CWEN - Earnings call transcript Q4 2020

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Operator

Good morning ladies and gentlemen and welcome to the Clearway Energy Inc. Fourth Quarter 2010 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call may be recorded. to conference like host, to now Mr. would turn over the your I and Energy. of Sotos, CEO Chris President Clearway

Christopher Sotos

Thank you. Good morning.

Let me join to the taking first thank today's you call. for time

Akil Plotkin, Joining Cornelius Craig our for CEO Craig Chief me the is Group. and Investor Chad Energy be this Financial Manager morning President Officer; presentation. will Marsh, Clearway and Q&A our Relations of our available portion

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

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

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

Clearway our X% of XXXX, projects upper for execute We $X.XXX full commit target to in has a or for to and first Whether begin, per term end for first you our Clearway the invested to platform the Page partners quarter the invest or with four, also to Turning the a billion past XXXX success $XXX and bankruptcy our of for growth COVID-XX. the formation. across now global managing growth year the dividend its before million positioned enterprise colleagues company all the which of thank to was the in further million track want Clearway the X% year. in for PG&E share navigating $XXX impacts of CAFD making and resumed in across I X.X% to of our the increase say Clearway to through growth on and I pandemic, effect Financially, the included approximately year through growth. the it achieved company. capital full executed the long $X.X

strong in weather between This as is or or potential did challenge $XX ERCOT million settlements, our depending final outlook as state unprecedented projects ever, early contractual certain term of XXXX face expected an long events counterparties, is with market. an the discussions any on impact $XX the our While in to sponsored have of actions. to million, event due

resiliency significant, not events, to through In is these be and today. a affect with has growth already company While management the combination shortfall to resilient colleagues. the enhance impact are we proven does expectations target the risk company's very CEG Clearway liquidity, fleet to working and the is and of overall initiatives manageable which EPS reaffirming response to our

I discussing I Before incredible efforts I weather be of did the of event, team. if Texas move on not from highlight would impact operations financial the the our remiss

of sector, operators are footprint damage restart to XXX journey the nearly other from the this December. there of Caliente. strong asset Texas long supporting interest our assets accretion employ our was large of states the a contract critical. in term driven additions to co-investment share from acquisitions, of was of many by also announced having diversified per is remaining for long to in which average these yearly am to and team the outlook driven Each share result in lives through on in so to forma travel, in third to with an since its Texas. improved of the help execution in CAFD the term by pro third put increase Agua acquisition lights CAFD while party last growth and call, the climb Longer XXXX Growth GW namely portfolio Clearway back X.X to Storm, the November towers Mount anticipated from temperatures to to in troubleshoot close first and execution I half grateful facilities that of our per year. increase new announced $X.XX the subzero share earnings previously This While advantages just of ability per we in the has sites quarter of $X.XX company's announced XXXX is commitments portfolio.

these and to add Clearway's In portfolio stable assets a value in diversification addition, creating factors are CAFD. which scale of and important

the components, our will X% XXXX growth Southwest working we Northwest are wind which are projects. $X.X we to with year. are type commitment Looking of fleet increased for our forward mix the next and projects X% now It colleagues construct stage for to renewable and years. structuring last a construct diverse work could addition Group even resource those we late has adding of wealth co-investments. we GW per the our well of into after see span on staging to Clearway XXXX, solar, align forward. the capital towards optimized capital next and its have optimized to Group to Pacific closings going with of a XX.X development we portfolio state plant and growth that the to including to platform of comprise to between and additional profile, Group to on spanning completed these technology. tailored coming With Clearway at California, supplement in projects is projects a XXXX customers, profile a Clearway our dividend the its These pipeline X.X including the investment is opportunities battery Clearway GW of With set co-investment GW accounting as pipeline sustain through that based GW the need and for storage share projects X.X to roadmap technology contract for geographies, development opportunity the and the expected

since five, two our acquisitions the third to Turning want third highlight party Page announced we I call. quarter to

Agua XX% by a First, Clearway -- XX% yield. Caliente, CAFD XX-year in X.X acquired NRG's of asset remaining the underpinned remaining ownership a PPA providing

very long excited to tenured add a PPA understood attractive We being able such at well economics. are asset about and

cost is operational XXX This the generates the particular Rock its projects. wind our XX.X%. will MW of the Pinnacle to CAFD Wind acquisition Mount with purchase the footprint the XX-year located of project to This near a MW looks scale yield Black and with in optimize XX region. XXX leveraging operational hedge Clearway transaction MW energy and leverage underpinned benefits addition, from a In of be which the diversified Storm

continued portfolio in success at closing third-party While look continuing acquisition be never look can to our we to to expand sure, opportunities efficiently.

the activities to Turning our overview this since provides Page of six, XXXX. of an investment start

are XXXX expertise over out by XXXX end expected to XX With discussion announced Chad? committed These X% XXXX, As yield previously. those nearly our reach for see, Through asset terms particularly generating the growth, have to since our $XXX growing outlook capital CAFD. years. investments, of path are per $X to versus XX.X% forward the the we at for ratio. pro I'll the through increase can investments, generate on per our combination a to visible share million contract level CAFD track and you of we our approximately third operational and CAFD investments by of of but a billion to backed quality X% in announced that, These in $X.XX quarter $X.XX average of approximately to leveraging we Chad. weighted of that turn EPS dividend also share XX% allows XX% to importantly life targeted goals of these forma now show deploy payout

Chad Plotkin

Chris. you, Thank

distribution approximately company's results outlook. million CAFD. X, Clearway an reporting our These to or Slide of Starting I'll where to quarter provide million. for an with to CAFD overview XXXX and is $X.XX update cash million the available for fourth year EBITDA of XXXX of $XX EBITDA $XXX XXXX, and bring Turning full $XXX XXXX today adjusted results billion adjusted and

During and quarter, lower as as of several costs from operating efficiencies fourth equity the distributions method across higher the the investments improved company realized well its portfolio.

primarily El December ranges and for portfolio. portfolio outage those the while weakness, guidance, persisted is which expected within weigh moderate company's below sensitivity the the Overall, $XXX during results. to from full Segundo the However, year down within the were gas an variance million at did results wind original XXXX project

and company program. efficient During continued its XXXX progress objectives through allocation capital term disciplined long the its capital in formation to

the the disposition of year, formed and billion through project issuances, company optimization, the bond debt During capital program, green utilization $X.X assets. nonstrategic the ATM in through of approximately level additional

year. able gain had access dividend in Through X% ability company growth our its accretion. capital been to CAFD the PG&E able reset its to the commitment to the trajectory due the sheet to $XXX of through has bankruptcy. million was company excess to achieve has the end per target of the cash a that in to dividend the bankruptcy to balance to was upper and resolution investments its in through PG&E to upon to end trapped the reach manner and on leading of targets provided this a these maintained Additionally, This our X% support share efforts, the growth allocate Clearway

$XX acquisition, Clearway a Storm as million the XXXX Now to has well. the with path Mount placing the company investment million meet beyond growth XXXX of to $XXX growth in on beginning since objectives our pending committed

upon operations. CAFD quarter is the when realized commercial recall, of results, achieve for comments last Moving when the dependent into projects to expectations the get our my From XXXX. timing company's from investments growth

further meaningful expected in to the is as the on discussed acquisition previously XXXX showing growth does So next contribution to pro with pending CAFD from our and the Storm our its forecast upside Mount full not forma not update factor includes the is investments. outlook. mentioned, XXXX in to lead This relative committed slide a that company's to

full With company Caliente the to closing increase its CAFD XXXX the February, in Agua was guidance. transaction of the expecting year

We outside ranges. full resource West company's in the view diversified have resource an that normal ERCOT as our performance the portfolio, annual scope can estimated certain during or February, as Coast While conditions such observed the year exposure results we sensitivity from matters across operational February what renewable insulate projects. event financial the at note median above we of expectations company's on from the the

estimated Given are in we related factoring the dynamic, to into expectations. the full this event impact financial ERCOT year now

our at to XXXX today allow an CAFD growth. still $XXX meet expected sufficient its million guidance amount So are dividend we to the company maintaining

our also to we temporary and This relative discuss on adjusted and quarter say third portfolio Furthermore, amount COD. $XXX believe the at November incremental the growth what average projects event Slide These that outlook time quarterly the update execution the indicated the February outlook now renewable Caliente GW upon pro all announced in to are turn captured when CAFD $XX and expected XXXX forma the we was in for to company matters and our growth based was see as we company's improve. forma million. the we segment Mount pro reach call, commitments, CAFD. to timing amount million COVID-XX earnings the With now as Agua the Storm the of are recall, last commitments alone related now that X Let's has and variances Since CAFD In are XXXX, thermal to to has to in COD. Texas. acquisition. to exposure the pleased in such those of level this achieving would new transaction, continued asset projects deliver the co-investment the X.X investments company five-year annual company's the

be approximately As to to new assumption assuming the need yield portion interest noted to of of the in ratios the make for debt. an we our these which range of target would chart, a financing of X.X% million cost additional because this corporate X.X% based fund transactions, expense on in permanent debt will capital $X leverage formed

our level Chris asset growth the amount an with an back goals. in investments, see the of now with committed of turn we I'll over $XXX closing combined XX% updated the million CAFD when increase from long-term forma continues outlook potential CAFD that total growth CAFD remarks. an new support dividend to So that, With to for pro call

Christopher Sotos

Thank you, Chad.

long-term year. our recycling debt, nearly of Page supporting additional the recapping executed within range dividend and on nonrecourse to targets. growth Clearway $XXX XXXX, Energy or capital pro CAFD investments with the plans XXXX of and and our through PG&E strong trajectory Clearway on bankruptcy. our a CAFD to made allow of commitments enhance $X.X investments Turning very corporate Clearway In and nonstrategic formation combination assets. of our reset in line These and billion our forma following EPS had million the capital growth sensitivity XX our delivered We refinancing with resolution outlook

while achieving deliver Looking CAFD taking Texas the share XXXX, to end growth into of guidance forward our are targeting February our XXXX event, per we range. the upper account to weather on dividend at

colleagues continue half look to least M&A XXXX will portfolio to $X.XX to We closing Clearway invest our as through of during per continue through dates CAFD pro of GW work XXXX. XXXX to share the our grow in first forma Group at well with further as outlook X.X with opportunistic our

have in in we years, Finally, XXXX. fleet is XXXX in our as the year California discussed gas an important positioning over

We these are targeting forward. reducing assets risk and optimizing value going on

As addition optimize updating of these assets, the previous questions, landing the during value importance black forward the to to year. periods demonstrate to you. through fleet and the open during will mars progress grid XXXX. our valuable gas during is to the years' a you the of look lines work Operator, the on constrained our for Thank please. We we start

Operator

first from Bank with Smith comes question Dumoulin [Operator Instructions] of Julien And America. your

Julien Dumoulin Smith

hear you can Hi, me?

Christopher Sotos

Good Yes. morning, Julien.

Julien Dumoulin Smith

portfolio, terms guys your hedged time. hedges perhaps to think Thanks you the do going about engage wanted I just PPAs and of and there of about impact in Hi forward? you in team. Texas do the on how good thoughts morning How for the here. chat changing hedging events versus

Christopher Sotos

Julien. Thanks,

I wrong, PPAs for versus it terms hedge. market me the certain what's but get constraints of in always there's on a sometimes has Don't preference think available.

I also, procedures you actually and and those from assets, management or make from to pay we and a some winterization ice for type sure where technology increased of events. like type view, risk obligation delivery, ERCOT a to of the to do look establish really mitigate versus take train plant perspective, sharing that we physical then a have and with of design A, equipments predictors think routers, those weather and is our fixed have want PPA

in unprecedented people I don't side. management, it do but factors them, regular I see I those some tracking all said and are to look But risk incorporate operational liability going these was but sure on we make mitigating an from to From for think obligations happening it's to think as effect think we the I a pretty of want forward. everyone's we basis. aware, So ERCOT, around understand a done, that's would think,

Julien Dumoulin Smith

a if quickly how do just think retrofits know some there's you been forward? then and of level conversation assets operational going about nascent be can sort derisk about obviously, pursued that I well. it Got to retrofitting you various you talk has here can, for could Texas that that, this as

Christopher Sotos

up broke there little Julien. you Yes, bit a

I asked any think you at in particular news retrofits the there? of Texas. Craig, we could at do what kind about the projects

Craig Cornelius

What particular are produced operation in there ambient in deployments be machines were to were to conditions that address temperatures, supplemental in that pleased like in that general, And help find were heater hydrophobic certain we in event. an that we so like fluids that Glad use operators, faults have assure Yes, back will event. quickly to our coatings many Yes, sure. the But we would that. change the Texas blades, lubricants during this observed above those to include and elements do that wind very during in Texas machines, this for ice to specification those was those useful able see that icing observed to for other the rated bring this. during stay down cell about the a like temperatures. them event that think of Texas shed the out like in began to in and was that I supplemental machines in we were after freezing that machines return we within

Julien, our we exceeding were hours within up central within at example, freezing of way and they by back brought XX nameplate. online all had hours of So of assets producing temperatures Texas

heaters we've able operational run, future of we have that fluid that the we plants and at are that So specs are changes we with the or comparable and with of ready well calibrated mitigate supplementation those event. hopeful deployed, coatings there would a to the or a types be machines to operations, risks workforce, that in

Julien Dumoulin Smith

it. And costs no Got as yet?

Craig Cornelius

No, it’s…

Christopher Sotos

a there's early. He if was asking it too of – process

Julien Dumoulin Smith

Understood. Thank you.

Operator

Your next Lapides Goldman with Sachs. question from comes Michael

Michael Lapides

last just One, remind or Hi, so? equity guys, planned year have next I you can light will or And happened assets are thank price short being that a arrangements? what California the two year, taking term you given financings how in avenues enhanced financing potentially fossil the re-contracting hike, over you do longer a you each for for the other. to or unrelated two, over thinking have probably my the generation, the likely totally us on versus term existing about value equity have for RA then what question.

Christopher Sotos

of make re-contracting, conducive does of California term it terms I'll I that, last kind looking do question more happened to take Chad does. it and contracts. to situation Sure, it think I your So Mike, the first second the equity think at hand in I think year, side? in longer then What to

to your years, probably That five doesn't means probably question. to I in However, XX and a mean between be sense. that somewhere want positive fair XX maybe

yet, think to kind again, of so we one that's And on that progress make thing want I year. once this

talked we've a years. Michael, think, I lot the over

with of hope in would at year to kind five even Back least and you we're that's consistent of what there, the again, indicated. think think, re-contracting, more over years so get a we And something I time, expiration, range. at two probably I the talk to to contract to I once to for about XX one the want we've on fleet, XXXX, utilities told me, part

to if bit your I that's I A, aggressive, to XX, think a you're question. saying, be think, little fair

Chad Plotkin

I'll capital two Sure. then in And with comment steps. respect it needs, on I your Michael, to maybe think take equity

for had call. capital that had that at through the of the growth the time from what back intimated were were PG&E we cash that is inclusive If you we quarter, needs fund projects, the go sufficient in executed the come we formation all third had executed, to where had we capital that to that

is I the the co-investment three now today, and partnership, there's announcement investments then Mount Agua Storm. which in point to, effectively, Caliente, So the about would you when think

So we a it that's million $XXX little which total called capital permanent around. needs would in need of over about form to capital

it, we're business, our those the look level presented normal financed consistent rating and to kind at of half would between we've generally line with to times. in If if target X.X how which corporate at targets, you with our ranges, is leverage we seek lever use X how we've our we

So corporate if at see of million that we slide on you X, look that Slide you at imputes, $XXX roughly presented debt. our

don't bit, around Now about fund $XXX intimates again, little as move I'm of you things a that just equity proxy. going about is somewhat a not ultimately this to using around so that prescriptive, tell that and million required to is those but transactions.

I disposition we it we as to whether capital the I optimization utilizing needs. fund historically even of would this that of continue we projects, of not of similar did be would or done or the sort targets, relates past sort the that So year block of to come needs, may you equity our we've of it program, smaller to think we're that level not or how do type net as things, project transactions The occasional whether to maintain our tell going ATM might from are equity whatever debt. need leverage to way incremental those it's

we've of to be do by think growth, going place flexibility to is, sort that keeping timing that the pretty we we're with is capital. as is I'd we're that undrawn, when we sheet a of revolver main can maintain permanent and continue funding so way relatively done, pragmatic which new to consistent I balance things with things our point targets raise the the do

Michael Lapides

Got it.

regulation of California are Okay, And remind environmental back it. the to bit, either us, little gas fleet thank just Chad. regarding out can any you fleet? in operation you, or your continued Much there constraints coming there appreciate a

Chad Plotkin

I'm No, that not aware of.

Michael Lapides

you guys. so much. it much appreciate Thank it. I Got

Operator

Rusch with Your Oppenheimer. next Colin comes from question

Colin Rusch

some are PPAs much, retrofitting to the about or on that starting with of Historically so investments. under I'm Thanks instability wondering voltage process thought talked change, network? you've existing not energy of storage management, the of as incremental that is any if you sort guys. see projects kind

Christopher Sotos

I think that really depends.

projects you has Craig putting think terms encompassing, the bit taking a about. elements that little at off of talked do of type to might have take that to some what a been kind I line, versus typically turbine the more question is wind retrofits that of in a kind of of and time all in

dollar in retrofit still panels So of have math terms value question is if taking storage think, that I or in to offline I'm PPAs, I situation and understanding battery to correctly. turbans tough think a that, do do adding your we high

Colin Rusch

heart I'll that's Yes, guys it take the matter. offline you right, but I with of the think the of end

guys in fleet us all, how the about terms is, at point question business, second of The you're with performance? network the of in and are thinking PXX this variability estimation, changing given at guiding standard your some the operating the and you

Christopher Sotos

adjustments Sure, we kind our a of give Any answer is part in guidance take no. PXX simple we that as November normally our else, call.

go look typically can adjustments we the during at the and PXX we year make year, the through that how So time.

it not that's question though anything So as to move our your is occurred [ph]. us capacity PXX make would

Craig Cornelius

into though when Colin outage for account performance grids the take estimate is, Just time we that of you're on an on. and to and so also aware, expectations a we project, add produce energy

I great demonstrated been new for I think our reasonably So that outage types par. has projects, when to incorporate on we're think, events underwriting ability of expectations those we've

to are is consider that as opportunities on outstanding storage contracting with into now So account. there existing your capacity California, respect just other question that operating least supplement for take utilities assets. a at to incorporated we to And for

able plans see we've to want to where marketplace in and make so got take we're ability compete to to if the those us And on be try we'll offer to to making up offers it. something, the utilities

Colin Rusch

it, Okay, I appreciate guys.

Operator

time, this questions. no there at further Now are Instructions] [Operator

Christopher Sotos

care. forward to All thank in May. I joining all talking right. Well, you for and you look to Take

Operator

for participation. you Thank conference. your today's concludes That

may You disconnect. now

Clearway Energy (CWEN.A) 1 Mar 212020 Q4 Earnings call transcript