FCEL - Earnings call transcript Q2 2018

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Operator

Good morning. My name is Tiffany and I will be your conference operator today. At this time, I would like to welcome everyone to the FuelCell Energy's Second Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator President Relations, Vice your may conference. of Gelston, you Investor begin Tom

Tom Gelston

and welcome as This morning, quarter you, earnings the good Thank Tiffany, XXXX. of and released results be earnings The for second quarter website will Energy as of available call to company presentation FuelCell FuelCell this Relations Energy. section Investor well be morning, release financial for on a XXXX second available the of after hours referenced that X website. replay the approximately during at company's its are call the A this will earnings call on www.fuelcellenergy.com. the of conclusion

forward-looking and would call with and listeners statements I its including to and continuing proceeding of fuel the and U.S. in development, the other company's without the discussion read risk the recorded technology respect Before Commission. results to financial like expectations company's and commercialization would on company's Exchange with the remind contain cautionary factors everyone the regarding cell like is forward-looking call, and statements, regarding Securities the filings being statement plans that statements this I plans. information financing limitation, that to business with anticipated will to our its and direct today

the Now, Bottone, President I'd Chip? to over turn like and to Chip call Chief Executive Officer.

Chip Bottone

newest We initiatives for highlighted strengthening quarter Korea billion customer acceptance backlog of results of turn X $X.X key and who assets. that X megawatt cell labeled the Slide leading of awards the XXXX Company in our welcome. our eight gigawatts owns continued Highlights. utility for profitability. completed and commissioning a final to plants generation Thank announced as position testing Power KOSPO, park Tom. as our power XX fuel or power Southern company to Please financial sustainable everyone we our morning are execution project you, second and Good execution other of Today, well record by on

ahead We are Company our schedule. of accomplished EPC proud talented two this Hanyang team, including contractor, of our Development months who milestone

revenue the tenders South the in of helpful of evaluated. in ahead two utility being scale extremely schedule. for mark ability recognized to us that and most the our marks currently projects important project a highlights commissioning of quarters, and an critical Korea from This was completion projects project will is with execute past While large other the the be

parks. Korea sizable South is term for market a many cell multi-megawatt with near opportunities fuel

of awarded continue to backlog. XX megawatts our in We execute or projects on

will increase As our in greatly we will discuss today's of the clean energy size detail generation these projects portfolio. call, during

flow. and we strategy recurring X.X entered project placed into which portfolio on was a a was megawatt to plant cell key Our profitability. produces California predictable a part to NRG by Yield. revenue executed In sustainable attain constructed sell April, structure capital activities. our important treatment fuel in and wastewater agreement two us the plant. Tulare, time is a while to our We definitive us to growing maintaining of assets Yield Tulare operation term commercial allows to as continuing role following The sale near Tulare on our capital The balanced cash NRG base, we generation execute our the growing of operating us core while to allows approach our asset have selectively into redeploy portfolio, over installed sale. creating and transaction

facility credit refined Hercules existing with our also We Capital.

future interest Digesters of financing Bill future $XX provision group state our awards bill until cell flexibility only important The large the we other X, vitality of facility were in only legislators. date a period which favorable the provided with Hercules as passage and into Senate and million, to amount plan maturity applauded signed XXXX, provisions increased the extended amendment period of the Our we important refinancing credit to and industry XX-XX. number Public provided modifications. The well interest for Connecticut's of an the long-term Last in by energy extended of Act as increased this credit availability were month, FuelCell project made facility of facility as under the Act bipartisan the XX-XXX. supported projects of Energy The as led the fuel of law concerning backlog. The and on come purchase state's an execute for Act a Connecticut small the Act up state's XX-XXX the energy Public up this projects. the passage our The and response of are the was state's procurement passed last XX-XXX, which statute to in roughly and successful Department an of bill. megawatts. is year. incorporate cells DEEP digesters. of Act X% to Energy clean or Protection current X% the of Public RFP and wind Public which Environmental to under statute campaign load representing language fuel Public X% typically for expands of the of by XX offshore to fuel megawatts available a important number increases load for of our megawatts increase cap available cells outlook into for retains XX-XX digesters to issued strengthens Connecticut's Act

that previously have bid its elections megawatts. it month. expects current XXX the We pending Each projects totaling schedule several RFP under this to April in nearly reflects announce

urban over redevelopment tax Portfolio increase XX% projects cell to scale setting megawatt for the incrementally measurable provide benefits XX% reliability is under including Connecticut local the demand. the decade job for class enhancement creation, now statute, from Renewable Fuel for stage Standard in-state set next fuel the resiliency revenue, power new brownfields. more of cell of to and Additionally, and

by of more Financial acknowledged made economic that reviews detail energy, and has our a focus sent signing it Chief financials values the legislators fuel portfolio state of areas our I'll Act Bishop, environmental and the strategy. the cells. our process, definitive after in statements during and the Officer, message With our benefits and discuss various the Mike Public Mike? XX-XX generation

Mike Bishop

XXXX of for the result Tulare, our second three $X.X and the included This quarter $XXX,XXX have XXXX. operations megawatt to approximately either the $X.X to of optionalities increase production FuelCell the the NRG you revenues quarter The that quarter Product total generated also quality of write-off second April our of to assets. million fuel cell compared the fiscal variances a million a a impacted million $XX.X for The million of costs $XX.X ended for of of California highlights of joining the volumes. periods titled million Slide quarter X.X thank totaled one in in was call XXXX, was April XX, morning for strategy Energy $X.X today. Financial portfolio. compared gross second reported loss of cost approximately gross of development achieving to assets were to sale having fiscal costs of margin XXXX. gross to months plant Both of totaled ended the Manufacturing negative of located related the to and the fiscal producing primarily the turn XXXX second a The $X.X Good XXXX XXXX. and our example quarter margin to revenue months of for profit for fiscal we Chip. second $XX.X second you, plant to three sell compared prior the by is due million and in fiscal low project. of the quarter million fixed transaction Please Generation Thank Overview. sales is under-absorption for compared power sales $X.X commercial XX, retain of Yield. the X, sold of just overhead to fiscal X%, gross million totaled in X.X%. XXXX a or of the project

For XX megawatts, to ended megawatts April XX, rate in April the rate three of XXXX. the ended an company production operated the three months annualized approximately of XX, the XXXX, XX compared at months

per in second to second common second million cash includes to GAAP common to Given negative before million equivalents the earnings compared as the is second of in of for measure. of the the million, for a for and fiscal level XXXX. includes the $XX.X dividend half quarter quarter XXXX XXXX. fiscal compared measure totaling $XX.X evaluating the earnings and totaled Net deemed quarter per loss release for interest, production second a or stockholders expenses taxes, to second company's in and in million, negative equivalents $XX or of $X adjusted and Adjusted $X.XX XXXX. million, share, Please on of attributable cash diluted $XX to the amortization $X.X of April million $X.XX quarter preferred basic plan totaled Operating the of second and basic a for the fiscal quarter restricted of of $X.X share, fiscal restricted the totaled Net is compared $XXX.X XXXX. most awards of diluted XXXX to $XX.X unrestricted second Series non-GAAP fiscal XXXX our backlog or fiscal totaled XXXX. loss stockholders quarter company a XXXX fiscal quarter the $XX.X million XX, attributable increase stock. and adjusted current for the EBITDA, which cash and depreciation cash cash. million, million Cash, comparable This of see of EBITDA million of reconciliation C

second availability totaled record the We contract the sits related of backlog Energy construction $X.X quarter third is at totaled sales At remaining technology of Korean $XXX approximately the million, primarily $XX advanced $XXX.X with million, this KOSPO. finance backlog the services completion a revenues end borrowing order backlog commissioning backlog XXXX. totaled also The fiscal under from to million million $XXX million, to project quarter. in NRG the at recognized order the our million of totaled Backlog facility. expected fiscal have quarter, of with product $XX utility revolving of generation end

slide rewards the billion project. in the backlog the bottom LIPA on awards contracts and backlog from the by the shows The approximately balance combined illustrated of the chart KOSPO right at service includes of the the at project top second the included the sheet. projects As quarter. totaled totals of asset not project $X.X Project on three the chart end the and slide,

was XXXX, totaled XX, million the April portfolio $XX and of As financed. operating fully approximately

of we had developments, In XX, projects million in in the addition, represents approximately of which XXXX, $XX opportunities. as April financing investments

The We permanent purpose to and financing Building portfolio slide operations. Sustainable as term are financings as as strategy. titled provide tax generation financing in X Profitability. Slide is reach well our insight projects regarding a Please this to into of turn equity active discussions construction commercial deeper both

XX, annual XX.X revenue million of $X operating recurring of As assets, megawatts XXXX, million. approximately to $X of generating had April we

$XX XX, they As annual with to and XXXX, construction various commissioning deliver these our business. Rolling $XX expected for quarter included additional with of The design April recurring projects to cornerstone of operational. fiscal once our in Portfolio another highlights the indicated each revenue site XX.X projects stages an star. megawatts Generation million project become window profitable of awards anticipated completion million and is sustainably project of construction, a by chart development, the a building the to of

Any X a titled For have Generation X.X XXXX example be quarter Trinity the new begin and two bid on which for Triangle projects of with achieve these highlighted the we revenue. resulting to blue Street placeholder combined turn from in new College chart. commercial generating fiscal Portfolio operations would projects dark Financing. the with expected Slide additive are third successful megawatts, Please in wins projects to and

We're fiscal attract Now and construction requirements I would in priced capital. always recurring the and cost thereby from the Tier in revenue, have we With address needs, can Also have to of XXXX, for that facilitate projects capital. to further sell capital portfolio projects the recycle process, our projects finance that project for to out projects as address project sheet backlog. takers minimizing to FuelCell we've demonstrated to the model capital projects the effective quarter predictable capital the balance in option source Energy's to off second competitively discussed X the of them. able we like

project Energy, As comprised manageable be we capital illustrate plant from our of portfolio build held form come debt on of of generic will the our is equity out FuelCell can cell which of helps project stacks power our graphic right as the a that the flow fuel the contributions hypothetical using with the capital part $XX in Generation tax million Portfolio. largely expectation The inventory. and equity slide

capital to to the phase, The capital would we financed be the of XX% construction consisting working financing overall and capital. of covering inventory needs. by least During expect at general would balance XX% costs attract

net any investment overall that of million so our the to We accretive Energy's have would FuelCell no Upon financing cash construction between today, between outstanding be balance. debt in $X example project leaving costs near permanent financing we completion, XX% $X would would term million. this project cover to and XX% expect project

$X income in margin. to how statement, be $XX would $X million impact per per project such in year profitability approximately flow generated consolidated a the year. free to our annual sizing Depending million terms, FuelCell cash would we from expected As be EBITDA representing a would roughly be project XX% million between hypothetical Energy debt also expect to EBITDA to revenue delivering on to million $X and

As would expect the portfolio, and whole we that for would company. financial results this of example is drive to increasingly backlog applied our positive execution awards our

Now call dive back deeper Chip? Focus like of the our Chip I will company. Areas would to turn into who the to

Chip Bottone

are like to the Slide Areas. driving I you, to key Focus to success. Focus Thank Mike. would Please future X, Areas turn our outline that four

construction $X.X under in the backlog. execute First, projects of on our billion XX.X megawatts

recurring revenue driving Second, profitability. further grow generation our portfolio

and the being our that commercialize by advanced team. And for technology win around globe. the big projects developed ideas four, compete Third, new are

execution. First,

we of installed Mike XX.X Connecticut, California York installations to over on in lives. our explained, as base contractual our track for deliver and plants service New As on commitments are our existing well global new as megawatts

projects complete automakers. these Torrington and generation business hydrogen increases Our are support, creating for volume customers, projects of displays This commercial these particular is Among key segments on-site group reliable prepared drive. and our grid distributing municipal global will factory are the resolve expansion on three schedule. deliver Long LIPA of in and our Energy-as-a-Service XX utility and for sides leading making and XX.X grid for megawatts megawatts challenges. including on to projects progress for Power are York's of them energy Authority highlight to support proceeding individual These installations or New great Island helping utilities, ability we the environmental totaling daunting

Second, we and will recurring portfolio Portfolio; our additional profitability. clean grow driving to generation revenue Generation continue our power

number a substantially portfolio. line We projects to that of sight new enhance would have of our

portfolio's have path we to Mike, by finance a discussed As the growth.

Third, new business.

are competing We for globally. successfully and winning projects

momentum on in and accomplishments recent growing are building We our are our industry.

Energy-as-a-Service authority allow own grid cells. procure to the by energy reliability. financed providers the directly or will we state's the fuel of XX company have been granted to our addition owned utilities both utility In acceleration in the with and clean megawatts of Korea. Connecticut, modernization the This utility seeing of generation adoption distributed are generation fuel additional distribution help two to capacity to and U.S. South model, global the In cells

by X.X As an example Connecticut. for which project megawatt Illuminating this model, we United recently micro in Woodbridge, grid completed owned is a

Also XXXX. have Class the look for we affordable strong In are projects designed to of state the under We generation mentioned meet to fuel being see by as We clean Korea, promote entities multiple to stakeholders the utilities to a utilities goal doubled first, projects. perfect development carbon for the state power in through I RPS ownership generation special the an and has at generation and cell with approaches in resources banks in forward with equity is of to power have X renewable has financed RPS XX% to positioned or energy by this process. and increase The total XX% direct projects KOSPO to emissions. goals reduce example new to to solutions. assets uniquely country the and energy with purpose a South projects; clean through help two owning demands earlier

further and potential in and world to tap now. grid expertise, distributed help is as looking deployment the the that And energy significant are projects, some base, ready the ideas. adjacent the on modernization in collaborating carbon of order emissions the into the unique underserved problems as to to install hydrogen a revenue we produce solutions long-duration we innovation solve markets and they well infrastructure significant to we're and These with opportunities for market finally storage. area These new big companies serve scale because innovations We ready and ideas big of capture, solutions With now focus strategy. opportunity. for commercialization have are because focused are to and megawatt proven solutions largest with to our fourth have reductions, technology market

the a potential technology carbon game changer is reasons. Our capture for following

First, fire our gas power reduce and its solution XX% of is affordable for from XX% emissions COX coal the plants while power grid. in ability of to up additional generating to and unique NOx

our is based marginal is cells Second, It manufacturing capital solutions. market other in on than approach same our less -- our commercial today. fuel we factory are intensive the that

Third, CEO, world's and in project oil applications gas, the by address COX, Chairman advancing will effort nicely, its ExxonMobil its as of industrial combining just industrial reiterated include time, with And is carbon and Woods, moving XXXX. with capture is constructed can committed this this of power applications, two-thirds Shareholder us operational our carbon and technology and Annual being by XXXX steel finally, be Company is cement in to manufacturing. cooperatively our At capture generation Darren Southern Exxon and week last Alabama Meeting. at forward sources pilot

block and cleaning the will all we generation have lift and a in bus access generates up carbon truck that now are with near-term a distributed COX We're strategy are working and deploying NOx affordable significant manufactures transportation infrastructure transportation also and our in Southern The cells purposes. all that proprietary reduce the in face globally. Automakers, power for for similar of implement capture same that we manufactures also source products looking the issue a industrial and can sector, have technology hydrogen industrial common platform is for We Company that transportation be to indicated and hydrogen with building and industrial design to markets opportunities at role of fuel for globally. use Alabama. emissions emission hard

end price the that solutions point gasoline. addresses at competitive is with to a challenge hydrogen Our of the user getting

on project moving demonstrates hydrogen. power entity Long for takers local It fuel different having the customer and Our off of industrial Toyota for company our California benefits Beach, or the forward with in of streams, value generation is schedule. industrial utility first or an

project East this lead markets. to Coast to expect We California, opportunities U.S. additional and some in deployment international

of good do storage technology, to fuel generate cell long simultaneously a of during long demand carrier. hydrogen source for then strategy. This low power times into to Store that power power solution demand. on sites the energy offering. ties hydrogen our an high of needed we're periods progress and fuel oxide energy Lastly, could as duration advancing converts uses hydrogen Based periods our solid reversible making onsite source this excess clean power solution an our grid distributed be

recently with nearly totaling ability issues have several Utilities all We technology. is increased underserved our Summary. these compliance X, driven are the in awarded of which more markets. projects been value in recognizing interest the storage need form while turn this applications common threat and affordable customers solution million and proposals. avoidance The $X add advance for Slide has flexible cost the solving to or to revenue, to Please for

growing focused continuing on We executing ideas. portfolio, a sustainable and big innovation are and our commercialize These winning are on solid changing create Focus game profitability new and reinforcing mutually strategy our business for Areas term our success. backlog, long

record with will we recurring to generate billion It portfolio that impressive predictable more provides lead backlog in project which project, and will grow Our megawatts XX revenue awards our opportunities. represents profitability. an $X.X than and

KOSPO high which like the in record operational fully have experienced execution, megawatt two We went track months of successful of a schedule. project and our level of XX their confidence team ahead

elsewhere. favorable ever ability competitive energy plan win are in capabilities business more proven and by global executing and Today is FuelCell our in are on Connecticut Our policy markets. strengthening energy compete the developments for favorable a new and Energy legislation and backed to Recent strong than trends. solutions

the into time. heading happy half we'll second momentum Operator, be to at beyond. and significant have take of questions XXXX this We

Operator

[Operator Instructions].

line Carter first Driscoll FBR. from B. Your the question Riley comes of with

line open. Your is

Carter Driscoll

Thanks for my questions. taking

for you First installation any your projects very about solutions. environment, KOSPO. one a about, Korea other about I bidding turnaround ripe expect longer have maybe mean first seems market is competitive talk than Maybe the you're there? some in can had Maybe project for a initially. very it quick time on? I that you I talk a would of changes project the talk with like

what in Just the of get trying is a to the sense else pipeline near in term?

Chip Bottone

sizable project that banks there but we the by we with Sure, set of which is are Carter generation I use demonstrated think carefully ahead position. purpose And Relative very schedule carefully make a have, KOSPO I great project value special like will in is the this to that we're this understand to as well do Chip. Korea. up Korean the in the models both understand going that we companies. collaboration utilities our market, months be that, and pipeline as as competitive in two energy Korea. direct mentioned what other has to Not procurement this every I like they selections do, grant we very We project you say markets as

with executed the this as testing different the first also that utilities through of on that satisfied EPC all go only project, you So but comply we companies you not we approval to with have local and saw. things people, and

demand. So goes to mentioned, the Relative opportunity, I long gigawatts competitive have they helping your power a the total to generation goal like about I country of something the to think which position. of the XXX XX% way in is have as in that

are going a what to projects they do pretty can they are solar But all obviously typically can fared get things that's opportunity, not cells, we these very will would and that sizable fuel -- So of say we to some are, cells I well. do like market which general, that. fuel wind, relative use in

lot a on pretty opportunity our other think of things in to the continue we're and we if those substantial. execute on is pipeline properly have that I We working

Carter Driscoll

from notification this DEEP Shifting gears, month. are sometime you a so expecting

about bid for range partner correct partner size into I is number wrong. your projects number You megawatt that am collective Falls, your more a and gave Beacon be may of about then the if And at and you the yourself me you've I of am about your of talk partner, projects, RFP? number talked assuming just

Chip Bottone

Chip is this Okay, again.

could was megawatts. there X bid total things of we XXX size smallest maximum -- could the in most projects like a were all then ones or eight of XX. few They I minimum a there's think of ranged be one XX, a XX the and roughly fuel are in that cells other between two the about megawatts yes, for be and below is So

all they the was general In one that the with were Falls was we like was about range. XX that. was line had. it megawatts it in end our projects are So of on before projects and of but in higher not Beacon it XX megawatts that

yes, in -- as So will we we some things well. had optionality

roughly of month like there's So the said -- but choose is they of June the significant to wind us. their some for projects my amount pick in to landscape in even a things plan. in according to and know if we'll that's And for if time -- there pick happen I them capacity remarks

Carter Driscoll

in kind you is the through ITC reasonable or kind required environment terms kind returns assuming X the on profile baked am Much then the upward a; of the last roughly any Are into revenue of per Slide the walk million $X yield of think legislative a gave that and I be installation, curve facing more you were you megawatt? hypothetical? hypothetical this guess under Could favorable I that based time a of would developments. terms of that my megawatt XX on I and is assumption today? is pressure like just the that assumption that first where bidding on they seeing of on we example the shy example. something some is reasonable in And this are rising question typical just

Mike Bishop

questions. It's joining the and Mike. And call the you appreciate I

there I So the what megawatts fair. we any example as we we of seeing as And are terms, is fuel today, think financing include not is exact didn't far you would quoted number pressure. an it. This seeing are but give number this in the Carter

projects and have Our obviously have yield higher there. projects than which wind out more capacity solar

there. kind I not band my in pressure said those really we're So, strong of so seeing in any a remarks than as interest. are, already And different

opportunity We an have here.

$XX We are financed that have close we haven't those construction assets million under of of which today the pretty are some COD. north

that's bring So for cash obviously those our financing in to as balance. we accretive

Carter Driscoll

about commercial is you the COD? Generation any there your in asset of sale versus thinking is to operation or versus kind it think along Portfolio timing more as sale considerations to And from once qualification decision it NTP hold an or hits

Mike Bishop

any asset see sales we think don't To at Proceed. Notice I Yeah.

what or the the developer given to the If financing the of $X XX% the that of do these we get better cash we're appropriate can add we in have with for we you process million or syndication that the efficiently we debt through business position. go changes of same remarks sell the meaningful $X EBITDA profile $XX if obviously do in us $XX flows. earlier revenue a think as sell million of And million to both to and profile as a portfolio a north tax OEM on with with we EBITDA and of benefit strategy can I to from projects my the certainly revenue dramatically that company do in of of it would We the either future whole is will in profile percentage the equity the I if positive we the in another the we'll so we do bids were or for sides process. owner equity financing tax we get to and value We the an that. COD. puts retain million that -- generates today, construction would bring said the close typically assets that EBITDA

as grow certain continue assets spinning to off but this opportunities as is strategy our clearly present we'll to So, consider themselves well.

Carter Driscoll

have it going for that is plant curve side. me your learned concurring cost at Okay. fuel up realize to economical now seems one commercial And on the your terms challenging. just batteries of have is cells of the different duty because biggest in then ROI the carbon distributed And is on hurdles talk one from discussion the hydrogen anything and right seems total certainly more to be making of learning gaps a you -- or fuel in But this accelerate hydrogen with lot partnership least be conference and fuel about cost particular it in on to from powered with been now profit is once it economically certainly positive a side. the really those maybe of for about -- capture I Can the you distributed the the talk has of side like is could of is you've going less last you doing rising a running? almost right can about the viable? -- light the to of the how equivalent fuel trucking economics Toyota with projects or energy [indiscernible] one basis

Chip Bottone

Chip, it's the that with I'll Carter, carbon first take capture.

Alabama of COX plant. and the amount on lower on we're a so unit real incoming purpose the the in building facility the differences a from carbon So, that varies gas in plant that from that the of are gas the plant. there plant and using dramatically both is run to the not higher as gas And being is plant subtle coal from well as we're current going technology coal emissions

the a fuel plants range just a such the my side. Even expect or don't of we apply have in industrial industrial how up guess generation in really script you gas is I emissions to the transportation COX opportunity of applications kind was, power is comment subtle third its run wide if one-third third. other change. applications. about opening in the that in for the we bigger so I we and other dual inlet same the using the form on application, do in the the about current world, a of technology hardware for So It's concentration a is any different the roughly not technology And talked

that to that. us really or So another expand of deployment the is way the for marketability market

industrial the projects lower because or we relative Now concentration those from boilers don't that applications things to need in higher. particular are post being concentration the those testing usually

applications. work with what's Relative of reflect to fuel natural is that that the those to things. price more to exactly independent that have to are to the that it they as gas kind make people fact, system would of goes shared necessarily in before, consumer price we that's you of gasoline to the the fine, I capture the affordable going the the job kind to proposals of So has on is of as hydrogen of say, up, biogas, strategy and current maybe right, thought as this to strategy, up easier yeah, And industrial you price think gas well. happened have today. prices but doesn't gasoline key with deploy it hydrogen go I of economics that ready the have the equivalent the out and based carbon would many at our you're there kind -- for we're we've But we --

same with we whole capital fundamental that a is can how premise work. the the this this. and base. from basically pretty the So we power produce much have strategy maths revenue device that's the And hydrogen doubling around And

strategy had didn't change. if same, the even is we win said the economics given as better So they could you environment. get the But the

pretty positive markets not couple U.S. the a in world. just we're the of but hydrogen about the these rest So key of many of for deploying more things in

Carter Driscoll

appreciate I all take the rest Thank will the guys. offline. you. I color

Operator

question the with Craig-Hallum. Stein next line from Eric Your comes of

open. is line Your

Aaron Spychalla

Yeah Are costs there the on charge quarter. there? taking about Eric. kind on that for Maybe Aaron happened Can just impairment you this first be hi, And going Thanks for going that to generation talk gross any of bucket forward. of other below the questions. the your Spychalla are somewhat going Can it's just that, kind target you even next on then there, forward? digits of target and margin kind looks for like low recurring what's talk it about the bucket going forward? double was that quarter going what excluding

Mike Bishop

is that take I'll Aaron, Sure, one Mike. this

we and to So all investment talked the we write-off and about, end that write-off that project, small on that changed the some $XXX,XXX the conditions decided it. with site is projects of we associated the that costs has in about had are those really

costs. any see won't You trailing

activities overall the I quarter, quarter. have margin some in would maintenance We last it bit down a as far acknowledge quarter. the in from As did the little ticked

depreciation the $X.X of think million overall percentage metric is of Generation at a Portfolio it's that's the I the think look I to range. meaningful cost EBITDA There important of amount million, more portfolio. in is of that -- north $X in that in sales,

So at and percentage you're portfolio. for that EBITDA looking still that you strong add back in very a

Aaron Spychalla

most thanks. more Okay, And any can on color you you've parts But is Coast milestones share abroad the business. U.S. portfolio opportunities some And shaping then East be a may the pipeline on obviously and what mentioned there? the on your one you Chip next to look TriGen bit. how the be secondly up? of touched exciting on for and of little to is that are the it

Chip Bottone

Yes.

XXXX -- is is to project the with our requirements There's current first the a contractual execute milestone thing So that's are. on what Toyota.

We aspects including with manage that of are Shell that. other some the people some different others and working all

are got at other We build -- and vehicles, and of for East at things to the the as which of you and and cars a demand, at frankly, to have kind we countries there's to means couple but some demand California, you that many kind XXXX, you want Japan. So looked how things a -- wise when that's in XXXX. including going by the Coast do place of have XXXX at And have calculation looked like looked infrastructure for look we fine. learn then you plant we we've all a process we going there's

built there's You to plants of supply look have sizable that. to at these the number

we these Coast many within then calculation within So and we've pursuing other California, of the markets. different more kind within and of are plants things East done in that building terms

we say projects expect that months So several tuned, have would we in I stay the would that announce. but to would more next

Operator

from ROTH of next question Partners. Your comes Irwin line Capital Craig with the

Your open. is line

Craig Irwin

to ask wanted I thing first Chip is picture bigger a question.

time over mechanisms how once incremental look So financing more your see completed? financing the think and up years about traditional Generation near traditional you next levering of individual Is for small the the in to this move construction where steps couple should we Portfolio are executed we they pursue a or should projects to for with something are frame? more then projects as likely we transition

Chip Bottone

that up one they slide, different and actually lined will. projects laid happen worry We'll the But are so But we've all whey calls questions, your Mike I don't if be out and not for -- we at about then not finish take we've to off. clarity that. are may put all -- will start just would the your time. And COD always going it go you together for and record all can

way when we come the if of some and be this kind did selling be is may -- obviously just So and this year things new see are they assets to you include producing cash. even we recently, like online going

these the and at as combination it's of the from sheet but some thoughtfully smooth But a from expectation word moment. and included produce can time built managing projects that balance said, the So, debt capital is we of in the that there our I'll Mike equity transition here we, cashless. cash equity probably over is the growth, lot we've use working our

to you know add don't answer. Mike want I anything that So, if to

Mike Bishop

next Yeah, quarters. financing I'd coming see the agree with in here Yeah. several said Good you'll morning, and what Chip Craig. project in

financing I projects. will smaller we be as prudent are projects sizable are these we LIPA for that are We will sheet that Obviously to finance balance the those. construction the and projects close grow use think on it self COD.

out Street. the make and the a that the added didn't get these projects lot that given had, for smaller working as of we sheet. sense the start will lot you We Tulare to sold For doing built balance the but get just going and see bigger construction Triangle to financing we of projects project capital instance felt

Chip Bottone

Craig these more kinds seen companies for I would from we've interest say that increased of projects.

where of but could in interest the pool But to talked equity the these there in are different as we other environment we've things this a couple expanding folks serve think in that firms so tax U.S. well that, we've used is particularly here. actually. I So, of

Craig Irwin

That's really good to hear.

you why So, Tulare. to factors specific that Maybe sell why I wanted anything Tulare? for question to maybe about to contributed is your plant now? this can the the ask decision color. specifically say Thanks Can really any you about discuss next and

Chip Bottone

Sure.

Yield. in They our great with had were We capital operations well the NRG Connecticut. portfolio. of financing, around and a of an this sources found other have commercial it was own this very They've asset transaction attractive. know the also the at an They doing offer relationship assets at entity a looking we project. in it's on potentially tactically been So, into looking and did time smooth back company. brought very we was It and but that

projects, will you service to Yield investor a chose project year have a long-term NRG in So, an company. There we for the FuelCell for the Tulare, do the this. project continues great to with own in another customer building are continue it's and as They active and the operate we them. Basically is all we these have that But with role. to reasons, XX that. service for those now. plant at know an Energy measure role project, we have the also in process but of We're agreement

Craig Irwin

February customers you're specific investment impacting Can you is back say question, a that share without -- with nice with that thing. reinstated in the maybe projects renewal? conversations you those on ITC level sight having the potentially high another the tax credit at might how can was then this of about And line executing anything not pretty getting us have

Chip Bottone

Okay.

maybe the -- you start the strategy us attract. increase this I would it's Portfolio Craig I'll that and off. different a helped ITC Generation Clearly that little regard. us would help So of and projects was that really can Mike to the to everybody again What is with it debt us, amount helped finish have -- in think

great. that's So

generation But positive to it's a to going it to execute debt as anything? more some forward new cash that did these. going but assets not ITC helpful necessarily. not but get -- the or impact PPAs perspective So general it's going increasing. for more But projects from some certainly are us that were a ability to here have that Mike? attract minimize I There would that. bought, well, Portfolio accelerate to this Generation mean Not in projects are the

Mike Bishop

just it that you financing Since bid. the agree number equity with have on side, of because component. the And broadens the I would tax that. firms Yeah, now

Craig Irwin

on progress. again Great. good the Congratulations That's to hear.

Operator

next Oppenheimer Rusch from Colin of with line Company. Your question the comes &

line Your is open.

Colin Rusch

see about you And working over how project. Can for capital With guys. quarters? should much the to trend use this so going of few going what are next talk we be Thanks that forward. inventory the the needs

Mike Bishop

Colin is this Good that. morning, Mike. will I take

well million applied about when had $XX we're are we balance Yeah, projects of on goods and balance about the pretty say as would I of always you term at quickly. very close finished sheet. work the today inventory Of quarter, be to $XX to look going the can as to assets, that, of of so to is a still So but level yet. process project that, second some million these our assets end And I'd bring in said million inventory look $XX out my the I'd had of when also keep cash opportunity in say near as of We north cash is at term there project as financed you opportunity not remarks, that company. at into of been squeeze look inventory. to

recycle that be just cash to obviously into now top about projects, as good in I a some remarks, able equity cash our balance working I out a we on in inventory, back project required in balance example but my we of talked and we're assets So strong other that mentioned to very right have capital that the in use can projects pull will that. going of to there

Chip Bottone

perhaps those And at so million. projects are EBITDA moment very portfolio that. attractive one generate very talked to basis just But somewhat We megawatts modest of add or about the an Colin we about XX I'd the in to margins. in ability terms that of $X generating more we on thing our confident is

is things, it two to is once project the generates get cash. second there it one going is going, So gets

that have model. that and to we So we that experience enthusiasm in comfortable just support we're very on model

Colin Rusch

Great. the accelerating you cycle, right working And the you seeing going folks? the customers. in about what's of then bit to with little that sales just Can really talk a these are levers back current now effect

Chip Bottone

know it value of add mean out primarily, day we're can what of I end be can at we our and would a that will to the down or the used landscape will other do head been be be. know have noise financed the we you know to we costs whether and project the -- the putting to that. do are the the them just typically competitive there's be kind people other proposition focusing however, there, value. and get We've the -- competitive a we our levers future We of a in ideas, bunch on have Well ability capital PPA price

yes. Things the I cuts no space. well. one us detail But is That's like served of things in kind model, that the with record of thing. have there's time, a so that long we those reputation even We track short a minor not bids, of well. And its, public doing think right energy that have for you serves the said a

is a from and structure have a you the that got the proved think that then finance-able cost anybody -- one, model third, to having is second So we is world. have, we've to say perspective, which in lever with we compete doing I what

Operator

Instructions]. [Operator

with Cowen Jeff line Osborne Your & Company. next question of comes the from

is Your line open.

Jeff Osborne

you would and chart under that the be this to construction I of your interconnection In sake brief, contract? the month. sort On keep have been you in already of be, say XX win were awards so you answered plot them the to just of projects this that RFP, helpful Can answers when have most far? Connecticut, let's for megawatt you you the argument DEEP your that XX if would on when guess have

Chip Bottone

as mentioned, of of and different line Chip. to is there's sub projects pretty Good stations most sight those This good Jeff. so eight Yes, morning. I have

they sites secondly, don't with So we that. of of in our expense a any know the folks that already us the we've supported see the company, just our And was so -- have and strategy by of good physically, one, we past, these utility issue to we minimize, the was -- but did -- there. have part they all run interconnection, effort

like the So a that quicker Council stuff. Siting and in the lot permitting I and than stuff would also say like that of Connecticut of lot others issues is a

think us. timeframe I RFP the XX be projects to any have or of but driven get projects more than selected are by but expect the But by the -- guess. we wind in course would is be XXXX may any interconnection I on to than build I would in think depending these industry XX which right I So to that something won't XXX% this done like month

Jeff Osborne

you rate little where have of stream surge levels you cadence or over replacement update service relates from of one NRG that quick the be it three other And terms Mike, ones. at the there just the wasn't the of when anything should replacements us in your revenue line then Can that you to of just sure last I next It's just quarters general? from line with on in have that just is think any being that stack one on program look the had delivered would as stack consistent next few remind oxide a quarters? there's in and solid the Two was Pennsylvania, next the over you bit about you in in just two to had or be as that? there run if quarters, two past, we a it a if call current few lumpy item as win the the quarters sight a

Chip Bottone

question and to I I'll So last will it the your question there, give solid oxide then take Mike Jeff. answer

I oxide correct going pretty simple should solid in And here be part everything Pittsburg. ship to I'm the June, for start fairly prepped has that been up been hardware latter site if this and in been project The a be on at already that. here think done. facility the have of June we're that has NRG expect much to installing Yield's we yes So, we

the that will be I third unit of quarter facility Pittsburg. So, will that in expect calendar year running

Mike Bishop

is And this Mike. Jeff,

you and on seeing financial the operations through that's statements. of what I On the folks just the for line, revenue pretty for come the that's revenues, our said day-to-day ratable and service accounting two to is call components service through go it's and maintenance there accounting

revenue So have revenue cost we do to higher couple module deferred then sales it. those and drive and when costs and of they quarters of will over replacements deployed the as we with go related and get along last that

that much that this operating revenues continue say can't operating comment We we haven't and to I the put expenses out too the specific to other be range so than guidance, the in, been range. expect that in revenue on have

out As XX-megawatt online the since project for you think that have probably that about will years kind module the you that five go been what's as point. Dominion at of project bigger the expect in fleet, see next for into to we year replacements

Jeff Osborne

it. it. Got Appreciate you. Thank

Operator

queue There will I this further in Chip back are at the Bottone. to to time. questions turn no call

Chip Bottone

projects. of you on on these to And thank Thank everybody takeaway for joining foundation. we're execution different much critical focused today. that profitability to we was what the have the Tiffany. Hopefully that and that what to And right. All reach you call very do very obviously is that the to build continue

You and the further comments keen very for well. on can and we efforts probably working those also voice lookout tell as on be from that results think should the a of are we're things I the other people that on

Thank hope to And you next we has So, earnings forward call. great look much. the on to very talking everybody day. a you

Operator

This concludes today's conference call.

now may disconnect. You

FuelCell Energy (FCEL) 7 Jun 182018 Q2 Earnings call transcript