) of the Company’s open derivative transactions broken out by commodity:
| Total Volume | |||||||||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||||||||
| Commodity | Units | (In millions) | |||||||||||||||
| Power | MWh | (23) | (29) | ||||||||||||||
| Natural Gas | MMBtu | 2 | 5 | ||||||||||||||
| Interest | Dollars | $ | 3,971 | $ | 4,080 | ||||||||||||
Fair Value of Derivative Instruments
The following table summarizes the fair value within the derivative instrument valuation on the consolidated balance sheets:
| Fair Value | |||||||||||||||||||||||
| Derivative Assets | Derivative Liabilities | ||||||||||||||||||||||
| June 30, 2026 | December 31, 2025 | June 30, 2026 | December 31, 2025 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Derivatives Designated as Cash Flow Hedges: | |||||||||||||||||||||||
| Interest rate contracts current | $ | 9 | $ | 2 | $ | 2 | $ | 6 | |||||||||||||||
| Interest rate contracts long-term | 42 | 29 | 8 | 21 | |||||||||||||||||||
| Total Derivatives Designated as Cash Flow Hedges | $ | 51 | $ | 31 | $ | 10 | $ | 27 | |||||||||||||||
| Derivatives Not Designated as Cash Flow Hedges: | |||||||||||||||||||||||
| Interest rate contracts current | $ | 24 | $ | 17 | $ | — | $ | — | |||||||||||||||
| Interest rate contracts long-term | 98 | 94 | 1 | — | |||||||||||||||||||
| Energy-related commodity contracts current | 14 | 10 | 12 | 46 | |||||||||||||||||||
| Energy-related commodity contracts long-term | 6 | 4 | 70 | 287 | |||||||||||||||||||
| Total Derivatives Not Designated as Cash Flow Hedges | $ | 142 | $ | 125 | $ | 83 | $ | 333 | |||||||||||||||
| Total Derivatives | $ | 193 | $ | 156 | $ | 93 | $ | 360 | |||||||||||||||
The Company has elected to present derivative assets and liabilities on the balance sheet on a trade-by-trade basis and does not offset amounts at the counterparty level. As of June 30, 2026 and December 31, 2025, there was no outstanding collateral paid or received. The following tables summarize the offsetting of derivatives by counterparty:
| Gross Amounts Not Offset in the Statement of Financial Position | |||||||||||||||||
| As of June 30, 2026 | Gross Amounts of Recognized Assets/Liabilities | Derivative Instruments | Net Amount | ||||||||||||||
| Energy-related commodity contracts | (In millions) | ||||||||||||||||
| Derivative assets | $ | 20 | $ | — | $ | 20 | |||||||||||
| Derivative liabilities | (82) | — | (82) | ||||||||||||||
| Total energy-related commodity contracts | $ | (62) | $ | — | $ | (62) | |||||||||||
| Interest rate contracts | |||||||||||||||||
| Derivative assets | $ | 173 | $ | — | $ | 173 | |||||||||||
| Derivative liabilities | (11) | — | (11) | ||||||||||||||
| Total interest rate contracts | $ | 162 | $ | — | $ | 162 | |||||||||||
| Total derivative instruments | $ | 100 | $ | — | $ | 100 | |||||||||||
23
| Gross Amounts Not Offset in the Statement of Financial Position | |||||||||||||||||
| As of December 31, 2025 | Gross Amounts of Recognized Assets/Liabilities | Derivative Instruments | Net Amount | ||||||||||||||
| Energy-related commodity contracts | (In millions) | ||||||||||||||||
| Derivative assets | $ | 14 | $ | — | $ | 14 | |||||||||||
| Derivative liabilities | (333) | — | (333) | ||||||||||||||
| Total energy-related commodity contracts | $ | (319) | $ | — | $ | (319) | |||||||||||
| Interest rate contracts | |||||||||||||||||
| Derivative assets | $ | 142 | $ | — | $ | 142 | |||||||||||
| Derivative liabilities | (27) | — | (27) | ||||||||||||||
| Total interest rate contracts | $ | 115 | $ | — | $ | 115 | |||||||||||
| Total derivative instruments | $ | (204) | $ | — | $ | (204) | |||||||||||
Accumulated Other Comprehensive Income (Loss)
The following table summarizes the effects on the Company’s accumulated OCI (OCL) balance attributable to interest rate swaps designated as cash flow hedge derivatives, net of tax:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Accumulated OCI (OCL) beginning balance | $ | 5 | $ | 5 | $ | (5) | $ | 14 | |||||||||||||||
Rosamond South I Drop Down (a) | — | — | — | (4) | |||||||||||||||||||
Daggett 1 Drop Down (b) | — | (6) | — | (6) | |||||||||||||||||||
Luna Valley Drop Down (c) | — | (8) | — | (8) | |||||||||||||||||||
Pine Forest Drop Down (d) | — | 5 | — | 5 | |||||||||||||||||||
| Reclassified from accumulated OCI/OCL to income due to realization of previously deferred amounts | — | — | 1 | — | |||||||||||||||||||
| Mark-to-market of cash flow hedge accounting contracts | 19 | (13) | 28 | (18) | |||||||||||||||||||
Accumulated OCI (OCL) ending balance, net of income tax of $(3) and $4, respectively | 24 | (17) | 24 | (17) | |||||||||||||||||||
| Accumulated OCI (OCL) attributable to noncontrolling interests | 15 | (7) | 15 | (7) | |||||||||||||||||||
| Accumulated OCI (OCL) attributable to Clearway Energy, Inc. | $ | 9 | $ | (10) | $ | 9 | $ | (10) | |||||||||||||||
Gains expected to be realized from OCI during the next 12 months, net of income tax expense of $(2) | $ | 4 | $ | 4 | |||||||||||||||||||
(a) Represents $1 million attributable to the Company and $3 million attributable to noncontrolling interests.
(b) Represents $4 million attributable to the Company and $2 million attributable to noncontrolling interests.
(c) Represents $5 million attributable to the Company and $3 million attributable to noncontrolling interests.
(d) Represents $3 million attributable to the Company and $2 million attributable to noncontrolling interests.
Amounts reclassified from accumulated OCI/OCL into income are recorded to interest expense.
24
Impact of Derivative Instruments on the Consolidated Statements of Operations
Mark-to-market gains/(losses) related to the Company’s derivatives are recorded in the consolidated statements of operations as follows:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Interest Rate Contracts (Interest expense) | $ | 7 | $ | 2 | $ | 7 | $ | (32) | |||||||||||||||
Energy-Related Commodity Contracts (Mark-to-market for economic hedging activities included in Total operating revenues) (a) | 5 | (10) | 35 | (21) | |||||||||||||||||||
Energy-Related Commodity Contracts (Mark-to-market for economic hedging activities included in Cost of operations) (b) | (1) | — | (1) | — | |||||||||||||||||||
(a) Relates to long-term energy-related commodity contracts at Elbow Creek, Mesquite Star, Mt. Storm, Langford and Mesquite Sky and heat rate call option energy-related commodity contracts at El Segundo, Marsh Landing and Walnut Creek.
(b) Relates to backbone transportation service energy-related commodity contracts at El Segundo and Walnut Creek.
See Note 5, Fair Value of Financial Instruments, for a discussion regarding concentration of credit risk.
Note 7 — Long-term Debt
This note should be read in conjunction with the complete description under Item 15 — Note 10, Long-term Debt, to the consolidated financial statements included in the Company’s 2025 Form 10-K. The Company’s borrowings, including short-term and long-term portions, consisted of the following:
| Maturity Date | June 30, 2026 | December 31, 2025 | Interest Rate (a) | |||||||||||||||||||||||
| (In millions) | ||||||||||||||||||||||||||
| Senior Notes | 2028-2034 | $ | 2,725 | $ | 2,125 | 3.750% - 5.750% | ||||||||||||||||||||
Clearway Energy LLC and Clearway Energy Operating LLC Revolving Credit Facility (b) (c) | 2028 | 60 | 361 | S+1.750% | ||||||||||||||||||||||
| Non-recourse facility-level debt: | ||||||||||||||||||||||||||
| Fixed rate | 2031-2040 | 3,195 | 3,001 | 2.339% - 8.000% | ||||||||||||||||||||||
| Variable rate | 2026-2036 | 3,157 | 3,187 | S+1.375% - 2.750% | ||||||||||||||||||||||
| Total debt | 9,137 | 8,674 | ||||||||||||||||||||||||
| Less current maturities | (570) | (708) | ||||||||||||||||||||||||
| Less net debt issuance costs | (80) | (70) | ||||||||||||||||||||||||
Add premiums (d) | 4 | 2 | ||||||||||||||||||||||||
| Total long-term debt | $ | 8,491 | $ | 7,898 | ||||||||||||||||||||||
(a) As of June 30, 2026, S+ equals SOFR plus x%.
(b) Applicable rate is determined by the borrower leverage ratio, as defined in the credit agreement.
(c) During July 2026, the Company borrowed an additional $45 million under the revolving credit facility and subsequently repaid $50 million. As of July 31, 2026, the Company had $55 million in outstanding borrowings under the revolving credit facility.
(d) Premiums relate to the 2028 Senior Notes and the debt assumed in the Cardinal Portfolio acquisition.
As of June 30, 2026, the Company had $1,340 million in letters of credit outstanding, $198 million of which is related to the Company’s revolving credit facility.
The financing arrangements listed above contain certain covenants, including financial covenants that the Company is required to be in compliance with during the term of the respective arrangement. As of June 30, 2026, the Company was in compliance with all of the required covenants.
25
The discussion below describes material changes to or additions of long-term debt for the six months ended June 30, 2026.
2034 Senior Notes
On January 13, 2026, Clearway Energy Operating LLC completed the sale of $600 million aggregate principal amount of senior unsecured notes due 2034, or the 2034 Senior Notes. The 2034 Senior Notes bear interest at a rate of 5.750% per annum and mature on January 15, 2034. Interest on the 2034 Senior Notes is payable semi-annually on January 15 and July 15 of each year, beginning on July 15, 2026. The 2034 Senior Notes are unsecured obligations of Clearway Energy Operating LLC and are guaranteed by Clearway Energy LLC and by certain of Clearway Energy Operating LLC’s wholly-owned current and future subsidiaries. The net proceeds from the 2034 Senior Notes were used to repay $361 million in outstanding borrowings under the revolving credit facility and for general corporate purposes.
Facility-level Debt
Commodity Contract Restructuring Transactions
The Company completed the following restructuring activities related to certain long-term commodity contracts associated with its wind facilities. In connection with each restructuring, the Company entered into a new 15-year PPA with a commercial or investment-grade counterparty.
Elbow Creek Restructuring
On June 25, 2026, the Company restructured its existing energy‑related commodity contract associated with the Elbow Creek wind facility, which resulted in an in‑substance financing to settle existing derivative liabilities over time. As a result of the restructuring, the Company derecognized derivative liabilities with a fair value of $46 million, as well as $8 million owed to the counterparty that was previously included in other non‑current liabilities. The Company also paid $20 million, which was used to settle the non-current liability and partially settle the outstanding derivative liability, resulting in a term financing obligation with an initial carrying amount of $34 million. The financing obligation is repaid through fixed monthly payments beginning in July 2026 and matures on October 31, 2032. Total payments over the term of the arrangement are $40 million, which implies an effective interest rate of approximately 5.493%. Interest expense is recognized over the term of the obligation using the effective interest method.
Langford Restructuring
On June 10, 2026, the Company restructured its existing energy‑related commodity contract associated with the Langford wind facility, which resulted in an in‑substance financing to settle existing derivative liabilities over time. As a result of the restructuring, the Company derecognized derivative liabilities with a fair value of $62 million and recognized a term financing obligation with an initial carrying amount of $62 million. The financing obligation is repaid through fixed monthly payments beginning in July 2026 and matures on June 30, 2033. Total payments over the term of the arrangement are $75 million, which implies an effective interest rate of approximately 5.749%. Interest expense is recognized over the term of the obligation using the effective interest method.
Mesquite Sky Restructuring
On March 27, 2026, the Company restructured its existing energy‑related commodity contract associated with the Mesquite Sky wind facility, which resulted in an in‑substance financing to settle existing derivative liabilities over time. As a result of the restructuring, the Company derecognized derivative liabilities with a fair value of $115 million, as well as $12 million owed to the counterparty that was previously included in other non‑current liabilities, and recognized a term financing obligation with an initial carrying amount of $127 million. The financing obligation is repaid through fixed monthly payments beginning in May 2026 and matures on September 30, 2035. Total payments over the term of the arrangement are $162 million, which implies an effective interest rate of approximately 5.436%. Interest expense is recognized over the term of the obligation using the effective interest method.
26
Third-Party Acquisition
Cardinal Portfolio
On February 5, 2026, the Company, through its indirect subsidiary, Cardinal Investment Holdco LLC, entered into a financing arrangement that provides for a term loan of up to $100 million and $119 million in letters of credit in support of debt service and facility-level obligations. On March 30, 2026, the Company borrowed $100 million to partially fund the acquisition of the Cardinal Portfolio, as further described in Note 3, Acquisitions. The financing is supported by the Company’s interest in the Cardinal Portfolio. The term loan bears interest at a rate of SOFR plus 2.00% per annum and matures on March 29, 2027.
In connection with the acquisition of the Cardinal Portfolio on March 30, 2026, as further described in Note 3, Acquisitions, the Company assumed existing facility‑level debt associated with certain of the acquired facilities. The assumed debt is secured by the respective facilities and is non‑recourse to the Company. In accordance with ASC 805, the assumed debt was recorded at its estimated fair value as of the acquisition date. On April 27, 2026, the Company made an early partial repayment of $17 million of the assumed facility-level debt. The assumed facility‑level debt has maturities ranging from 2032 through 2036.
Drop Down Transactions
Honeycomb Portfolio
On May 1, 2026, when the Honeycomb Portfolio BESS facilities reached substantial completion, the Company paid $81 million to Clearway Renew as additional purchase price in connection with the Company’s acquisition of Honeycomb TargetCo LLC, or Honeycomb TargetCo, from Clearway Renew, which occurred on October 15, 2025. The Company’s additional purchase price was funded with existing sources of liquidity. The Company’s entire additional purchase price was recorded as an adjustment to CEG’s noncontrolling interest balance. The Company’s total capital investment in Honeycomb TargetCo was $97 million. Also, on May 1, 2026, the tax equity investor in Honeycomb TE Holdco LLC contributed an additional $254 million, which was utilized along with the $60 million previously held in escrow, to repay the $234 million tax equity bridge loan and to pay $13 million in associated fees with the remaining $67 million distributed to CEG. Prior to substantial completion being reached, the Company borrowed an additional $71 million in construction loans during 2026, and on May 1, 2026, the total outstanding construction loans were converted to a term loan in the amount of $327 million that matures on May 1, 2031.
Goat Mountain Repowering
On February 27, 2026, the Company, through its indirect subsidiaries, Goat Mountain Class B Holdco LLC and Goat Wind LLC, as co-borrowers, entered into a financing arrangement for non-recourse debt for a total commitment of $703 million, which consists of a construction loan that converts to a five-year term loan upon the repowering of the facility reaching substantial completion, which is expected to occur in the second half of 2027, as well as bridge loans to be repaid with the proceeds from the tax equity investor. The construction loan and bridge loans bear interest at a rate of SOFR plus 1.50% and mature on the term conversion date. The Company’s initial borrowing of $140 million was utilized to pay $88 million under the development services agreement, as further described in Note 12, Related Party Transactions, $15 million in debt issuance costs that were deferred and $5 million in capital expenditures. Under the financing arrangement, the Company borrowed $231 million through June 30, 2026.
Pine Forest
On January 15, 2026, the Company repaid the $231 million outstanding on the tax credit transfer bridge loan utilizing the proceeds received from the sale of transferable ITCs, as further described in Note 11, Income Taxes, and distributed the remaining $51 million to CEG.
Note 8 — Earnings (Loss) Per Share
Basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. Shares issued during the year are weighted for the portion of the year that they were outstanding. Diluted earnings (loss) per share is computed in a manner consistent with that of basic earnings (loss) per share while giving effect to all potentially dilutive common shares that were outstanding during the period.
27
The reconciliation of the Company’s basic and diluted earnings (loss) per share is presented in the following tables, including revisions to previously reported amounts:
| Three months ended June 30, 2026 | Six months ended June 30, 2026 | |||||||||||||||||||||||||
(In millions, except per share data) (a) | Common Class A (b) | Common Class C | Common Class A (b) | Common Class C | ||||||||||||||||||||||
| Basic and diluted earnings (loss) per share attributable to Clearway Energy, Inc. common stockholders | ||||||||||||||||||||||||||
| Net income (loss) attributable to Clearway Energy, Inc. | $ | 11 | $ | 111 | $ | (8) | $ | (33) | ||||||||||||||||||
| Weighted average number of common shares outstanding — basic and diluted | 11 | 110 | 23 | 98 | ||||||||||||||||||||||
| Earnings (loss) per weighted average common share — basic and diluted | $ | 1.00 | $ | 1.00 | $ | (0.34) | $ | (0.34) | ||||||||||||||||||
(a) Net income (loss) attributable to Clearway Energy, Inc. and basic and diluted earnings (loss) per share might not recalculate due to presenting amounts in millions rather than whole dollars.
(b) As of May 1, 2026, each share of the Company’s Class A common stock converted into one share of Class C common stock, as further described in Note 9, Changes in Capital Structure.
| Three months ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| As Previously Reported | Adjustments | As Revised | ||||||||||||||||||||||||||||||||||||
(In millions, except per share data) (a) | Common Class A | Common Class C | Common Class A | Common Class C | Common Class A | Common Class C | ||||||||||||||||||||||||||||||||
| Basic and diluted earnings per share attributable to Clearway Energy, Inc. common stockholders | ||||||||||||||||||||||||||||||||||||||
| Net income attributable to Clearway Energy, Inc. | $ | 10 | $ | 23 | $ | (1) | $ | (2) | $ | 9 | $ | 21 | ||||||||||||||||||||||||||
| Weighted average number of common shares outstanding — basic and diluted | 35 | 83 | — | — | 35 | 83 | ||||||||||||||||||||||||||||||||
| Earnings per weighted average common share — basic and diluted | $ | 0.28 | $ | 0.28 | $ | (0.03) | $ | (0.03) | $ | 0.25 | $ | 0.25 | ||||||||||||||||||||||||||
(a) Net income attributable to Clearway Energy, Inc. and basic and diluted earnings per share might not recalculate due to presenting amounts in millions rather than whole dollars.
| Six months ended June 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| As Previously Reported | Adjustments | As Revised | ||||||||||||||||||||||||||||||||||||
(In millions, except per share data) (a) | Common Class A | Common Class C | Common Class A | Common Class C | Common Class A | Common Class C | ||||||||||||||||||||||||||||||||
| Basic and diluted earnings per share attributable to Clearway Energy, Inc. common stockholders | ||||||||||||||||||||||||||||||||||||||
| Net income attributable to Clearway Energy, Inc. | $ | 11 | $ | 26 | $ | (3) | $ | (7) | $ | 8 | $ | 19 | ||||||||||||||||||||||||||
| Weighted average number of common shares outstanding — basic and diluted | 35 | 83 | — | — | 35 | 83 | ||||||||||||||||||||||||||||||||
| Earnings per weighted average common share — basic and diluted | $ | 0.31 | $ | 0.31 | $ | (0.08) | $ | (0.08) | $ | 0.23 | $ | 0.23 | ||||||||||||||||||||||||||
(a) Net income attributable to Clearway Energy, Inc. and basic and diluted earnings per share might not recalculate due to presenting amounts in millions rather than whole dollars.
Note 9 — Changes in Capital Structure
Class A Conversion
On April 29, 2026, at the Company’s Annual Meeting of Stockholders, the Company’s stockholders approved the Amended Charter, pursuant to which each outstanding share of the Company’s Class A common stock was converted into one share of the Company’s Class C common stock, effective May 1, 2026, referred to as the Class A Conversion. As a result of the Class A Conversion, the Company no longer has any Class A common stock.
28
In connection with the Class A Conversion, on April 29, 2026, CEG entered into a voting trust agreement, or the Voting Trust Agreement, with Wilmington Trust, National Association, as the voting trustee thereunder, or the Voting Trustee, pursuant to which CEG deposited into a voting trust 41,678,637 shares of Class B common stock, or the Voting Trust Shares. The Voting Trust Shares were deposited to maintain CEG’s relative voting power in the Company immediately following the Class A Conversion at the level immediately prior thereto. Under the Voting Trust Agreement, the Voting Trustee is required to vote the Voting Trust Shares on any stockholder matter in the same proportion as the votes cast by all Company stockholders. As of June 30, 2026, 41,678,637 shares of Class B common stock were held in the voting trust and subject to the terms of the Voting Trust Agreement.
Neither the Amended Charter nor the Class A Conversion affected the economic interests of the Company’s stockholders, including dividend and liquidation rights. Following the Class A Conversion, holders of the Company’s former Class A common stock converted into Class C common stock remain entitled to receive dividends, if declared by the Company, on the same basis as prior to the conversion.
Following the Class A Conversion, the Company’s Class A common stock, which previously traded on the NYSE under the symbol “CWEN.A”, was delisted. The Company’s Class C common stock continues to trade on the NYSE under the symbol “CWEN.”
Effective concurrently with the Class A Conversion, each outstanding Class A unit of Clearway Energy LLC was converted into one Class C unit of Clearway Energy LLC.
Direct Stock Purchase Plan, or DSPP
As previously disclosed in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025, the Company maintains a DSPP, pursuant to which it may issue shares of its Class C common stock, including through waiver arrangements.
During January 2026, the Company issued 1,445,244 shares of Class C common stock under the DSPP for gross proceeds of $50 million and incurred fees of less than $1 million, which were exchanged for 1,445,244 Class C units of Clearway Energy LLC. As of June 30, 2026, 1,061,554 shares of Class C common stock remained available for issuance under the DSPP.
Dividends to Class A and Class C Common Stockholders
The following table lists the dividends paid on the Company’s Class A and Class C common stock during the six months ended June 30, 2026:
Second Quarter 2026 | First Quarter 2026 | |||||||||||||
| Dividends per Class A share | $ | — | $ | 0.4602 | ||||||||||
| Dividends per Class C share | 0.4676 | 0.4602 | ||||||||||||
As a result of the Class A Conversion discussed above, the Company no longer has any Class A common stock outstanding, and holders of the Company’s former Class A common stock converted into Class C common stock remain entitled to receive dividends, if declared by the Company, on the same basis as prior to the conversion.
Dividends on the Class C common stock are subject to available capital, market conditions and compliance with associated laws, regulations and other contractual obligations. The Company expects that, based on current circumstances, comparable cash dividends will continue to be paid in the foreseeable future.
On August 4, 2026, the Company declared quarterly dividends on its Class C common stock of $0.4750 per share payable on September 15, 2026 to stockholders of record as of September 1, 2026.
Distributions to CEG
The following table lists distributions paid to CEG during the six months ended June 30, 2026 on Clearway Energy LLC’s Class B and D units:
Second Quarter 2026 | First Quarter 2026 | |||||||||||||
| Distributions per Class B Unit | $ | 0.4676 | $ | 0.4602 | ||||||||||
| Distributions per Class D Unit | 0.4676 | 0.4602 | ||||||||||||
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On August 4, 2026, Clearway Energy LLC declared a distribution on its Class B and Class D units of $0.4750 per unit payable on September 15, 2026 to unit holders of record as of September 1, 2026.
Note 10 — Segment Reporting
The Company’s segment structure reflects how management currently operates and allocates resources. The Company’s businesses are segregated based on Flexible Generation and Renewables & Storage businesses, which consist of solar, wind and battery energy storage system, or BESS, facilities. The Corporate segment reflects the Company’s corporate costs and includes eliminating entries. The Company’s chief operating decision maker, its Chief Executive Officer, evaluates the performance of its segments based on net income (loss). The Company’s Chief Executive Officer reviews net income (loss) and its components on a monthly and quarterly basis to evaluate the performance of each segment and to determine how to allocate resources.
| Three months ended June 30, 2026 | |||||||||||||||||||||||
| (In millions) | Flexible Generation | Renewables & Storage | Corporate (a) | Total | |||||||||||||||||||
| Operating revenues | $ | 86 | $ | 395 | $ | — | $ | 481 | |||||||||||||||
| Cost of operations, exclusive of depreciation, amortization and accretion shown separately below | 29 | 120 | — | 149 | |||||||||||||||||||
| Depreciation, amortization and accretion | 28 | 168 | — | 196 | |||||||||||||||||||
| General and administrative | — | — | 15 | 15 | |||||||||||||||||||
| Transaction and integration costs | — | — | 5 | 5 | |||||||||||||||||||
| Operating income (loss) | 29 | 107 | (20) | 116 | |||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | — | 11 | — | 11 | |||||||||||||||||||
| Other income, net | 1 | 6 | 1 | 8 | |||||||||||||||||||
| Loss on debt extinguishment | — | (3) | — | (3) | |||||||||||||||||||
| Interest expense | (8) | (66) | (31) | (105) | |||||||||||||||||||
| Income (loss) before income taxes | 22 | 55 | (50) | 27 | |||||||||||||||||||
| Income tax benefit | — | — | (3) | (3) | |||||||||||||||||||
| Net Income (Loss) | 22 | 55 | (47) | 30 | |||||||||||||||||||
| Less: Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | — | (198) | 106 | (92) | |||||||||||||||||||
| Net Income (Loss) Attributable to Clearway Energy, Inc. | $ | 22 | $ | 253 | $ | (153) | $ | 122 | |||||||||||||||
| Balance Sheet | |||||||||||||||||||||||
Capital expenditures (b) | $ | 1 | $ | 46 | $ | — | $ | 47 | |||||||||||||||
(a) Includes eliminations.
(b) Includes accruals.
30
Three months ended June 30, 2025 (as revised) (a) | |||||||||||||||||||||||
| (In millions) | Flexible Generation | Renewables & Storage | Corporate (b) | Total | |||||||||||||||||||
| Operating revenues | $ | 50 | $ | 342 | $ | — | $ | 392 | |||||||||||||||
| Cost of operations, exclusive of depreciation, amortization and accretion shown separately below | 24 | 107 | — | 131 | |||||||||||||||||||
| Depreciation, amortization and accretion | 28 | 135 | — | 163 | |||||||||||||||||||
| General and administrative | — | — | 11 | 11 | |||||||||||||||||||
| Transaction and integration costs | — | — | 2 | 2 | |||||||||||||||||||
| Operating (loss) income | (2) | 100 | (13) | 85 | |||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | — | 7 | — | 7 | |||||||||||||||||||
| Other income, net | 1 | 6 | 1 | 8 | |||||||||||||||||||
| Interest expense | (10) | (50) | (23) | (83) | |||||||||||||||||||
| (Loss) income before income taxes | (11) | 63 | (35) | 17 | |||||||||||||||||||
| Income tax expense | — | — | 5 | 5 | |||||||||||||||||||
| Net (Loss) Income | (11) | 63 | (40) | 12 | |||||||||||||||||||
| Less: Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | — | (45) | 27 | (18) | |||||||||||||||||||
| Net (Loss) Income Attributable to Clearway Energy, Inc. | $ | (11) | $ | 108 | $ | (67) | $ | 30 | |||||||||||||||
| Balance Sheet | |||||||||||||||||||||||
Capital expenditures (c) | $ | — | $ | 51 | $ | — | $ | 51 | |||||||||||||||
(a) The following table reconciles the revisions for the Renewables & Storage and Corporate segments:
Three months ended June 30, 2025 | |||||||||||||||||
| (In millions) | As Previously Reported | Adjustments | As Revised | ||||||||||||||
| Renewables & Storage Segment: | |||||||||||||||||
| Net loss attributable to noncontrolling interests | $ | (50) | $ | 5 | $ | (45) | |||||||||||
| Net income attributable to Clearway Energy, Inc. | 113 | (5) | 108 | ||||||||||||||
| Corporate Segment: | |||||||||||||||||
| Net income attributable to noncontrolling interests | $ | 29 | $ | (2) | $ | 27 | |||||||||||
| Net loss attributable to Clearway Energy, Inc. | (69) | 2 | (67) | ||||||||||||||
(b) Includes eliminations.
(c) Includes accruals.
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Six months ended June 30, 2026 | |||||||||||||||||||||||
| (In millions) | Flexible Generation | Renewables & Storage | Corporate (a) | Total | |||||||||||||||||||
| Operating revenues | $ | 147 | $ | 688 | $ | — | $ | 835 | |||||||||||||||
| Cost of operations, exclusive of depreciation, amortization and accretion shown separately below | 59 | 224 | — | 283 | |||||||||||||||||||
| Depreciation, amortization and accretion | 56 | 321 | 1 | 378 | |||||||||||||||||||
| General and administrative | — | — | 26 | 26 | |||||||||||||||||||
| Transaction and integration costs | — | — | 12 | 12 | |||||||||||||||||||
| Operating income (loss) | 32 | 143 | (39) | 136 | |||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | 2 | 14 | — | 16 | |||||||||||||||||||
| Other income, net | 2 | 11 | 3 | 16 | |||||||||||||||||||
| Loss on debt extinguishment | — | (5) | — | (5) | |||||||||||||||||||
| Interest expense | (16) | (123) | (67) | (206) | |||||||||||||||||||
| Income (loss) before income taxes | 20 | 40 | (103) | (43) | |||||||||||||||||||
| Income tax benefit | — | — | (5) | (5) | |||||||||||||||||||
| Net Income (Loss) | 20 | 40 | (98) | (38) | |||||||||||||||||||
| Less: Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interest | — | (150) | 153 | 3 | |||||||||||||||||||
| Net Income (Loss) Attributable to Clearway Energy, Inc. | $ | 20 | $ | 190 | $ | (251) | $ | (41) | |||||||||||||||
| Balance Sheet | |||||||||||||||||||||||
| Equity investments in affiliates | $ | 70 | $ | 305 | $ | — | $ | 375 | |||||||||||||||
Capital expenditures (b) | 5 | 124 | — | 129 | |||||||||||||||||||
| Total Assets | $ | 1,770 | $ | 14,876 | $ | 126 | $ | 16,772 | |||||||||||||||
(a) Includes eliminations.
(b) Includes accruals.
32
Six months ended June 30, 2025 (as revised) (a) | |||||||||||||||||||||||
| (In millions) | Flexible Generation | Renewables & Storage | Corporate (b) | Total | |||||||||||||||||||
| Operating revenues | $ | 118 | $ | 572 | $ | — | $ | 690 | |||||||||||||||
| Cost of operations, exclusive of depreciation, amortization and accretion shown separately below | 55 | 198 | — | 253 | |||||||||||||||||||
| Depreciation, amortization and accretion | 56 | 270 | — | 326 | |||||||||||||||||||
| General and administrative | — | — | 21 | 21 | |||||||||||||||||||
| Transaction and integration costs | — | — | 5 | 5 | |||||||||||||||||||
| Operating income (loss) | 7 | 104 | (26) | 85 | |||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | — | 12 | — | 12 | |||||||||||||||||||
| Other income, net | 2 | 11 | 2 | 15 | |||||||||||||||||||
| Loss on debt extinguishment | — | — | — | — | |||||||||||||||||||
| Interest expense | (18) | (134) | (47) | (199) | |||||||||||||||||||
| Loss before income taxes | (9) | (7) | (71) | (87) | |||||||||||||||||||
| Income tax expense | — | — | 5 | 5 | |||||||||||||||||||
| Net Loss | (9) | (7) | (76) | (92) | |||||||||||||||||||
| Less: Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | — | (144) | 25 | (119) | |||||||||||||||||||
| Net (Loss) Income Attributable to Clearway Energy, Inc. | $ | (9) | $ | 137 | $ | (101) | $ | 27 | |||||||||||||||
| Balance Sheet | |||||||||||||||||||||||
| Equity investments in affiliates | $ | 73 | $ | 224 | $ | — | $ | 297 | |||||||||||||||
Capital expenditures (c) | 2 | 87 | — | 89 | |||||||||||||||||||
| Total Assets | $ | 1,879 | $ | 14,083 | $ | 71 | $ | 16,033 | |||||||||||||||
(a) The following table reconciles the revisions for the Renewables & Storage and Corporate segments:
Six months ended June 30, 2025 | |||||||||||||||||
| (In millions) | As Previously Reported | Adjustments | As Revised | ||||||||||||||
| Renewables & Storage Segment: | |||||||||||||||||
| Net loss attributable to noncontrolling interests | $ | (161) | $ | 17 | $ | (144) | |||||||||||
| Net income attributable to Clearway Energy, Inc. | 154 | (17) | 137 | ||||||||||||||
| Corporate Segment: | |||||||||||||||||
| Net income attributable to noncontrolling interests | $ | 32 | $ | (7) | $ | 25 | |||||||||||
| Net loss attributable to Clearway Energy, Inc. | (108) | 7 | (101) | ||||||||||||||
(b) Includes eliminations.
(c) Includes accruals.
Note 11 — Income Taxes
Effective Tax Rate
The income tax provision consisted of the following amounts:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In millions, except percentages) | |||||||||||||||||||||||
| Income (loss) before income taxes | $ | 27 | $ | 17 | $ | (43) | $ | (87) | |||||||||||||||
| Income tax (benefit) expense | (3) | 5 | (5) | 5 | |||||||||||||||||||
| Effective income tax rate | (11.1) | % | 29.4 | % | 11.6 | % | (5.7) | % | |||||||||||||||
For the three and six months ended June 30, 2026 and 2025, the overall effective tax rate was different than the statutory rate of 21% primarily due to the allocation of taxable earnings and losses based on the partners’ interest in Clearway Energy LLC, which includes the effects of applying the HLBV method of accounting for book purposes for certain partnerships.
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For tax purposes, Clearway Energy LLC is treated as a partnership; therefore, the Company and CEG each record their respective share of taxable income or loss.
Tax Credits
In January 2026, the Company received $282 million from the transfer of PTCs and ITCs, of which $279 million related to the Pine Forest facility and was primarily used to repay the $231 million outstanding on the tax credit transfer bridge loan as further described in Note 7, Long-term Debt.
Note 12 — Related Party Transactions
In addition to the transactions and relationships described elsewhere in the notes to the consolidated financial statements, certain subsidiaries of CEG provide services to the Company and its operating subsidiaries. Amounts due to CEG subsidiaries are recorded as accounts payable — affiliates and amounts due to the Company from CEG subsidiaries are recorded as accounts receivable — affiliates in the Company’s consolidated balance sheets. The disclosures below summarize the Company’s material related party transactions with CEG and its subsidiaries. This footnote should be read in conjunction with the complete description under Item 15 — Note 15, Related Party Transactions, to the consolidated financial statements included in the Company’s 2025 Form 10-K.
Goat Mountain Development Services Agreement with Clearway Renew
Pursuant to the development services agreement entered into in July 2025, in connection with the closing of the Goat Mountain construction financing on February 27, 2026, as further described in Note 7, Long-term Debt, the Company acquired assets totaling $106 million, consisting of $98 million for deposits related to the future delivery of equipment, which is included in other non-current assets on the Company’s consolidated balance sheet, and $8 million of capital expenditures. Of this amount, $70 million was paid to Clearway Renew on February 27, 2026, with the remaining $36 million paid to Clearway Renew in June 2026. Also on February 27, 2026, the Company paid Clearway Renew $18 million in fees under the development services agreement, which is included in the line item distributions to CEG, net of contributions, in the consolidated statements of stockholders’ equity. The Company estimates that its total capital investment in the Goat Mountain repowering will be $200 million, subject to closing adjustments.
O&M Services Agreements by and between the Company and Clearway Renewable Operation & Maintenance LLC
Various subsidiaries of the Company in the Renewables & Storage segment are party to services agreements with Clearway Renewable Operation & Maintenance LLC, or RENOM, a wholly-owned subsidiary of CEG, which provides operation and maintenance, or O&M, services to these subsidiaries. The Company incurred total expenses for these services of $25 million and $20 million for the three months ended June 30, 2026 and 2025, respectively. The Company incurred total expenses for these services of $46 million and $41 million for the six months ended June 30, 2026 and 2025, respectively. Expenses for these services are included in cost of operations in the consolidated statements of operations. There was a balance of $15 million and $8 million due to RENOM as of June 30, 2026 and December 31, 2025, respectively.
Administrative Services Agreements by and between the Company and CEG
Various subsidiaries of the Company are parties to services agreements with Clearway Asset Services LLC and Clearway Solar Asset Management LLC, two wholly-owned subsidiaries of CEG, which provide various administrative services to the Company's subsidiaries. The Company incurred total expenses for these services of $8 million and $6 million for the three months ended June 30, 2026 and 2025, respectively. The Company incurred expenses under these agreements of $14 million and $11 million for the six months ended June 30, 2026 and 2025, respectively. Expenses for these services are included in cost of operations in the consolidated statements of operations. There was a balance of $6 million and $3 million due to CEG as of June 30, 2026 and December 31, 2025, respectively.
CEG Master Services Agreement
The Company, along with certain of its subsidiaries, is a party to the CEG Master Services Agreement, pursuant to which CEG and certain of its affiliates or third-party service providers provide certain services to the Company. These services include operational and administrative services, such as human resources, information systems, cybersecurity, external affairs, legal, risk management, internal audit, accounting, procurement, tax and treasury services, in exchange for the payment of fees in respect of such services, which are settled on a quarterly basis. The Company also directly bears labor costs for certain CEG employees who perform work on behalf of the Company.
34
The Company incurred expenses under the CEG Master Services Agreement of $6 million for each of the three months ended June 30, 2026 and 2025. The Company incurred expenses under the CEG Master Services Agreement of $13 million and $12 million for the six months ended June 30, 2026 and 2025, respectively. Expenses for these services are included in general and administrative in the consolidated statements of operations.
Note 13 — Revision of Previously Issued Unaudited Financial Information
As discussed in Item 15 — Note 18, Revision of Previously Issued Unaudited Financial Information (Unaudited), during the fourth quarter of 2025, the Company’s management identified errors related to certain calculations of hypothetical liquidation at book value (HLBV) accounting used to allocate net income (loss) to the Company’s redeemable noncontrolling interests and noncontrolling interests in tax equity partnerships in each of the quarters ended March 31, 2025, June 30, 2025 and September 30, 2025. The Company evaluated the materiality of the errors in accordance with Staff Accounting Bulletins No. 99 and No. 108 of the SEC and concluded that the errors were immaterial to all previously reported periods and did not require restatement of any previously issued financial statements.
A summary of the corrections to the impacted financial statement line items is presented below:
Three months ended June 30, 2025 | Six months ended June 30, 2025 | |||||||||||||||||||||||||
| (in millions, except per share amount) | As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | As Revised | ||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||||
| Consolidated Statement of Operations | ||||||||||||||||||||||||||
| Net loss attributable to noncontrolling interests and redeemable noncontrolling interests | $ | (21) | $ | 3 | $ | (18) | $ | (129) | $ | 10 | $ | (119) | ||||||||||||||
| Net income attributable to Clearway Energy, Inc. | 33 | (3) | 30 | 37 | (10) | 27 | ||||||||||||||||||||
| Earnings per weighted average Class A and Class C common share - basic and diluted | $ | 0.28 | $ | (0.03) | $ | 0.25 | $ | 0.31 | $ | (0.08) | $ | 0.23 | ||||||||||||||
| Consolidated Statement of Comprehensive Income | ||||||||||||||||||||||||||
| Comprehensive loss attributable to noncontrolling interests | $ | (30) | $ | 3 | $ | (27) | $ | (141) | $ | 10 | $ | (131) | ||||||||||||||
| Comprehensive income attributable to Clearway Energy, Inc. | $ | 29 | $ | (3) | $ | 26 | $ | 31 | $ | (10) | $ | 21 | ||||||||||||||
Consolidated Balance Sheet (As of June 30, 2025) | ||||||||||||||||||||||||||
| Redeemable noncontrolling interest in subsidiaries | $ | 38 | $ | 7 | $ | 45 | ||||||||||||||||||||
| Retained earnings | 188 | (10) | 178 | |||||||||||||||||||||||
| Noncontrolling interest | 3,693 | 3 | 3,696 | |||||||||||||||||||||||
| Total Stockholders’ Equity | $ | 5,542 | $ | (7) | $ | 5,535 | ||||||||||||||||||||
| Consolidated Statements of Stockholders’ Equity | ||||||||||||||||||||||||||
| Retained Earnings: | ||||||||||||||||||||||||||
| Net income | $ | 33 | $ | (3) | $ | 30 | ||||||||||||||||||||
Retained Earnings at June 30, 2025 | $ | 188 | $ | (10) | $ | 178 | ||||||||||||||||||||
| Noncontrolling Interest: | ||||||||||||||||||||||||||
| Net loss | $ | (8) | $ | (4) | $ | (12) | ||||||||||||||||||||
Noncontrolling Interest at June 30, 2025 | $ | 3,693 | $ | 3 | $ | 3,696 | ||||||||||||||||||||
See Note 8, Earnings (Loss) Per Share, and Note 10, Segment Reporting, for more details related to the revisions included in the notes to the financial statements.
35
ITEM 2 — Management’s Discussion and Analysis of Financial Condition and the Results of Operations
The following discussion analyzes the Company’s historical financial condition and results of operations.
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 six months ended June 30, 2026 and 2025. Also refer to the Company’s 2025 Form 10-K, which includes detailed discussions of various items impacting the Company’s business, results of operations and financial condition.
The discussion and analysis below has been organized as follows:
•Executive Summary, including a description of the business and significant events that are important to understanding the results of operations and financial condition;
•Results of operations, including an explanation of significant differences between the periods in the specific line items of the consolidated statements of operations;
•Financial condition addressing liquidity position, sources and uses of cash, capital resources and requirements, commitments and off-balance sheet arrangements;
•Known trends that may affect the Company’s results of operations and financial condition in the future; and
•Critical accounting policies which are most important to both the portrayal of the Company’s financial condition and results of operations, and which require management’s most difficult, subjective or complex judgment.
36
Executive Summary
Introduction and Overview
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.
The Company is one of the largest owners of clean energy generation assets in the U.S. The Company’s portfolio comprises approximately 13.9 GW of gross capacity in 27 states, including approximately 11.1 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 years as of June 30, 2026 based on CAFD.
As of June 30, 2026, the Company’s operating assets are comprised of the following facilities:
| Capacity | ||||||||||||||||||||||||||||||||
| Percentage | Rated | Net | Contract | |||||||||||||||||||||||||||||
| Facilities | Ownership | MW | MW (a) | Counterparty | Expiration | |||||||||||||||||||||||||||
| Flexible Generation | ||||||||||||||||||||||||||||||||
| Carlsbad | 100 | % | 523 | 523 | SDG&E | 2038 | ||||||||||||||||||||||||||
| El Segundo | 100 | % | 546 | 546 | Various | 2027 - 2029 | ||||||||||||||||||||||||||
| GenConn Devon | 50 | % | 190 | 95 | Connecticut Light & Power | 2040 | ||||||||||||||||||||||||||
| GenConn Middletown | 50 | % | 190 | 95 | Connecticut Light & Power | 2041 | ||||||||||||||||||||||||||
| Marsh Landing | 100 | % | 820 | 820 | Various | 2026 - 2030 | ||||||||||||||||||||||||||
| Walnut Creek | 100 | % | 501 | 501 | Various | 2026 - 2027 | ||||||||||||||||||||||||||
| Total Flexible Generation | 2,770 | 2,580 | ||||||||||||||||||||||||||||||
| Utility Scale Solar | ||||||||||||||||||||||||||||||||
| Agua Caliente | 51 | % | 290 | 148 | PG&E | 2039 | ||||||||||||||||||||||||||
| Alpine | 100 | % | 66 | 66 | PG&E | 2033 | ||||||||||||||||||||||||||
Arica (b) | 40 | % | 263 | 105 | Various | 2036 - 2041 | ||||||||||||||||||||||||||
| Avenal | 50 | % | 45 | 23 | PG&E | 2031 | ||||||||||||||||||||||||||
Buckthorn Solar (b) | 100 | % | 150 | 150 | City of Georgetown, TX | 2043 | ||||||||||||||||||||||||||
Cardinal Portfolio JV (c) | 50 | % | 95 | 48 | Various | 2035 - 2041 | ||||||||||||||||||||||||||
Catalina (d) | —% (d) | 109 | 109 | SDG&E | 2038 | |||||||||||||||||||||||||||
Conetoe (c) | 100 | % | 80 | 80 | Corning Inc. and Lockheed Martin | 2040 | ||||||||||||||||||||||||||
| CVSR | 100 | % | 250 | 250 | PG&E | 2038 | ||||||||||||||||||||||||||
Daggett 2 (b) | 25 | % | 182 | 46 | Various | 2038 | ||||||||||||||||||||||||||
Daggett 3 (b) | 25 | % | 300 | 75 | Various | 2033 - 2038 | ||||||||||||||||||||||||||
| Desert Sunlight 250 | 25 | % | 250 | 63 | SCE | 2034 | ||||||||||||||||||||||||||
| Desert Sunlight 300 | 25 | % | 300 | 75 | PG&E | 2039 | ||||||||||||||||||||||||||
| Enterprise | 100 | % | 80 | 80 | PacifiCorp | 2036 | ||||||||||||||||||||||||||
| Escalante I | 100 | % | 80 | 80 | PacifiCorp | 2036 | ||||||||||||||||||||||||||
| Escalante II | 100 | % | 80 | 80 | PacifiCorp | 2036 | ||||||||||||||||||||||||||
| Escalante III | 100 | % | 80 | 80 | PacifiCorp | 2036 | ||||||||||||||||||||||||||
| Granite Mountain East | 100 | % | 80 | 80 | PacifiCorp | 2036 | ||||||||||||||||||||||||||
| Granite Mountain West | 100 | % | 50 | 50 | PacifiCorp | 2036 | ||||||||||||||||||||||||||
| Iron Springs | 100 | % | 80 | 80 | PacifiCorp | 2036 | ||||||||||||||||||||||||||
Luna Valley (b) | 100 | % | 200 | 200 | Various | 2040 - 2045 | ||||||||||||||||||||||||||
Mililani I (b) | 50 | % | 39 | 20 | Hawaiian Electric Company | 2042 | ||||||||||||||||||||||||||
Oahu Solar (b) | 100 | % | 61 | 61 | Hawaiian Electric Company | 2041 | ||||||||||||||||||||||||||
Pine Forest (b) | 50 | % | 300 | 150 | Various | 2040 - 2045 | ||||||||||||||||||||||||||
37
Rosamond Central (b) | 50 | % | 192 | 96 | Various | 2038 - 2047 | ||||||||||||||||||||||||||
Rosamond South I (b) | 50 | % | 140 | 70 | Various | 2040 | ||||||||||||||||||||||||||
Shoreham (b) (c) | 100 | % | 25 | 25 | Long Island Power Authority | 2038 | ||||||||||||||||||||||||||
Texas Solar Nova 1 (b) | 50 | % | 252 | 126 | Verizon | 2042 | ||||||||||||||||||||||||||
Texas Solar Nova 2 (b) | 50 | % | 200 | 100 | Verizon | 2042 | ||||||||||||||||||||||||||
Victory Pass (b) | 40 | % | 200 | 80 | Various | 2039 | ||||||||||||||||||||||||||
Waiawa (b) | 50 | % | 36 | 18 | Hawaiian Electric Company | 2043 | ||||||||||||||||||||||||||
| Other Utility Scale Solar | 100 | % | 175 | 175 | Various | 2029 - 2038 | ||||||||||||||||||||||||||
| Total Utility Scale Solar | 4,730 | 2,889 | ||||||||||||||||||||||||||||||
| Utility Scale BESS | ||||||||||||||||||||||||||||||||
Arica (b) | 40 | % | 136 | 54 | Various | 2039 - 2041 | ||||||||||||||||||||||||||
Daggett 1 (b) | 100 | % | 114 | 114 | SDG&E | 2040 | ||||||||||||||||||||||||||
Daggett 2 (b) | 25 | % | 131 | 33 | Various | 2038 | ||||||||||||||||||||||||||
Daggett 3 (b) | 25 | % | 149 | 37 | Various | 2033 - 2038 | ||||||||||||||||||||||||||
Honeycomb Portfolio (b) | 100 | % | 320 | 320 | PacifiCorp | 2046 | ||||||||||||||||||||||||||
Mililani I (b) | 50 | % | 39 | 20 | Hawaiian Electric Company | 2042 | ||||||||||||||||||||||||||
Pine Forest (b) | 50 | % | 200 | 100 | N/A | |||||||||||||||||||||||||||
Rosamond Central (b) | 50 | % | 147 | 74 | SCE | 2039 | ||||||||||||||||||||||||||
Rosamond South I (b) | 50 | % | 117 | 59 | Various | 2035 - 2040 | ||||||||||||||||||||||||||
Victory Pass (b) | 40 | % | 50 | 20 | Various | 2039 | ||||||||||||||||||||||||||
Waiawa (b) | 50 | % | 36 | 18 | Hawaiian Electric Company | 2043 | ||||||||||||||||||||||||||
| Total Utility Scale BESS | 1,439 | 849 | ||||||||||||||||||||||||||||||
| Distributed Solar | ||||||||||||||||||||||||||||||||
Cardinal Portfolio (c) | 100 | % | 239 | 239 | Various | 2027 - 2040 | ||||||||||||||||||||||||||
Cardinal Portfolio JV (c) | 50 | % | 130 | 65 | Various | 2033 - 2041 | ||||||||||||||||||||||||||
DGPV Funds (b) | 100 | % | 286 | 286 | Various | 2030 - 2044 | ||||||||||||||||||||||||||
| Solar Power Partners (SPP) | 100 | % | 24 | 24 | Various | 2026 - 2037 | ||||||||||||||||||||||||||
| Other DG Facilities | 100 | % | 20 | 20 | Various | 2026 - 2039 | ||||||||||||||||||||||||||
| Total Distributed Solar | 699 | 634 | ||||||||||||||||||||||||||||||
| Utility Scale Wind | ||||||||||||||||||||||||||||||||
| Alta I - V | 100 | % | 720 | 720 | SCE | 2035 | ||||||||||||||||||||||||||
| Alta X - XI | 100 | % | 227 | 227 | SCE | 2038 | ||||||||||||||||||||||||||
Black Rock (b) | 50 | % | 115 | 58 | Toyota and Google | 2036 | ||||||||||||||||||||||||||
| Broken Bow | 100 | % | 80 | 80 | Nebraska Public Power District | 2032 | ||||||||||||||||||||||||||
Cedar Creek (b) | 100 | % | 160 | 160 | PacifiCorp | 2049 | ||||||||||||||||||||||||||
Cedro Hill (b) | 100 | % | 160 | 160 | CPS Energy | 2045 | ||||||||||||||||||||||||||
| Crofton Bluffs | 100 | % | 42 | 42 | Nebraska Public Power District | 2032 | ||||||||||||||||||||||||||
Dan’s Mountain (b) | 50 | % | 55 | 28 | Constellation Energy Generation | 2037 | ||||||||||||||||||||||||||
Elbow Creek (b) | 100 | % | 122 | 122 | Various | 2041 | ||||||||||||||||||||||||||
| Elkhorn Ridge | 66.7 | % | 81 | 54 | Nebraska Public Power District | 2029 | ||||||||||||||||||||||||||
Goat Mountain (e) | 99 | % | 150 | 149 | N/A | |||||||||||||||||||||||||||
Langford (b) | 100 | % | 160 | 160 | Various | 2041 | ||||||||||||||||||||||||||
| Laredo Ridge | 100 | % | 81 | 81 | Nebraska Public Power District | 2031 | ||||||||||||||||||||||||||
Mesquite Sky (b) | 50 | % | 340 | 170 | Various | 2041 | ||||||||||||||||||||||||||
Mesquite Star (b) | 50 | % | 419 | 210 | Various | 2032 - 2035 | ||||||||||||||||||||||||||
| Mountain Wind 1 | 100 | % | 61 | 61 | PacifiCorp | 2033 | ||||||||||||||||||||||||||
| Mountain Wind 2 | 100 | % | 80 | 80 | PacifiCorp | 2033 | ||||||||||||||||||||||||||
| Ocotillo | 100 | % | 55 | 55 | N/A | |||||||||||||||||||||||||||
Pinnacle (b) | 100 | % | 54 | 54 | Maryland Department of General Services and University System of Maryland | 2031 | ||||||||||||||||||||||||||
38
Rattlesnake (b) (f) | 100 | % | 160 | 160 | Avista Corporation | 2040 | ||||||||||||||||||||||||||
| San Juan Mesa | 75 | % | 120 | 90 | Southwestern Public Service Company | 2026 | ||||||||||||||||||||||||||
| Sleeping Bear | 100 | % | 95 | 95 | Public Service Company of Oklahoma | 2032 | ||||||||||||||||||||||||||
| South Trent | 100 | % | 101 | 101 | AEP Energy Partners | 2029 | ||||||||||||||||||||||||||
| Spring Canyon II and III | 100 | % | 63 | 63 | Platte River Power Authority | 2039 | ||||||||||||||||||||||||||
| Taloga | 100 | % | 130 | 130 | Oklahoma Gas & Electric | 2031 | ||||||||||||||||||||||||||
| Tuolumne | 100 | % | 137 | 137 | Turlock Irrigation District | 2040 | ||||||||||||||||||||||||||
Wildorado (b) | 100 | % | 161 | 161 | Southwestern Public Service Company | 2030 | ||||||||||||||||||||||||||
| Other Utility Scale Wind | 100 | % | 105 | 105 | Various | 2027 - 2033 | ||||||||||||||||||||||||||
| Total Wind | 4,234 | 3,713 | ||||||||||||||||||||||||||||||
| Total Clearway Energy, Inc. | 13,872 | 10,665 | ||||||||||||||||||||||||||||||
(a) For owned facilities, net capacity represents the maximum, or rated, generating or storage capacity of the facility multiplied by the Company’s percentage ownership in the facility as of June 30, 2026.
(b) Facilities are part of tax equity arrangements, as further described in Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities.
(c) Facilities are part of the Cardinal Portfolio acquisition, which closed on March 30, 2026, as further described in Note 3, Acquisitions.
(d) The Company leases 100% of the interests in the Catalina solar facility through a facility lease agreement that expires in October 2043.
(e) The Goat Mountain wind facility commenced repowering activities in February 2026 and was taken offline. Repowering commercial operations is expected to occur in the second half of 2027.
(f) Rattlesnake has a deliverable capacity of 144 MW.
39
Significant Events
Third-Party Acquisitions
•On March 30, 2026, the Company, through its indirect subsidiaries, Cardinal Purchaser LLC and Cardinal JV Purchaser LLC, completed the acquisition of the Cardinal Portfolio for net cash consideration of $322 million, which includes post-closing adjustments of $2 million. Of the net consideration, $242 million was paid by Cardinal Purchaser LLC related to facilities consolidated by the Company and $80 million was paid by Cardinal JV Purchaser LLC related to facilities held through a joint venture with a third-party investor, recorded as an equity method investment. After factoring in cash acquired, transaction expenses and proceeds from the related financing activities, the Company estimates its net capital investment in the Cardinal Portfolio will be approximately $240 million. See Note 3, Acquisitions, for further discussion of the transaction.
Financing Activities
•The Company completed restructuring activities related to certain long-term commodity contracts associated with the Elbow Creek, Langford and Mesquite Sky wind facilities. In connection with each restructuring, the Company entered into a new 15-year PPA with a commercial or investment-grade counterparty. See Note 7, Long-term Debt, for further discussion of the restructuring activities.
•On May 1, 2026, when the Honeycomb Portfolio BESS facilities reached substantial completion, the Company paid $81 million to Clearway Renew as additional purchase price in connection with the Company’s acquisition of Honeycomb TargetCo from Clearway Renew, which occurred on October 15, 2025. The Company’s total capital investment in Honeycomb TargetCo was $97 million. Also, on May 1, 2026, the tax equity investor in Honeycomb TE Holdco LLC contributed an additional $254 million, which was utilized along with the $60 million previously held in escrow, to repay the tax equity bridge loan and to pay associated fees with the remaining proceeds distributed to CEG. See Note 7, Long-term Debt, for further discussion of the transaction.
•On March 30, 2026, the Company, through its indirect subsidiary, Cardinal Investment Holdco LLC, borrowed $100 million under a new financing arrangement that was entered into in February 2026 to partially fund the acquisition of the Cardinal Portfolio. In connection with the acquisition, the Company also assumed non-recourse facility-level debt associated with certain of the acquired facilities. On April 27, 2026, the Company made an early partial repayment of $17 million of the assumed facility-level debt. See Note 7, Long-term Debt, for further discussion of the financing arrangement and assumed non-recourse facility-level debt.
•On February 27, 2026, the Company, through its indirect subsidiaries, Goat Mountain Class B Holdco LLC and Goat Wind LLC, as co-borrowers, entered into a financing arrangement for non-recourse debt for a total commitment of $703 million. The Company made initial borrowings under the arrangement to fund costs associated with the Goat Mountain repowering, including payments under the development services agreement with Clearway Renew. See Note 7, Long-term Debt, and Note 12, Related Party Transactions, for further discussion.
•On January 15, 2026, the Company repaid the $231 million outstanding on the Pine Forest tax credit transfer bridge loan utilizing the proceeds received from the sale of transferable ITCs and distributed the remaining $51 million to CEG, as further described in Note 7, Long-term Debt, and Note 11, Income Taxes.
•On January 13, 2026, Clearway Energy Operating LLC completed the sale of $600 million aggregate principal amount of 5.75% senior unsecured notes due 2034, or the 2034 Senior Notes. See Note 7, Long-term Debt, for further discussion of the 2034 Senior Notes.
Environmental Matters
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 has recently shifted at the federal level.
The Company’s environmental matters are further described in the Company’s 2025 Form 10-K in Item 1, Business — Environmental Matters and Item 1A, Risk Factors.
40
Regulatory Matters
The Company’s regulatory matters are described in Item 1, Business — Regulatory Matters and Item 1A, Risk Factors, of the Company’s 2025 Form 10-K.
41
Consolidated Results of Operations
The following table provides selected financial information:
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||
| Operating Revenues | |||||||||||||||||||||||||||||||||||
| Energy and capacity revenues | $ | 505 | $ | 428 | $ | 77 | $ | 863 | $ | 761 | $ | 102 | |||||||||||||||||||||||
| Other revenues | 25 | 22 | 3 | 41 | 42 | (1) | |||||||||||||||||||||||||||||
| Contract amortization | (51) | (45) | (6) | (101) | (89) | (12) | |||||||||||||||||||||||||||||
| Mark-to-market for economic hedges | 2 | (13) | 15 | 32 | (24) | 56 | |||||||||||||||||||||||||||||
| Total operating revenues | 481 | 392 | 89 | 835 | 690 | 145 | |||||||||||||||||||||||||||||
| Operating Costs and Expenses | |||||||||||||||||||||||||||||||||||
| Cost of fuels | 2 | 1 | 1 | 3 | 3 | — | |||||||||||||||||||||||||||||
| Operations and maintenance | 118 | 101 | 17 | 224 | 194 | 30 | |||||||||||||||||||||||||||||
| Other costs of operations | 29 | 29 | — | 56 | 56 | — | |||||||||||||||||||||||||||||
| Depreciation, amortization and accretion | 196 | 163 | 33 | 378 | 326 | 52 | |||||||||||||||||||||||||||||
| General and administrative | 15 | 11 | 4 | 26 | 21 | 5 | |||||||||||||||||||||||||||||
| Transaction and integration costs | 5 | 2 | 3 | 12 | 5 | 7 | |||||||||||||||||||||||||||||
| Total operating costs and expenses | 365 | 307 | 58 | 699 | 605 | 94 | |||||||||||||||||||||||||||||
| Operating Income | 116 | 85 | 31 | 136 | 85 | 51 | |||||||||||||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | 11 | 7 | 4 | 16 | 12 | 4 | |||||||||||||||||||||||||||||
| Other income, net | 8 | 8 | — | 16 | 15 | 1 | |||||||||||||||||||||||||||||
| Loss on debt extinguishment | (3) | — | (3) | (5) | — | (5) | |||||||||||||||||||||||||||||
| Derivative interest income (expense) | 7 | 2 | 5 | 7 | (32) | 39 | |||||||||||||||||||||||||||||
| Other interest expense | (112) | (85) | (27) | (213) | (167) | (46) | |||||||||||||||||||||||||||||
| Total other expense, net | (89) | (68) | (21) | (179) | (172) | (7) | |||||||||||||||||||||||||||||
| Income (Loss) Before Income Taxes | 27 | 17 | 10 | (43) | (87) | 44 | |||||||||||||||||||||||||||||
| Income tax (benefit) expense | (3) | 5 | (8) | (5) | 5 | (10) | |||||||||||||||||||||||||||||
| Net Income (Loss) | 30 | 12 | 18 | (38) | (92) | 54 | |||||||||||||||||||||||||||||
| Less: Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | (92) | (18) | (74) | 3 | (119) | 122 | |||||||||||||||||||||||||||||
Net Income (Loss) Attributable to Clearway Energy, Inc. | $ | 122 | $ | 30 | $ | 92 | $ | (41) | $ | 27 | $ | (68) | |||||||||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| Business metrics: | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
Solar MWh generated/sold (in thousands) (a) | 3,585 | 2,800 | 5,882 | 4,718 | |||||||||||||||||||
Wind MWh generated/sold (in thousands) (a) | 3,282 | 3,145 | 6,256 | 6,144 | |||||||||||||||||||
Solar & Wind MWh generated/sold (in thousands) (a) (b) | 6,867 | 5,945 | 12,138 | 10,862 | |||||||||||||||||||
Solar weighted-average capacity factor (c) | 35.6 | % | 36.9 | % | 30.4 | % | 31.3 | % | |||||||||||||||
Wind weighted-average capacity factor (d) | 36.8 | % | 33.6 | % | 35.4 | % | 33.6 | % | |||||||||||||||
| Flexible Generation MWh generated (in thousands) | 55 | 55 | 89 | 120 | |||||||||||||||||||
| Flexible Generation equivalent availability factor | 97.5 | % | 95.0 | % | 93.1 | % | 92.2 | % | |||||||||||||||
(a) Volumes do not include the MWh generated/sold by the Company’s equity method investments.
(b) MWh generated/sold includes 651 and 354 MWh (in thousands) associated with curtailment activities for the three months ended June 30, 2026 and 2025, respectively, and 1,027 and 790 for the six months ended June 30, 2026 and 2025, respectively.
(c) Typical average capacity factors for solar facilities is 25%. The weighted-average capacity factors can vary based on seasonality and weather.
(d) Typical average capacity factors for wind facilities is 25-45%. The weighted-average capacity factors can vary based on seasonality and weather.
42
Management’s Discussion of the Results of Operations for the Three Months Ended June 30, 2026 and 2025
Operating Revenues
Operating revenues increased by $89 million during the three months ended June 30, 2026, compared to the same period in 2025, due to a combination of the drivers summarized in the table below:
| (In millions) | ||||||||
| Renewables & Storage Segment | Increase primarily driven by the Daggett 1 BESS, Luna Valley solar, Pine Forest solar and BESS and Rosamond South I solar and BESS acquisitions, which reached commercial operations in the second half of 2025, the Honeycomb BESS facilities which reached commercial operations in April 2026, as well as the Catalina solar and Cardinal solar acquisitions in July 2025 and March 2026, respectively. | $ | 73 | |||||
| Increase primarily driven by the Tuolumne wind acquisition in April 2025, as well as the Dan’s Mountain wind acquisition, which reached commercial operations in May 2025. | 7 | |||||||
| Contract amortization | Decrease primarily driven by additional amortization from the Tuolumne wind, Catalina solar and Cardinal solar acquisitions in April 2025, July 2025 and March 2026, respectively. | (6) | ||||||
| Mark-to-market economic hedging activities | Increase in heat rate call option contracts primarily driven by changes in forward power and natural gas market prices. | 36 | ||||||
| Decrease primarily driven by an increase in forward power prices in the ERCOT market. | (17) | |||||||
| Decrease driven by the Mt. Storm hedge buy-out, which occurred during the second and third quarters of 2025. | (4) | |||||||
| $ | 89 | |||||||
Operations and Maintenance Expense
Operations and maintenance expense increased by $17 million during the three months ended June 30, 2026 , compared to the same period in 2025, due to a combination of the drivers summarized in the table below:
| (In millions) | ||||||||
| Renewables & Storage Segment | Increase primarily driven by the solar and BESS acquisitions referenced above. | $ | 12 | |||||
| Increase driven by the Tuolumne wind acquisition in April 2025. | 5 | |||||||
| $ | 17 | |||||||
Depreciation, Amortization and Accretion
Depreciation, amortization and accretion increased by $33 million during the three months ended June 30, 2026, compared to the same period in 2025, primarily due to the solar and BESS acquisitions referenced above.
Interest Expense
Interest expense increased by $22 million during the three months ended June 30, 2026, compared to the same period in 2025, primarily due to the following:
| (In millions) | |||||
| Increase in interest expense for the Renewables & Storage segment primarily due to an increase in principal balances from the solar and BESS acquisitions referenced above | $ | 19 | |||
| Increase in interest expense for the Corporate segment primarily due to the issuance of the 2034 Senior Notes | 8 | ||||
| Change in fair value of interest rate swaps due to changes in interest rates | (5) | ||||
| $ | 22 | ||||
43
Income Tax (Benefit) Expense
For the three months ended June 30, 2026, the Company recorded an income tax benefit of $3 million on pretax income of $27 million. For the same period in 2025, the Company recorded an income tax expense of $5 million on pretax income of $17 million. The $8 million decrease in income taxes during the three months ended June 30, 2026, compared to the same period in 2025, 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.
Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests
For the three months ended June 30, 2026, the Company had a net loss of $92 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
| (In millions) | |||||
Losses attributable to tax equity financing arrangements and the application of the HLBV method (primarily due to Daggett 1 TE Holdco LLC and Honeycomb TE Holdco LLC HLBV losses) | $ | (213) | |||
| CEG’s economic interest in Clearway Energy LLC | 106 | ||||
| Income attributable to third-party partnerships | 15 | ||||
| $ | (92) | ||||
For the three months ended June 30, 2025, the Company had a net loss of $18 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
| (In millions) | |||||
| Losses attributable to tax equity financing arrangements and the application of the HLBV method | $ | (40) | |||
| Losses attributable to third-party partnerships | (4) | ||||
| CEG’s economic interest in Clearway Energy LLC | 26 | ||||
| $ | (18) | ||||
44
Management’s Discussion of the Results of Operations for the Six Months Ended June 30, 2026 and 2025
Operating Revenues
Operating revenues increased by $145 million during the six months ended June 30, 2026, compared to the same period in 2025, due to a combination of the drivers summarized in the table below:
| (In millions) | ||||||||
| Renewables & Storage Segment | Increase primarily driven by the Daggett 1 BESS, Luna Valley solar, Pine Forest solar and BESS and Rosamond South I solar and BESS acquisitions, which reached commercial operations in the second half of 2025, the Honeycomb BESS facilities, which reached commercial operations in April 2026, and the Catalina solar and Cardinal solar acquisitions in July 2025 and March 2026, respectively. | $ | 105 | |||||
| Increase driven by the Tuolumne wind acquisition in April 2025, as well as the Dan’s Mountain wind acquisition, which reached commercial operations in May 2025. | 18 | |||||||
| Increase driven by higher wind resource at certain facilities. | 9 | |||||||
| Decrease driven by lower wind production at the Alta facilities due to lower wind resource in 2026 and the long-term enhancement program at Alta II-V that is expected to be completed in the second half of 2026. | (24) | |||||||
| Decrease driven by the Mt. Storm wind sale to Clearway Renew in October 2025 in connection with the repowering. | (9) | |||||||
| Flexible Generation Segment | Increase reflects normal operating variability. | 2 | ||||||
| Contract amortization | Decrease primarily driven by additional amortization from the Tuolumne wind, Catalina solar and Cardinal solar acquisitions in April 2025, July 2025 and March 2026, respectively. | (12) | ||||||
| Mark-to-market economic hedging activities | Increase primarily driven by a decrease in forward power prices in the ERCOT market. | 40 | ||||||
| Increase in heat rate call option contracts primarily driven by changes in forward power and natural gas market prices. | 27 | |||||||
| Decrease driven by the Mt. Storm hedge buy-out, which occurred during the second and third quarters of 2025. | (11) | |||||||
| $ | 145 | |||||||
Operations and Maintenance Expense
Operations and maintenance expense increased by $30 million during the six months ended June 30, 2026, compared to the same period in 2025, due to a combination of the drivers summarized in the table below:
| (In millions) | ||||||||
| Renewables & Storage Segment | Increase primarily driven by the solar and BESS acquisitions referenced above. | $ | 25 | |||||
| Increase driven by the Tuolumne wind acquisition in April 2025. | 5 | |||||||
| $ | 30 | |||||||
Depreciation, Amortization and Accretion
Depreciation, amortization and accretion increased by $52 million during the six months ended June 30, 2026, compared to the same period in 2025, primarily due to the solar and BESS acquisitions referenced above.
45
Interest Expense
Interest expense increased by $7 million during the six months ended June 30, 2026, compared to the same period in 2025, primarily due to the following:
| (In millions) | |||||
| Increase in interest expense for the Renewables & Storage segment primarily due to an increase in principal balances from the solar and BESS acquisitions referenced above | $ | 30 | |||
| Increase in interest expense for the Corporate segment primarily due to the issuance of the 2034 Senior Notes | 16 | ||||
| Change in fair value of interest rate swaps due to changes in interest rates | (39) | ||||
| $ | 7 | ||||
Income Tax (Benefit) Expense
For the six months ended June 30, 2026, the Company recorded an income tax benefit of $5 million on a pretax loss of $43 million. For the same period in 2025, the Company recorded an income tax expense of $5 million on a pretax loss of $87 million. The $10 million decrease in income taxes during the six months ended June 30, 2026, compared to the same period in 2025, 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.
Net Income (Loss) Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests
For the six months ended June 30, 2026, the Company had net income of $3 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
| (In millions) | |||||
| CEG’s economic interest in Clearway Energy LLC | $ | 153 | |||
| Income attributable to third-party partnerships (primarily from the equity pickup of Pine Forest TE HoldCo LLC HLBV losses) | 127 | ||||
Losses attributable to tax equity financing arrangements and the application of the HLBV method (primarily due to Daggett 1 TE Holdco LLC, Luna Valley TE Holdco LLC and Honeycomb TE Holdco LLC HLBV losses) | (277) | ||||
| $ | 3 | ||||
For the six months ended June 30, 2025, the Company had a net loss of $119 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
46
Liquidity and Capital Resources
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.
Current Liquidity Position
As of June 30, 2026 and December 31, 2025, the Company’s liquidity was approximately $985 million and $1,061 million, respectively, comprised of cash, restricted cash and availability under the Company’s revolving credit facility.
| (In millions) | June 30, 2026 | December 31, 2025 | ||||||||||||
| Cash and cash equivalents: | ||||||||||||||
| Clearway Energy, Inc. and Clearway Energy LLC, excluding subsidiaries | $ | 4 | $ | 37 | ||||||||||
| Subsidiaries | 247 | 194 | ||||||||||||
| Restricted cash: | ||||||||||||||
| Operating accounts | 130 | 146 | ||||||||||||
| Reserves, including debt service, distributions, performance obligations and other reserves | 162 | 441 | ||||||||||||
| Total cash, cash equivalents and restricted cash | 543 | 818 | ||||||||||||
| Revolving credit facility availability | 442 | 243 | ||||||||||||
| Total liquidity | $ | 985 | $ | 1,061 | ||||||||||
The Company’s liquidity includes $292 million and $587 million of restricted cash balances as of June 30, 2026 and December 31, 2025, 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 June 30, 2026, these restricted funds were comprised of $130 million designated to fund operating expenses, approximately $40 million designated for current debt service payments and $90 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. In January 2026, the Company distributed $174 million to the tax equity investor in Rosie South TE Holdco LLC related to transferable ITCs for the Rosamond South I solar and BESS facility that were included in restricted cash as of December 31, 2025.
Clearway Energy LLC and Clearway Energy Operating LLC Revolving Credit Facility
As of June 30, 2026, the Company had $60 million in outstanding borrowings under the revolving credit facility and $198 million in letters of credit outstanding. During January 2026, the Company repaid $361 million in outstanding borrowings under the revolving credit facility utilizing the proceeds from the sale of the 2034 Senior Notes. During July 2026, the Company borrowed an additional $45 million under the revolving credit facility and subsequently repaid $50 million. As of July 31, 2026, the Company had $55 million in outstanding borrowings under the revolving credit facility. The facility will continue to be used for general corporate purposes including financing of future investments or acquisitions and posting letters of credit.
Management believes that the Company’s liquidity position, cash flows from operations and availability under its revolving credit facility will be adequate to meet the Company’s financial commitments; debt service obligations; growth, operating and maintenance capital expenditures; and to fund dividends to holders of the Company’s Class C common stock. Management continues to regularly monitor the Company’s ability to finance the needs of its operating, financing and investing activities within the dictates of prudent balance sheet management.
Credit Ratings
Credit rating agencies rate a firm’s public debt securities. These ratings are utilized by the debt markets in evaluating a firm’s credit risk. Ratings influence the price paid to issue new debt securities by indicating to the market the Company’s ability to pay principal, interest and preferred dividends. Rating agencies evaluate a firm’s industry, cash flow, leverage, liquidity and hedge profile, among other factors, in their credit analysis of a firm’s credit risk.
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The following table summarizes the credit ratings for the Company and its Senior Notes as of June 30, 2026:
| S&P | Moody’s | ||||||||||
| Clearway Energy, Inc. | BB | Ba2 | |||||||||
| 4.750% Senior Notes, due 2028 | BB | Ba2 | |||||||||
| 3.750% Senior Notes, due 2031 | BB | Ba2 | |||||||||
| 3.750% Senior Notes, due 2032 | BB | Ba2 | |||||||||
| 5.750% Senior Notes, due 2034 | BB | Ba2 | |||||||||
Sources of Liquidity
The Company’s principal sources of liquidity include cash on hand, cash generated from operations, proceeds from sales of assets, borrowings under new and existing financing arrangements, and the issuance of additional equity and debt securities as appropriate given market conditions. As described in Note 7, Long-term Debt, and Note 9, Changes in Capital Structure, to this Form 10-Q, and Item 15 — Note 10, Long-term Debt, and Note 12, Stockholders’ Equity, to the consolidated financial statements included in the Company’s 2025 Form 10-K, and further below, the Company’s financing arrangements consist of corporate-level debt, which includes Senior Notes and the revolving credit facility; facility-level financings for its various assets; the ATM Program and the DSPP.
Goat Mountain Repowering Financing — On February 27, 2026, the Company, through its indirect subsidiaries, Goat Mountain Class B Holdco LLC and Goat Wind LLC, as co-borrowers, entered into a financing arrangement for non-recourse debt for a total commitment of $703 million, which consists of a construction loan that converts to a five-year term loan upon substantial completion of the repowering, as well as bridge loans to be repaid with the proceeds from the tax equity investor. The construction loan and bridge loans bear interest at a rate of SOFR plus 1.50% and mature on the term conversion date. The initial borrowing of $140 million was primarily used to fund costs associated with the Goat Mountain repowering, including payments under the development services agreement, deferred debt issuance costs and capital expenditures. In June 2026, the Company paid the remaining $36 million due under the development services agreement. Under the financing arrangement, the Company borrowed $231 million through June 30, 2026. The Company estimates that its total capital investment in the Goat Mountain repowering will be $200 million, subject to closing adjustments.
2034 Senior Notes — On January 13, 2026, Clearway Energy Operating LLC completed the sale of $600 million aggregate principal amount of senior unsecured notes due 2034, or the 2034 Senior Notes. The 2034 Senior Notes bear interest at a rate of 5.750% per annum and mature on January 15, 2034. Interest on the 2034 Senior Notes is payable semi-annually on January 15 and July 15 of each year, beginning on July 15, 2026. The net proceeds from the 2034 Senior Notes were used to repay $361 million in outstanding borrowings under the revolving credit facility and for general corporate purposes.
Direct Stock Purchase Plan, or DSPP — In January 2026, the Company issued 1,445,244 shares of Class C common stock under the DSPP for gross proceeds of $50 million and incurred fees of less than $1 million, which were exchanged for 1,445,244 Class C units of Clearway Energy LLC. As of June 30, 2026, 1,061,554 shares of Class C common stock remained available for issuance under the DSPP.
Uses of Liquidity
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, Note 7, Long-term Debt, and Note 9, Changes in Capital Structure; and (v) cash dividends to investors.
Capital Expenditures
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.
For the six months ended June 30, 2026, the Company used approximately $159 million to fund capital expenditures, including growth expenditures of $154 million, primarily in the Renewables & Storage segment, funded through construction-related financing. Growth capital expenditures included $72 million incurred in connection with the Honeycomb Portfolio BESS facilities, $51 million incurred in connection with the repowering of the Goat Mountain wind facility, $21 million incurred in connection with the Pine Forest solar and BESS facility and $10 million incurred by other facilities. In addition, the Company incurred $5 million of maintenance capital expenditures, which is net of credits received.
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Off-Balance Sheet Arrangements
Obligations under Certain Guarantee Contracts
The Company may enter into guarantee arrangements in the normal course of business to facilitate commercial transactions with third parties.
Retained or Contingent Interests
The Company does not have any material retained or contingent interests in assets transferred to an unconsolidated entity.
Obligations Arising Out of a Variable Interest in an Unconsolidated Entity
Variable interest in equity investments — As of June 30, 2026, 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 $351 million as of June 30, 2026. This indebtedness may restrict the ability of these subsidiaries to issue dividends or distributions to the Company.
Contractual Obligations and Commercial Commitments
The Company has a variety of contractual obligations and other commercial commitments that represent prospective cash requirements in addition to the Company’s capital expenditure programs, as disclosed in the Company’s 2025 Form 10-K.
Acquisitions and Investments
The Company intends to acquire generation assets developed and constructed by CEG, as well as generation assets from third parties where the Company believes its knowledge of the market and operating expertise provides a competitive advantage, and to utilize such acquisitions as a means to grow its business.
Third-Party Acquisition
Cardinal Portfolio — On March 30, 2026, the Company, through its indirect subsidiaries, Cardinal Purchaser LLC and Cardinal JV Purchaser LLC, completed the acquisition of the Cardinal Portfolio for net cash consideration of $322 million, which includes post-closing adjustments of $2 million. Of the net consideration, $242 million was paid by Cardinal Purchaser LLC related to facilities consolidated by the Company and $80 million was paid by Cardinal JV Purchaser LLC related to facilities held through a joint venture with a third-party investor. The Cardinal Portfolio has a weighted average remaining contract duration of approximately 10 years. The acquisition was funded with $100 million in borrowings under the new financing arrangement entered into in connection with the acquisition, as well as existing sources of liquidity.
In connection with the acquisition, the Company also assumed non-recourse facility‑level debt associated with certain of the acquired facilities. On April 27, 2026, the Company made an early partial repayment of $17 million of the assumed facility-level debt. After factoring in cash acquired, transaction expenses and proceeds from the related financing activities, the Company estimates its net capital investment in the Cardinal Portfolio will be approximately $240 million.
Drop Down Transactions
Honeycomb Portfolio Drop Down — On May 1, 2026, when the Honeycomb Portfolio BESS facilities reached substantial completion, the Company paid $81 million to Clearway Renew as additional purchase price in connection with the Company’s acquisition of Honeycomb TargetCo LLC, or Honeycomb TargetCo, from Clearway Renew, which occurred on October 15, 2025. The Company’s additional purchase price was funded with existing sources of liquidity. The Company’s total capital investment in Honeycomb TargetCo was $97 million. Also, on May 1, 2026, the tax equity investor in Honeycomb TE Holdco LLC contributed an additional $254 million, which was utilized along with the $60 million previously held in escrow, to repay the tax equity bridge loan and to pay associated fees with the remaining proceeds distributed to CEG. Prior to substantial completion being reached, the Company borrowed an additional $71 million in construction loans during 2026, and on May 1, 2026, the total outstanding construction loans were converted to a term loan.
Pine Forest — On January 15, 2026, the Company repaid the $231 million outstanding on the tax credit transfer bridge loan utilizing the proceeds received from the sale of transferable ITCs and distributed the remaining $51 million to CEG, as further described in Note 7, Long-term Debt, and Note 11, Income Taxes.
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Since the Company holds the Class A membership interests in Pine Forest TE HoldCo LLC through its ownership of Pine Forest TE Class A, net loss attributable to Clearway Energy, Inc. reflects HLBV allocations associated with Pine Forest’s tax attributes, including ITCs and accelerated tax depreciation. As a result, larger losses were allocated to the Company in 2026 relative to other partnerships and will continue to be allocated to the Company during the early stages of the facility’s operations. These losses are non-cash in nature and do not impact the Company’s liquidity.
Commodity Contract Restructuring Transactions
The Company completed the following restructuring activities related to certain long-term commodity contracts associated with its wind facilities. In connection with each restructuring, the Company entered into a new 15-year PPA with a commercial or investment-grade counterparty. The new PPAs are fixed-price, unit-contingent arrangements that contract all available output from the applicable facilities, replacing legacy defined-quantity hedge structures that exposed the facilities to volumetric risk and merchant market pricing for a portion of generation. As a result, the new PPAs are expected to reduce volumetric exposure and increase the predictability of future cash flows from the facilities.
Elbow Creek Restructuring — On June 25, 2026, the Company restructured its existing energy‑related commodity contract associated with the Elbow Creek wind facility, which resulted in an in‑substance financing to settle existing derivative liabilities over time. As a result of the restructuring, the Company derecognized derivative liabilities with a fair value of $46 million, as well as $8 million owed to the counterparty that was previously included in other non‑current liabilities. The Company also paid $20 million, which was used to settle the non-current liability and partially settle the outstanding derivative liability, resulting in a term financing obligation with an initial carrying amount of $34 million. The financing obligation is repaid through fixed monthly payments beginning in July 2026 and matures on October 31, 2032. Total payments over the term of the arrangement are $40 million, which implies an effective interest rate of approximately 5.493%.
Langford Restructuring — On June 10, 2026, the Company restructured its existing energy‑related commodity contract associated with the Langford wind facility, which resulted in an in‑substance financing to settle existing derivative liabilities over time. As a result of the restructuring, the Company derecognized derivative liabilities with a fair value of $62 million and recognized a term financing obligation with an initial carrying amount of $62 million. The financing obligation is repaid through fixed monthly payments beginning in July 2026 and matures on June 30, 2033. Total payments over the term of the arrangement are $75 million, which implies an effective interest rate of approximately 5.749%.
Mesquite Sky Restructuring — On March 27, 2026, the Company restructured its existing energy‑related commodity contract associated with the Mesquite Sky wind facility, which resulted in an in‑substance financing to settle existing derivative liabilities over time. As a result of the restructuring, the Company derecognized derivative liabilities with a fair value of $115 million, as well as $12 million owed to the counterparty that was previously included in other non‑current liabilities, and recognized a term financing obligation with an initial carrying amount of $127 million. The financing obligation is repaid through fixed monthly payments beginning in May 2026 and matures on September 30, 2035. Total payments over the term of the arrangement are $162 million, which implies an effective interest rate of approximately 5.436%.
Cash Dividends to Investors
The Company intends to use the amount of cash that it receives from its distributions from Clearway Energy LLC to pay quarterly dividends to the holders of its Class C common stock. Clearway Energy LLC intends to distribute to its unit holders in the form of a quarterly distribution all of the CAFD that is generated each quarter, less reserves for the prudent conduct of the business. Dividends on the Class C common stock are subject to available capital, market conditions and compliance with associated laws, regulations and other contractual obligations. The Company expects that, based on current circumstances, comparable cash dividends will continue to be paid in the foreseeable future.
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The following table lists the dividends paid on the Company’s Class A common stock and Class C common stock during the six months ended June 30, 2026:
Second Quarter 2026 | First Quarter 2026 | |||||||||||||
| Dividends per Class A share | $ | — | $ | 0.4602 | ||||||||||
| Dividends per Class C share | 0.4676 | 0.4602 | ||||||||||||
As a result of the Class A Conversion discussed in Note 9, Changes in Capital Structure, the Company no longer has any Class A common stock outstanding, and holders of the Company’s former Class A common stock converted into Class C common stock remain entitled to receive dividends, if declared by the Company, on the same basis as prior to the conversion.
On August 4, 2026, the Company declared quarterly dividends on its Class C common stock of $0.4750 per share payable on September 15, 2026 to stockholders of record as of September 1, 2026.
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Cash Flow Discussion
The following tables reflect the changes in cash flows for the comparative periods:
| Six months ended June 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| (In millions) | |||||||||||||||||
| Net cash provided by operating activities | $ | 615 | $ | 286 | $ | 329 | |||||||||||
| Net cash used in investing activities | (657) | (398) | (259) | ||||||||||||||
| Net cash (used in) provided by financing activities | (233) | 165 | (398) | ||||||||||||||
Net Cash Provided by Operating Activities
| Changes to net cash provided by operating activities were driven by: | (In millions) | ||||
| Proceeds from transferable tax credits in 2026, primarily from the Pine Forest solar and BESS facility, utilized to repay long-term debt and pay distributions to noncontrolling interests (Financing Activities) | $ | 282 | |||
| Partial buy-down of the Mt. Storm commodity contract in 2025, offset by partial buy-down of the Elbow Creek commodity contract in 2026 | 23 | ||||
| Increase in operating income after adjusting for non-cash items | 20 | ||||
| Increase from changes in working capital primarily driven by the timing of accounts receivable collections and payments of current liabilities, including accounts payable and accrued liabilities | 2 | ||||
| Increase in distributions from unconsolidated affiliates | 2 | ||||
| $ | 329 | ||||
Net Cash Used in Investing Activities
| Changes to net cash used in investing activities were driven by: | (In millions) | ||||
| Payments for equipment deposits and asset purchases from affiliate in 2026 related to the Goat Mountain repowering | $ | (112) | |||
| Investments in unconsolidated affiliates in 2026 related to the Cardinal Portfolio JV | (91) | ||||
| Increase in capital expenditures | (27) | ||||
| Increase in cash paid for third party acquisitions, net of cash acquired | (15) | ||||
| Increase in cash paid for Drop Down Assets, net of cash acquired | (4) | ||||
| Decrease in return of investment from unconsolidated affiliates | (2) | ||||
| Other | (8) | ||||
| $ | (259) | ||||
Net Cash (Used in) Provided by Financing Activities
| Changes in net cash (used in) provided by financing activities were driven by: | (In millions) | ||||
| Increase in (distributions to) contributions from noncontrolling interests, net | $ | (499) | |||
| Increase in payments for the revolving credit facility and decrease in proceeds from the revolving credit facility | (413) | ||||
| Increase in payments of debt issuance costs | (20) | ||||
| Increase in dividends paid to common stockholders and distributions paid to CEG unit holders | (14) | ||||
| Increase in proceeds from issuance of long-term debt and payments for long-term debt | 495 | ||||
| Proceeds from the issuance of Class C common stock under the DSPP in 2026 | 50 | ||||
| Pro-rata distributions to CEG in 2025 | 7 | ||||
| Other | (4) | ||||
| $ | (398) | ||||
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NOLs, Deferred Tax Assets and Uncertain Tax Position Implications, under ASC 740
As of December 31, 2025, the Company had a cumulative federal NOL carryforward balance of $212 million for financial statement purposes, none of which were subject to expiration. Additionally, as of December 31, 2025, the Company had a cumulative state NOL carryforward balance of $100 million for financial statement purposes, which will expire between 2026 and 2042 if unutilized. The Company does not anticipate material income tax payments through 2030. In addition, as of December 31, 2025, the Company had PTC and ITC carryforward balances totaling $18 million, which will expire between 2036 and 2045 if unutilized.
As of December 31, 2025, the Company had an interest disallowance carryforward of $107 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.
The Company, after the utilization of various federal and state NOL carryforwards, paid $3 million of federal and state income taxes during the six months ended June 30, 2026 and does not expect to pay 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.
Federal tax legislation enacted on July 4, 2025 contains a number of revisions to the Internal Revenue Code, including adjustments to the business interest expense disallowance calculation, accelerated tax depreciation and business tax credits and incentives for the development of clean energy facilities and production of clean energy, including wind, solar and BESS facilities. These changes did not have a material impact on the Company’s consolidated financial statements and the Company does not anticipate that these changes will have an adverse impact either (i) on the anticipated pipeline of facilities being developed by the Company’s sponsor, CEG, through at least 2030 or (ii) on the operation of facilities owned and operated by the Company. The Company will continue to monitor future guidance issued by the United States Department of the Treasury to assess for potential impacts on its consolidated financial statements.
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, 2025, the U.S. federal partnership returns of two of the Company’s subsidiaries are under audit by the IRS. The Company and its subsidiaries are also periodically subject to various state tax audits, including one current audit as a result of filing an amended return in order to pursue a potential California tax refund. The IRS has not yet issued any proposed adjustments with respect to the 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.
The Company has an unrecognized tax benefit of $19 million as of June 30, 2026.
Fair Value of Derivative Instruments
The Company may enter into energy-related commodity contracts to mitigate variability in earnings due to fluctuations in spot market prices. In addition, in order to mitigate interest rate risk associated with the issuance of variable rate debt, the Company enters into interest rate swap agreements.
The tables below disclose the activities of non-exchange traded contracts accounted for at fair value in accordance with ASC 820. Specifically, these tables disaggregate realized and unrealized changes in fair value; disaggregate estimated fair values at June 30, 2026, based on their level within the fair value hierarchy defined in ASC 820; and indicate the maturities of contracts at June 30, 2026. For a full discussion of the Company’s valuation methodology of its contracts, see Derivative Fair Value Measurements in Note 5, Fair Value of Financial Instruments.
| Derivative Activity (Losses) Gains | (In millions) | ||||
| Fair value of contracts as of December 31, 2025 | $ | (204) | |||
| Contracts realized, restructured or otherwise settled during the period | 219 | ||||
| Contracts added during the period | 6 | ||||
| Changes in fair value | 79 | ||||
| Fair value of contracts as of June 30, 2026 | $ | 100 | |||
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| Fair value of contracts as of June 30, 2026 | |||||||||||||||||||||||||||||
| Maturity | |||||||||||||||||||||||||||||
| Fair Value Hierarchy (Losses) Gains | 1 Year or Less | Greater Than 1 Year to 3 Years | Greater Than 3 Years to 5 Years | Greater Than 5 Years | Total Fair Value | ||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||
| Level 2 | $ | 31 | $ | 107 | $ | 21 | $ | 3 | $ | 162 | |||||||||||||||||||
| Level 3 | 2 | (19) | (32) | (13) | (62) | ||||||||||||||||||||||||
| Total | $ | 33 | $ | 88 | $ | (11) | $ | (10) | $ | 100 | |||||||||||||||||||
The Company has elected to disclose derivative assets and liabilities on a trade-by-trade basis and does not offset amounts at the counterparty master agreement level.
Critical Accounting Policies and Estimates
The Company’s discussion and analysis of the financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements and related disclosures in compliance with GAAP requires the application of appropriate technical accounting rules and guidance, as well as the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. The application of these policies necessarily involves judgments regarding future events, including the likelihood of success of particular facilities, legal and regulatory challenges and the fair value of certain assets and liabilities. These judgments, in and of themselves, could materially affect the financial statements and disclosures based on varying assumptions, which may be appropriate to use. In addition, the financial and operating environment may also have a significant effect, not only on the operation of the business, but on the results reported through the application of accounting measures used in preparing the financial statements and related disclosures, even if the nature of the accounting policies has not changed.
On an ongoing basis, the Company evaluates these estimates, utilizing historic experience, consultation with experts and other methods the Company considers reasonable. Actual results may differ substantially from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the information that gives rise to the revision becomes known.
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.
Recent Accounting Developments
See Note 2, Summary of Significant Accounting Policies, for a discussion of recent accounting developments.
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ITEM 3 — Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to several market risks in its normal business activities. Market risk is the potential loss that may result from market changes associated with the Company’s power generation or with an existing or forecasted financial or commodity transaction. The types of market risks the Company is exposed to are commodity price risk, interest rate risk, liquidity risk and credit risk. The following disclosures about market risk provide an update to, and should be read in conjunction with, Item 7A — Quantitative and Qualitative Disclosures About Market Risk, of the Company’s 2025 Form 10-K.
Commodity Price Risk
Commodity price risks result from exposures to changes in spot prices, forward prices, volatilities and correlations between various commodities, such as electricity, natural gas and emissions credits. The Company manages the commodity price risk of certain of its merchant generation operations by entering into derivative or non-derivative instruments to hedge the variability in future cash flows from forecasted power sales. The portion of forecasted transactions hedged may vary based upon management’s assessment of market, weather, operation and other factors.
Based on a sensitivity analysis using simplified assumptions, the impact of a $0.50 per MWh increase or decrease in power prices across the term of the long-term power commodity contracts would cause a change of approximately $1 million to the net value of the related derivatives as of June 30, 2026.
Interest Rate Risk
The Company is exposed to fluctuations in interest rates through its issuance of variable rate debt. Exposures to interest rate fluctuations may be mitigated by entering into derivative instruments known as interest rate swaps, caps, collars and put or call options. These contracts reduce exposure to interest rate volatility and result in primarily fixed rate debt obligations when taking into account the combination of the variable rate debt and the interest rate derivative instrument. See Note 6, Derivative Instruments and Hedging Activities, for more information.
The Company and most of its subsidiaries enter into interest rate swaps intended to hedge the risks associated with interest rates on non-recourse facility-level debt or any potential refinancing of the Senior Notes. See Item 15 — Note 10, Long-term Debt, to the Company’s audited consolidated financial statements for the year ended December 31, 2025 included in the 2025 Form 10-K for more information about interest rate swaps of the Company’s subsidiaries.
If all of the interest rate swaps had been discontinued on June 30, 2026, the counterparties would have owed the Company $158 million. Based on the credit ratings of the counterparties, the Company believes its exposure to credit risk due to nonperformance by counterparties to its hedge contracts to be insignificant.
The Company has long-term debt instruments that subject it to the risk of loss associated with movements in market interest rates. As of June 30, 2026, a change of 1%, or 100 basis points, in interest rates would result in an approximately $3 million change in market interest expense on a rolling twelve-month basis.
As of June 30, 2026, the fair value of the Company’s debt was $8,787 million and the carrying value was $9,141 million. The Company estimates that a decrease of 1%, or 100 basis points, in market interest rates would have increased the fair value of its long-term debt by approximately $317 million.
Liquidity Risk
Liquidity risk arises from the general funding needs of the Company’s activities and in the management of the Company’s assets and liabilities.
Counterparty Credit Risk
Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. The Company monitors and manages credit risk through credit policies that include: (i) an established credit approval process; and (ii) the use of credit mitigation measures such as prepayment arrangements or volumetric limits. Risks surrounding counterparty performance and credit could ultimately impact the amount and timing of expected cash flows. The Company seeks to mitigate counterparty risk by having a diversified portfolio of counterparties. See Note 5, Fair Value of Financial Instruments, to the consolidated financial statements for more information about concentration of credit risk.
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ITEM 4 — Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of the Company’s management, including its principal executive officer, principal financial officer and principal accounting officer, the Company conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as such term is defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act. Based on this evaluation, the Company’s principal executive officer, principal financial officer and principal accounting officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.
Changes in Internal Control over Financial Reporting
During the first quarter of 2026, there were changes in internal control over financial reporting, specifically, modifications to certain existing internal controls and implementation of new controls and procedures as a result of CEG’s successful implementation of a new enterprise resource planning, or ERP, application to support its core business processes and data. The Company continues to evaluate the operating effectiveness of impacted internal controls and will continue to monitor and refine its internal control environment as appropriate.
Other than the matter described above, there were no changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II — OTHER INFORMATION
ITEM 1 — LEGAL PROCEEDINGS
None.
ITEM 1A — RISK FACTORS
Information regarding risk factors appears in Part I, Item 1A, Risk Factors, in the Company’s 2025 Form 10-K. There have been no material changes in the Company’s risk factors since those reported in its 2025 Form 10-K.
ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 — DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 — MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5 — OTHER INFORMATION
Insider Trading Plans
During the three months ended June 30, 2026, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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ITEM 6 — EXHIBITS
| Number | Description | Method of Filing | ||||||||||||
| 3.1 | Incorporated herein by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed on May 1, 2026. | |||||||||||||
| 4.1 | Incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 13, 2026. | |||||||||||||
| 4.2 | Incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on January 13, 2026. | |||||||||||||
| 4.3 | Incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on May 1, 2026. | |||||||||||||
| 9.1† | Incorporated herein by reference to Exhibit 9.1 to the Company’s Registration Statement on Form 8-A/A filed on April 29, 2026 (File No. 001-36002). | |||||||||||||
| 10.1 | Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 2, 2026. | |||||||||||||
| 31.1 | Filed herewith. | |||||||||||||
| 31.2 | Filed herewith. | |||||||||||||
| 32 | Furnished herewith. | |||||||||||||
| 101 INS | Inline XBRL Instance Document. | Filed herewith. | ||||||||||||
| 101 SCH | Inline XBRL Taxonomy Extension Schema. | Filed herewith. | ||||||||||||
| 101 CAL | Inline XBRL Taxonomy Extension Calculation Linkbase. | Filed herewith. | ||||||||||||
| 101 DEF | Inline XBRL Taxonomy Extension Definition Linkbase. | Filed herewith. | ||||||||||||
| 101 LAB | Inline XBRL Taxonomy Extension Label Linkbase. | Filed herewith. | ||||||||||||
| 101 PRE | Inline XBRL Taxonomy Extension Presentation Linkbase. | Filed herewith. | ||||||||||||
| 104 | Cover Page Interactive Data File (the cover page interactive data file does not appear in Exhibit 104 because its Inline XBRL tags are embedded within the Inline XBRL document). | Filed herewith. | ||||||||||||
† Schedules and similar attachments to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the U.S. Securities and Exchange Commission (the “SEC”) upon request.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CLEARWAY ENERGY, INC. (Registrant) | ||||||||||||||
| /s/ CRAIG CORNELIUS | ||||||||||||||
| Craig Cornelius | ||||||||||||||
President and Chief Executive Officer (Principal Executive Officer) | ||||||||||||||
| /s/ SARAH RUBENSTEIN | ||||||||||||||
| Sarah Rubenstein | ||||||||||||||
| Date: August 5, 2026 | Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |||||||||||||
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