Clearway Energy, Inc. · NYSE:CWEN
Clearway Energy — Q2 2020 Earnings Presentation
24 slides from Clearway Energy's earnings presentation, Aug 6, 2020
Slide 1: Second Quarter 2020 Results Presentation
Clearway Energy, Inc. Second Quarter 2020 Results Presentation August 6, 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 – CAFD Results: $86 MM in 2Q20 and $94 MM through 1H20; COVID-19 impacts remain immaterial – Closed residential solar portfolio sale for $75 MM; Recycled capital to close remaining interest in Repowering 1.0 for $70 MM – Maintaining 2020 CAFD guidance ▪ PG&E Bankru
Slide 5: Reaffirming Long Term Financial Objectives
Reaffirming Long Term Financial Objectives Sustainable Long Term Dividend Growth Robust Dividend Coverage 5-8% Annually 80-85% High End Through 2021 Payout Ratio Target Prudent Capital Allocation Conservative Capital Structure >$350 MM BB/Ba2 Of Annual Deleveraging Stable Ratings Disciplined Financi
Slide 6: Advancing Growth With Mesquite Star Investment
Advancing Growth With Mesquite Star Investment ($ millions) Transaction Summary Estimated Annual Financials Net Corporate Capital $79 Five Year Average Asset CAFD $8.3 Asset CAFD Yield ~10.5% ▪ Transaction Highlights: − Acquiring an Interest in the Mesquite Star Wind Project: 419 MW utility scale wi
Slide 7: Execution Leads To Sustained Dividend Growth While Adhering to Financial Objectives
Execution Leads To Sustained Dividend Growth While Adhering to Financial Objectives Key Long-Term Financial Objectives ▪ Annual DPS Growth: 5-8% ▪ Payout Ratio: 80-85% 2021 End Of Year DPS Target: Sustaining Long Term DPS Growth $1.34-1.36 Annualized New Execution 3Q20 DPS: • Mesquite Star Investmen
Slide 8: Financial Summary
QI Clearway Energy Financial Summary
Slide 9: Financial Update
Financial Update ($ millions) 2nd Quarter and Year to Date Results Maintaining 2020 CAFD Guidance1 2nd Quarter YTD Full Year Adjusted EBITDA $316 $541 CAFD1 $86 $94 CAFD1 $310 ▪ 2Q20 Financial Highlights: ▪ Guidance incorporates: − COVID-19 impacts have been immaterial − P50 median renewable energy
Slide 10: Closing Remarks and Q&A
Closing Remarks and Q&A Closing Remarks and Q&A
Slide 11: Progressing on 2020 Goals
Progressing on 2020 Goals ▪ Delivering on 2020 Financial Commitments – YTD CAFD results within sensitivity range and 2020 CAFD guidance reiterated – Pro Forma corporate leverage metrics continue to be aligned with target ratings; stable at both agencies ▪ CWEN Dividend Reset Upon Resolution of PG&E
Slide 12: Appendix
QI Clearway Energy Appendix
Slide 13: Appendix: Clearway Group Development Pipeline Update
Appendix: Clearway Group Development Pipeline Update Clearway Group Development Highlights 8.7 GW Pipeline Owned or Controlled by Clearway Group • Achieved COD for 419 MW Mesquite Star wind project By Project Type (MW) By Project Stage (MW) • Commenced construction on 160 MW repower wind asset 686 5
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 • Majority of output backed by contracts with investment grade Mesquite Star Utility Wind 419 TX Operational counterparties; 12 year weighted ave
Slide 15: Appendix: Renewable Portfolio Performance in 2020
Appendix: Renewable Portfolio Performance in 2020 Production Index Availability 2020 2020 2nd Quarter Q1 Q2 YTD YTD Wind Portfolio MW Apr May Jun California 947 111% 110% 91% 80% 93% 99% 97% Other West 73 105% 95% 98% 92% 95% 100% 96% Texas 251 76% 87% 84% 104% 91% 84% 96% Midwest 380 99% 95% 83% 12
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 June 30, 2020 ▪ Includes contribution of projects impacted by PG&E prior to bankruptcy emergence and Carlsbad which closed in December 2019 Renewable Production Variabili
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 ($ millions) 2020 2021 2022 2023 2024 Thereafter Total Conventional: El Segundo Energy Center, due 2023 53 57 63 130 - - 303 Marsh Landing, due 2023 60 6
Slide 19: Appendix: Current Operating Assets (As of June 30, 2020)
Appendix: Current Operating Assets1 (As of June 30, 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 10
Slide 20: Reg. G Schedules
QI Clearway Energy Reg. G Schedules
Slide 21: Reg. G: Actuals
Reg. G: Actuals Three Months Ended Six Months Ended ($ millions) 6/30/2020 6/30/2019 6/30/2020 6/30/2019 Net (Loss) Income $76 $(36) $(31) $(83) Income Tax Expense 26 4 4 (3) Interest Expense, net 93 130 260 228 Depreciation, Amortization, and ARO 99 91 201 176 Contract Amortization 22 17 44 34 Impa
Slide 22: Reg. G: 2020 Guidance and Pro Forma Outlook CAFD
Reg. G: 2020 Guidance and Pro Forma Outlook CAFD1 ($ millions) 2020 Full Year Pro Forma Guidance CAFD Outlook Net Income2 $160 $167 Income Tax Expense 30 35 Interest Expense, net 335 323 Depreciation, Amortization, Contract Amortization, and ARO Expense 455 469 Adjustments to reflect Clearway Energy
Slide 23: Reg. G: Growth Investments
Reg. G: Growth Investments ($ millions) Dropdown Portfolio Mesquite Star 5 Year Average from 5 Year Average from 2021 – 2025 2021 – 2025 Net Income $4 $(1.1) Interest Expense, net (4) - Depreciation, Amortization, and ARO Expense 8 8.0 Adjusted EBITDA 8 6.9 Cash interest paid 4 - Pro-rata Adjusted E
Slide 24: 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