For the second quarter of 2019, Clearway Energy Inc. (NYSE: CWEN) reported a net loss of $36.0M, Adjusted EBITDA of $278.0M, Cash from Operating Activities of $89.0M, and CAFD of $68.0M, which includes adjustments to reflect CAFD generated by unconsolidated investments that are unable to distribute project dividends due to the PG&E bankruptcy. Net Income was lower than the second quarter of 2018 due to non-cash changes in the fair value of interest rate swaps, a non-cash asset impairment charge in the Thermal segment, weaker renewable energy conditions, and the June outage at the CVSR facility. Adjusted EBITDA results were lower than 2018 primarily due to weaker renewable energy conditions and the CVSR outage, but partially offset by the contribution of growth investments. In the second quarter, CAFD results were lower than 2018 primarily due to lower Adjusted EBITDA and the expiration of network upgrade reimbursements.
Liquidity and Capital Resources:
Total liquidity as of June 30, 2019 was $746.0M, $291.0M lower than as of December 31, 2018. This reduction was primarily due to the repayment, with cash on hand, of $220.0M in outstanding 2019 Convertible Notes, $19.0M for the buyout of the Wind TE HoldCo tax equity partnership in January 2019, and $27.0M for growth investments, including Duquesne, Mylan, Hawaii Solar Phase I, and ongoing contributions to the DG Investment Partnerships. Borrowing capacity under the revolving credit facility was reduced by $4.0M due to the issuance of corporate letters of credit.
The Company’s liquidity includes $203.0M of restricted cash balances as of June 30, 2019. Restricted cash consists primarily of funds to satisfy the requirements of certain debt arrangements and funds held within the Company’s projects that are restricted in their use. As of June 30, 2019, these restricted funds were comprised of $60.0M designated to fund operating expenses, approximately $45.0M designated for current debt service payments, and $42.0M of reserves for debt service, performance obligations and other items including capital expenditures. The remaining $56.0M is held in distribution accounts, of which $36.0M related to subsidiaries affected by the PG&E bankruptcy.
Potential future sources of liquidity include excess operating cash flow, the existing ATM program, of which $36.0M remained available as of August 6, 2019, availability under the revolving credit facility, and, subject to market conditions, new corporate financings.
2019 Financial Guidance:
The Company is reducing its 2019 full year CAFD guidance to $250.0M to account for the previously disclosed impact of the CVSR outage in June and year to date renewable resource performance. This financial guidance assumes that all CAFD related to the projects impacted by the PG&E Bankruptcy is realized in 2019 and Mylan and Hawaii Solar Phase I achieve target commercial operational dates. Financial guidance for 2019 also continues to be based on median renewable energy production estimates for the remainder of the year.
