Clearway Energy, Inc. · NYSE:CWEN
Clearway Energy — Q1 2020 Earnings Presentation
26 slides from Clearway Energy's earnings presentation, May 7, 2020
Slide 1: First Quarter 2020 Results Presentation
Clearway Energy, Inc. First Quarter 2020 Results Presentation May 7, 2020
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are subject to certain risks, uncertainties and assumptions and typically can be identi
Slide 3: Agenda
Agenda Business Update Christopher Sotos, Chief Executive Officer Financial Summary Chad Plotkin, Chief Financial Officer Closing Remarks and Q&A Christopher Sotos, Chief Executive Officer 3
Slide 4: Business Update
Business Update ▪ Financial Update – 1st quarter CAFD of $8 MM; results in-line with seasonality and sensitivity ranges – Maintaining 2020 CAFD guidance – Announcing 2nd quarter dividend of $0.21 per share; additional dividend growth subject to the resolution of the PG&E bankruptcy ▪ COVID-19: Focus
Slide 5: Advancing Growth With New Drop-Down Transactions
Advancing Growth With New Drop-Down Transactions ($ millions) Transaction Summary Estimated Annual Financials Net Corporate Capital1 $241 Five Year Average Asset CAFD $23 Asset CAFD Yield ~9.5% ▪ Transaction Highlights: − Additional Interest in 338 MW of Repowered Wind Projects and 144 MW of New Con
Slide 6: Improved CAFD Per Share Growth Outlook Due to New Drop-Down and Expected Available Cash
Improved CAFD Per Share Growth Outlook Due to New Drop-Down and Expected Available Cash ($ millions) Uses Sources Est. Drop-Down Capital $241 Excess PG&E “Trapped” Cash as of 1Q20 $148 Implied Corp. Debt Financing $93 Total Uses $241 Total Sources $241 ~$1.70 Pro Forma CAFD Outlook ~$1.61 CAFD Assum
Slide 7: Financial Summary
QI Clearway Energy Financial Summary
Slide 8: Financial Update
Financial Update ($ millions) 1st Quarter Results Maintaining 2020 CAFD Guidance1 1st Quarter C Full Year Adjusted EBITDA $225 CAFD1 $8 CAFD1 $310 ▪ 1Q20 Financial Highlights: ▪ Guidance Continues to Assume: - Results within sensitivity ranges − P50 median renewable energy production for full year -
Slide 9: Closing Remarks and Q&A
Closing Remarks and Q&A Closing Remarks and Q&A
Slide 10: Progressing on 2020 Goals
Progressing on 2020 Goals ▪ Delivering on 2020 Financial Commitments – 1st quarter results in-line with expectations and 2020 CAFD guidance reiterated – Managing operations safely and reliably during COVID-19 pandemic; no material financial impact currently expected – Pro Forma corporate leverage me
Slide 11: Appendix
QI Clearway Energy Appendix
Slide 12: Appendix: PG&E Project Exposure Overview
Appendix: PG&E Project Exposure Overview ($ millions where applicable) Projects or Investments Impacted by PG&E Bankruptcy Balance Sheet (3/31/20) CWEN Non-Recourse Net PPE or Equity Est. 2020E Asset Customer Ownership Net MW COD PPA Expiration Debt Balance1 Investment Asset CAFD2 Marsh Landing PG&E
Slide 13: Appendix: Clearway Group Development Pipeline Update
Appendix: Clearway Group Development Pipeline Update Clearway Group Development Highlights 8.8 GW Pipeline Owned or Controlled by Clearway Group • Increased advanced + construction stage pipeline by By Project Type (MW) By Project Stage (MW) approximately 600 MW to 1.6 GW 516 796 • Initiated or secu
Slide 14: Appendix: Clearway Energy ROFO and Committed Renewable Investments
Appendix: Clearway Energy ROFO and Committed Renewable Investments Committed Investments Asset Technology Net Capacity (MW) State Estimated COD Highlights Rattlesnake Utility Wind 144 WA 2020 • 20 year PPA with Avista Remaining Interest in Wind 283 TX 2020 • PPAs run through 2027-2029 Repowering 1.0
Slide 15: Appendix: Renewable Portfolio Performance in 2020
Appendix: Renewable Portfolio Performance in 2020 Production Index Availability 2020 2020 1st Quarter YTD YTD Wind Portfolio MW Jan Feb Mar California 947 221% 92% 71% 111% 97% Other West 73 103% 119% 93% 105% 97% Texas 251 90% 64% 74% 76% 95% Midwest 380 103% 105% 89% 99% 77% East 122 98% 92% 94% 9
Slide 16: Appendix: 2020 Portfolio CAFD Sensitivity and Seasonality
Appendix: 2020 Portfolio CAFD Sensitivity and Seasonality Variability of Expected Financial Performance: Based on Portfolio as of March 31, 2020 ▪ Includes contribution of projects impacted by PG&E and Carlsbad which closed in December 2019 Renewable Production Variability: Annual CAFD Sensitivity ▪
Slide 17: Appendix: Other Est. Cash Flow Drivers
Appendix: Other Est. Cash Flow Drivers To increase visibility and assist in forecasting, the following table summarizes notable but lesser known CAFD drivers associated with projects and financing activities: • Schedule based on portfolio as of 12/31/2019 • 2021E represents YoY changes from 2020E ⎯
Slide 18: Appendix: Non-Recourse Project Debt Amortization
Appendix: Non-Recourse Project Debt Amortization Forecasted principal payments 1 on non recourse project debt as of December 31, 2019: Fiscal Year 2020 2021 2022 2023 2024 Thereafter Total Conventional: El Segundo Energy Center, due 2023 53 57 63 130 - - 303 Marsh Landing, due 2023 60 62 65 19 - - 2
Slide 19: Appendix: Business Renewables and Residential Solar Investment Profile
Appendix: Business Renewables and Residential Solar Investment Profile (as of March 31, 2020)1,2 Portfolio Characteristics Portfolio Credit Quality3 Geographic Distributions Capacity by Investment • 68% of residential customers ≥ 750 • 96% of residential customers ≥ 700 175 MW • >99% of commercial c
Slide 20: Appendix: Current Operating Assets (As of March 31, 2020)
Appendix: Current Operating Assets1 (As of March 31, 2020) Solar2 Wind Percentage Net Capacity PPA Percentage Net Capacity PPA Projects Ownership (MW) Offtake Counterparty Expiration Projects Ownership (MW) Offtake Counterparty Expiration Agua Caliente 16% 46 Pacific Gas and Electric 2039 Alta I-V 1
Slide 21: Reg. G Schedules
QI Clearway Energy Reg. G Schedules
Slide 22: Reg. G: Actuals
Reg. G: Actuals ($ millions) Three Months Ended 3/31/2020 3/31/2019 Net Loss $(107) $(47) Income Tax Expense (22) (7) Interest Expense, net 167 98 Depreciation, Amortization, and ARO 102 85 Contract Amortization 22 17 Loss on Debt Extinguishment 3 — Mark to Market (MtM) Losses on economic hedges 5 7
Slide 23: Reg. G: 2020 Guidance and Pro Forma Outlook CAFD
Reg. G: 2020 Guidance and Pro Forma Outlook CAFD1 ($ millions) Prior Pro Updated Pro 2020 Full Year Forma CAFD Forma CAFD Guidance Outlook Outlook Net Income2 160 170 170 Income Tax Expense 30 35 35 Interest Expense, net 335 320 320 Depreciation, Amortization, Contract Amortization, and ARO Expense
Slide 24: Reg. G: Growth Investments
Reg. G: Growth Investments ($ millions) Dropdown Portfolio 5 Year Average from 2021 – 2025 Net Income 4 Interest Expense, net (4) Depreciation, Amortization, and ARO Expense 8 Adjusted EBITDA 8 Cash interest paid 4 Cash from Operating Activities 12 Net distributions from non-controlling interest 8 M
Slide 25: Reg. G: PG&E Related CAFD
Reg. G: PG&E Related CAFD ($ millions) 2020 CAFD Total Potential Exposure Net Income 109 Interest Expense, net 51 Depreciation, Amortization, and ARO Expense 72 Adjustments to reflect Clearway Energy’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates 50 Adjusted EBITDA 282 Cash inter
Slide 26: Reg. G Non-GAAP Financial Information
Reg. G Non-GAAP Financial Information EBITDA and Adjusted EBITDA: EBITDA and Adjusted EBITDA are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. The presentation of Adjusted EBITDA