CWEN - Earnings call transcript Q4 2018

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Operator

Good morning, ladies and gentlemen, and welcome to Clearway Energy, Inc.’s Fourth Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference over to your host Mr. Chris Sotos, President and Chief Executive Officer.

Chris Sotos

Thank you, Sylvia. morning. Good

you to thank today’s taking for me join time call. Let

Energy Plotkin, this Cornelius, financial Clearway presentation. be morning of me Q&A our for President Craig the available is CEO Craig Joining our as Chad chief portion will well officer and Group. as

review contain that this begin, we Please we well today’s differ be as of will believe Actual in to which results are materially. that today’s quickly factors to safe Before statements, note based day. presentation may the like as filings. discussion in I’d harbor forward-looking the on assumptions reasonable SEC our as risk

will we addition, measures. GAAP refer In and non-GAAP financial to both

regarding directly to information For measures, measures today’s non-GAAP the comparable presentation. and most reconciliations please our financial GAAP refer to

four; to of ahead million. of for I’d for XXXX, generated Energy Page EBITDA highlight Clearway guidance year on CAFD $XXX like full $XXX and adjusted recap to of that our million, Turning

in a capital year CAFD a new which growth undergoing at platform we was $XX in deploy sponsor, During to yields. new transformation million Clearway with accretive the a managed

in corporate raised to capital the $XXX of account take million offers balance as new managed also We growth into to fund sheet tender our results maturities. well as over and this our

period discussed uncertainty Looking the our this primary XX created the near manage bankruptcy. in forward focus by PG&E term and of to business XXXX, as through platform in February the the update call, is to

by be lower to was would million the preserve normalized generation. $X.XX million, share, our to GIP of CAFD to facility, our primarily Once long-term deployed $XXX still reducing with PG&E capital guidance inclusive XXXX. projects commensurate our with quarterly able by projects; while maintaining divide our commitments period backstop with the of situation clears, flexibility. sheet PG&E while $XXX our per over contributions are to to capital CAFD our level million, group during Board this dedicating $XX of we’re Clearway its capital utilizing revisit We share balance related Energy per the dividend also unfolds from

period debt We debt near-term limited this due with also $XX enter of of only with corporate in XXXX. million uncertainty maturities

through and work critical, the me, Phase gigawatt the long-term for to by demonstrated projects This of our focus a through the has relates NRG as process continued by on their growth continued of partnership. is as XX development the sponsor, especially as by excuse expanding advancement building anticipate it their pipeline pipeline spend GIP Clearway in our Hawaii acquisition repowering II on X for ROFO we from As from – Carlsbad XXXX, CWEN. support Phase megawatt Hawaii well XXXX, future than million Clearway $XX Energy; our Group; been CODs purchase II backstop greater at the with

the identical anticipated Turning At overview two pipeline the the in any session our with durations our five, to work Q&A XXXX. to development. Hawaii projects PPA level. about particularly are CODs on to will this Energy, excited strong long-dated on Group Page XX provides ROFO and around an of is February addition available one utilized Craig be the going of slide at questions call, we the on Inc., Clearway development and additional for

Chad? Chad, to over it Turning

Chad Plotkin

you, Thank Chris.

of Turning of $XX to Slide reporting and or for million seven, cash CAFD $XXX Clearway million. distribution fourth EBITDA quarter is available adjusted

adjusted reporting million. million the of of CAFD Company and EBITDA $XXX is the For year, full $XXX

across during portfolio, the were year renewable and materially quarter. While strong fourth wind conditions energy offsetting solar the quarter wind weak the third performance realized the full guidance, with results in-line in prevailed

the segment. impacted two quarter Additionally, conventional at fourth an outage at Walnut Creek unit results

due the comprehensive XXXX. service amended agreement executed to overall Company the was terms in the cost to mitigated However, of

tendered financing, an convertible lower to outage Additionally, related additional for due during the from offset new the to notes quarter. interest provided resulting and timing corporate this expense

sponsor, year million corporate In GIP capital, full achieving the XXXX and an XXXX. the Company funding new million its to as to the realized now new million handle $XXX our support amount in objectives, $XX committed sufficient maturities raised retired accretive growth investments in corporate existing $XXX invested and financial in of addition growth capital the in

acknowledge So Company while moment work our joined the want has forward its helping over the Company in impacted months outlook, take meet situation the have objectives. the new I PG&E past a that the to many thank near-term colleagues few our and and hard

Phase raised – to of update median XXXX Now, guidance the on which forward million February that XXXX. TE business are on segment, growth guidance in the I, forma conditions DG slides partnership On in let’s during impact investments complete to CAFD in the factors $XXX equity This turn year, project million. the reaffirming energy Partnerships few our XX next Company points plans PXX outlook and renewable pro today the updated $XXX January. in Solar for Friday our and thermal of new we the call. the outlook tax ongoing closed investments from buyout and Wind CAFD Based of the the the some HoldCo Mylan forward recap Hawaii full includes to our

in allocation when factored As timing have to exercised. due we our February contribution presented close due not been now of the backstop this Carlsbad, a on will plan reminder, capital Company and any has GIP to equity acquisition uncertain from that the the adjusted XX,

projects report expectations expect projects to to which full the for our even financial the XXXX that year PG&E our made $XX restrictions, we because CAFD on subject CAFD. On impacted the the to invoice point, PG&E sign. by will perform a if expected did positive include discussed, by see million are from also continue From have revenue payments as of projects been we we on the bankruptcy. in that we associated previously these post-petition As view distribution normal course, projects perspective,

you remind do to of relates it the between investments. to unconsolidated As and want difference we consolidated reported CAFD,

project during the sheet. on if restricted, restricted meaning would is For Company’s be are CAFD consolidated results cash associated cash account the would level quarter, the in the reflects the reflected on balance and still visible distributions be the accrued projects, CAFD what

However, for associated the generally be on Sunlight are important projects, in actual received. from projects in CAFD results sheet. distributions, visible consolidated reflects distinction the would booked balance Agua Desert because unconsolidated distributions if making be interest as would is not restricted the Company’s Reported Caliente. the This such technically CAFD cash nor trapped or

as perform, operationally sheet. a to have were would give As have received. and our what if to allocation the since investments assuming relative expectations distributions to is available evident PG&E by for these view is for will to provide Company such, provide and cash go-forward to on otherwise This unconsolidated basis CAFD what perspective intention continues been cash would on how performing this balance the projects the not been are the a

trapped a of including to Now adjusted let’s impact has for nine balance any Company’s This table cash and unconsolidated and of projects of overall cash. summarize release. cash early Slide provided corporate provides sheet the the liquidity earnings related account two excludes uses to the the table forma as snapshot XXXX. company’s in been liquidity in today’s pro

since buyout consolidated the account accounts or would of million. this Upon credit the the and held areas that the various project January. chart, notes account in under perform for compliance are the build that we been cash impacted have holds of Specifically, fold, to HoldCo we $XX use $XXX the no convertible from used or non-recourse In the In in $XX million if related distribution the key and covenant, capital repayment this service project-level to as restricted project partnership is the tax cast by meeting outstanding then allocation regard, provide in the applicable. the agreements. equity three are until Wind level compliance XXXX TE debt available of PE& such normal for projects anticipating distribution met distribution HoldCo overtime longer be course, by In covenants corporate restricted the are projects this cash, including the lenders. reserves will G distributions in until restricted million

cash undrawn, liquidity in fund revised as of accounts Despite impact, Company you can by revolver adequate end total capital the million. was distribution impacted to PG&E restricted this held its the with the plan. see, allocation completely $XX maintains As XXXX, at

to continue I’ll on closing turn update back regular his a With Chris this that, to basis. will for it provide remarks. We

Chris Sotos

Thank to requirements. summarize strengthen capital pleased fund you, Energy, Chad. results growth We $XXX Turn the and were to $XX page and platform, raised our over Clearway our XX. acquisitions In to platform delivered. in to I’m a balance year exceeded able deploy transformational accretive Clearway million The CAFD growth we for guidance. million in new sheet successfully to year full

on which GIP, a for the to transition we we the robust, strong completed, come. and forward a a minimal cost, as to platform successfully sponsor Finally, shareholders the PG&E and financial are given to And line platform in of the with new, more accretive sheet looking view in years' positive on XXXX, focused by most friction Clearway commitments, the working flexibility goals situation an through basis. California, in continuing situation balance while the way grow funding the maintaining effective possible to in our

to growth remaining existing accretive platform, hitting want period, and million items the this that we’ve that and to ensure progress capital CAFD want continuing in growth already investments and Clearway $XXX the from new addition to all improving complete. to the intend platform. I at also to do execute but of simply of to finding on integration stasis stress finalize separation sources deployment investors and efficient during support is on to wait In transition of NRG not we to our across focus our the discussed, rather of we guidance,

our assumed, and per Our this with for long-term and with goal our the distributed, line CAFD/ period is with in positive objectives. please reignited growth open contracts line questions. to Thank share dividend conclusion emerge a Operator, from you. cash

Operator

first Colin Your from from question Instruction] [Operator Rusch Oppenheimer. comes

Colin Rusch

much so guys. Thanks,

how for storage it that some additional a Now while, would how existing your or and with integrate that little happen? happen of that you to have been at to how for energy look Clearway likely integrated would be likely facilities into you’ve done

Chris Sotos

– Chris this is from Sotos. think I

have in as the storage our from that. think, with XXXX; Hawaii projects energy of I part perspective, two new CODs both

those projects; because perspective. put to emphasized, I additional think footprint of capital of a be where that we existing something not from to sit just for and tends in kind that cost

probably those of answer looking That’s in new to Hawaii as in elements at have baseline the part it. our question, XXXX, platform. So your CODs projects

lot a seen haven’t storage… of to-date to opportunities We include

Colin Rusch

you it look XX% on you all-in? then, what a on of you an And in or a plus minus – portfolio much the plus/minus is that, on at – guys as you when terms plus it know looking at on are that PXX below basis, or are Is calculation, Great. average?

Chris Sotos

don’t [indiscernible] you we know Chad, I mind. have in if sensitives the

Chad Plotkin

PXX. or That’s I X%, think the elected. so the Colin, know generally provide sensitivity to you we Yeah, just minus we or plus that PXX on equates sensitivity

I it, think side. are think we where a per periods if of the above will there But basis, look and time it’s as you think especially I about beyond on that, quarterly wind you about year. more the averaging go on

you going to So entire any at X% look move for be if quarter. moves maybe a sensitivities, year of like, individual higher like than the sort of our is a combination

could was in-line year. – it we averaging quarter you with the PXX the that means in of out So fourth target if were very wind was where weather it the fourth balance know for which quarter for far you an will. overall on definitely more But was basis on the than you our see year, challenging

Colin Rusch

thanks right, All guys.

Operator

Lapides of from next Your Goldman Sachs. from comes Michael question line the

Michael Lapides

California potentially California you or do ROFO thinking diversify need at other to Hey in to benefit accretion/dilution make to the valuation, equity and how see the your equity on guys, is meaning overhang a how related would California, get you potential work what’s wait curious, and current are with stuff also Company equity or to the whether there to going do value the in whether stuff the obviously math before just – can valuation, you valuation about in anything? marketplace the do you of resolved either you outside but

Chad Plotkin

bit. unpack your thanks a couple Sure, to to a so little kind try in question is of questions There of there, Michael.

California. I first can exception of as the from see ROFO you in terms basically all, think assets, with Carlsbad outside pipeline, of tend of obviously, those to of the diversification; be

I to California tend an outside to Craig’s ways, when So would look in they of ability basis, at a they if so. the team, the think, have on do look lot equivalent development,

robust most However, be all to think fair, renewable the aware, we’re as well I has standard. portfolio California

a want little is, to bit be so to bit say don’t be in California. renewable in want the And it’s if tough you business, to you little

But United corporate to robust is there that question; to kind PPA long-term tend and of versus second kind we we that tend look California I speak, to therefore that’s the interim at IRR, basis said, So standard outside equity of fund always were we revolver, think to of through that and hey, within invest equity the your is the portfolio on States I structure and from think EBITDA then if to at these trying dollar basis identical of identical assets some you other project using long-term outside to our fair I most a of would really of the you’ve Michael, seen then question are. around saying renewable and perspective, the and accretion/dilution, part has historically To why kind of an as cash X.XX basis acquisitions a on think your California how diversify want our we look to question, capital tenures, risk you where of a lot it it. it. California a under the be as then on in fund supply, in the debt-to-corporate emphasis, to and a PPAs so and about of

the equity I to stay to during about be basis. were equity PG&E question, pendency if $XX I issue level think reluctant accretive a we’d at very obviously the of process; your an on think the while

would to valuation be think the basis. that the our the increase of interim a contracts with think intend on I kind view we’d However, and stock intact, those then our acquisitions that side equity I value, out finance markets and basically appreciate we’ll of long-term this given would would will our other more come assumed capital

Michael Lapides

Thank it. Got you much guys, appreciated.

Operator

further at any no gentlemen [Operator Instructions] remarks? are show there time, I questions this And other

Chris Sotos

just updating you. we’ll your time Thank No, to you to in look wanted May. thank forward everyone and for

Operator

day. a you Ladies wonderful and gentlemen, Thank your concludes conference. Have for today’s this participation.

You disconnect. now may all

Clearway Energy (CWEN) 28 Feb 192018 Q4 Earnings call transcript