View:
United States securities and exchange commission logo
May 20, 2021
Chad Plotkin
Chief Financial Officer
Clearway Energy, Inc.
300 Carnegie Center
Suite 300
Princeton, NJ 08540
Re: Clearway Energy,
Inc.
Form 10-K for the
Fiscal Year ended December 31, 2020
Filed March 1, 2021
File No. 001-36002
Dear Mr. Plotkin:
We have reviewed your filing and have the following comment. In
our comment, we
may ask you to provide us with information so we may better understand
your disclosure.
Please respond to this comment within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this comment, we may have additional comments.
Form 10-K for the Fiscal Year ended December 31, 2020
Management's Discussion and Analysis of Financial Condition and the
Results of Operations
Consolidated Results of Operations, page 53
1. We note your disclosure
indicating that your gross margin measure represents "operating
revenues less cost of
sales" although you also indicate that cost of sales includes only the
cost of fuel, contract
and emission credit amortization and mark-to-market adjustments for
economic hedging
activities. You identify this measure as the most comparable GAAP
measure to your
non-GAAP Economic Gross Margin measure, and provide a
reconciliation between
these measures with adjustments to add back the amounts deducted
from revenues in
computing your measure of gross margin, except for the cost of fuel.
However, it appears
that you have excluded from your computation of gross margin other
costs that would be
attributable to cost of sales under GAAP, which would indicate this is
also a non-GAAP
measure. For example, we understand that one component of your Cost
Chad Plotkin
Clearway Energy, Inc.
May 20, 2021
Page 2
of Operations, as reported on the Statements of Operations on page 81,
in the segment
disclosures on pages 127 and 128, and in Selected Financial Data on
page 45, is
Operations and Maintenance expense, which includes the costs of
services to operate and
maintain plant operations, businesses and thermal facilities. The cost
of sales referenced
in your description of gross margin also excludes depreciation,
amortization and accretion,
a portion of which would relate to facilities utilized in your revenue
generating activities.
If believe that you have properly identified all cost of sales in your
computation of gross
margin, tell us how you have arrived at this view and submit a
detailed description of the
amounts classified on each of the line items reported in your
Statements of Operations.
Otherwise, it appears that you will need to revise your filing to
distinguish the non-GAAP
gross margin measure that you have presented from the gross margin
measure that would
be calculated in accordance with GAAP.
Specifically, you should (i) recalculate gross margin to reflect all
costs of sales as would
be reported in accordance with GAAP, (ii) choose an alternate label
for your non-GAAP
gross margin measure, and (iii) provide a reconciliation between gross
margin in
accordance with GAAP and your non-GAAP measure, for each non-GAAP
margin
measure that you present. Please refer to Item 10(e)(1)(i)(A), Item
10(e)(1)(ii)(E), and
Item 10(e)(1)(i)(A) and (B) of Regulation S-K, if you require further
clarification or
guidance. This comment also applies to the disclosures of Clearway
Energy LLC.
2. We note that you have disaggregated your Cost of Operations measure in
MD&A to
identify the components Cost of Fuels, Operations and Maintenance, and
Other Cost of
Operations. Given your presentation in the Statements of Operations on
page 81, tell us
how Cost of Operations may be similar to Cost of Sales, and how you
considered the
guidance in SAB Topic 11:B, as may be applied to your measure. Please
expand your
disclosures in the financial statements to include a description of
the costs reported within
Cost of Operations, including each of the three subcategories
identified in MD&A.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Mark Wojciechowski, Staff Accountant, at (202) 551-3759
or Lily
Dang at (202) 551-3867 if you have questions regarding comments on the
financial statements
and related matters.
FirstName LastNameChad Plotkin Sincerely,
Comapany NameClearway Energy, Inc.
Division of
Corporation Finance
May 20, 2021 Page 2 Office of
Energy & Transportation
FirstName LastName