Clearway Energy, Inc. · NYSE:CWEN
Clearway Energy — Q3 2023 Earnings Presentation
33 slides from Clearway Energy's earnings presentation, Nov 2, 2023
Slide 1: Third Quarter 2023 Results Presentation
Clearway Energy, Inc. Third Quarter 2023 Results Presentation November 2, 2023
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. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, and typically can be
Slide 3: Agenda
Agenda Strategic Update Christopher Sotos, Chief Executive Officer Business Update and Sarah Rubenstein, Chief Financial Officer Financial Summary Closing Remarks and Q&A Christopher Sotos, Chief Executive Officer 3
Slide 4: Simple Business Model and Strong Sponsor Continues to Position CWEN for Accretive Growth
Simple Business Model and Strong Sponsor Continues to Position CWEN for Accretive Growth ▪ Continued strong alignment as CWEN’s cost of capital remains well below target returns for Sponsor Continues to be developers Economically Aligned With CWEN ▪ Sponsor’s ownership of ~$1.8 BN of CWEN shares is
Slide 5: Clearway Enterprise Structured to Incentivize Sponsor To Maximize CWEN Shareholder Value
Clearway Enterprise Structured to Incentivize Sponsor To Maximize CWEN Shareholder Value Integrated Platform Drives Value for Clearway Energy, Inc. Investors… CWEN is Core to Clearway Enterprise Business Model... • Drop-downs continue to provide strategic value to CWEN’s sponsor as CWEN’s cost of ca
Slide 6: Sponsor's Diversified Development Pipeline To Drive CWEN's Long-Term Growth
Sponsor’s Diversified Development Pipeline To Drive CWEN’s Long-Term Growth Strength in Development Execution Plus Strategic Flexibility Supports Long-Term Growth at CWEN ▪ Sponsor continues to advance development projects that are compatible with CWEN’s growth By Project Type (MW)1 ▪ Significant in
Slide 7: Supportive Long-Term PPA Price Environment Accommodates a Higher Cost of Capital
Supportive Long-Term PPA Price Environment Accommodates a Higher Cost of Capital Demand for Significantly Higher US Renewables Capacity …While Developers are Reflecting the Current Capital in the Coming Years… Markets Environment Within PPA Origination Activity ▪ The combination of supportive federa
Slide 8: Straightforward Long-Term Capital Allocation and Financing Strategy
CWEN Continues to Have a Straightforward Long-Term Capital Allocation and Financing Strategy Simple Capital Structure Limited Interest Rate Risk No complex financings ~99% As well as no external capital needed to meet DPS Of consolidated debt fixed1 growth through ‘26 No corporate maturity until 202
Slide 9: Future Drop-Downs at Higher CAFD Yields Firming Up Visibility into the DPS Growth Outlook
Future Drop-Downs at Higher CAFD Yields Firming Up Visibility into the DPS Growth Outlook ($ millions) Most Recent Drop-Down Offers at Higher CAFD Yields …Improving Visibility into the DPS Growth Outlook Than Previously Anticipated… Through 2026 and Enhancing CWEN’s Portfolio Diversity Est. Est. 5-Y
Slide 10: Full Allocation of Thermal Proceeds Leads to No External Capital Needs to Meet 2026 DPS Growth Target
Full Allocation of Thermal Proceeds Continues to Lead to No External Capital Needs to Meet 2026 DPS Growth Target ($ millions, except per share figures) Updated budgetary projections Texas Solar Nova 1 and 2 Potential at Renewables Cedro Hill Repowering pre-2026 Committed Est. CAFD contributio
Slide 11: Conventional Resource Adequacy Contracts Enhance Visibility into Post 2026 Growth
Conventional Resource Adequacy Contracts Enhance Visibility into Post 2026 Growth Resource Adequacy Contracted Position for ▪ Further contract execution provides additional visibility into El Segundo, Marsh Landing, and Walnut Creek1 growth beyond 2026: ▪ Signed 400 MW contract at Marsh Landing for
Slide 12: Financial Summary
@)]I Clearway Energy Financial Summary
Slide 13: Financial Update
Financial Update ▪ CAFD of $156 MM in 3Q23; primarily impacted by lower energy gross margin Third Quarter Results; at Conventional and weak wind resource in August and September Reiterating 2023 Guidance Range ▪ Reiterating 2023 CAFD guidance range of $330-360 MM ▪ Initiating 2024 CAFD Guidance of $
Slide 14: Financial Update
Financial Update ($ millions) Financial Results 2023 CAFD Guidance Range Reiterated 3rd Quarter YTD Full Year Adjusted EBITDA $323 $857 CAFD $156 $289 CAFD $330-360 ▪ 3Q23 Financial Highlights ▪ The 2023 CAFD Guidance Range Factors In Conventional: ~$11MM headwind from lower than expected − Potent
Slide 15: Establishing 2024 CAFD Guidance of $395 MM
Establishing 2024 CAFD Guidance of $395 MM ($ millions) Timing of Capistrano debt Improved availability and lower maintenance Primarily related to CAFD realized from committed refinancing costs following required maintenance growth investments after 2024 upgrades at legacy wind sites in 2024 K
Slide 16: Closing Remarks and Q&A
Closing Remarks and Q&A Closing Remarks and Q&A
Slide 17: Remain on Track to Achieve Long-Term Objectives
Remain on Track to Achieve Long-Term Objectives ▪ 2023 CAFD Guidance Range Reiterated ▪ DPS Growth in 2023 In-Line With Long-Term Target ▪ Committed to Next Drop-Downs with Capital on Hand at Value-Accretive Economics – Committed to Cedar Creek Wind, Rosamond Central Battery Storage Addition, and Te
Slide 18: Appendix
@)]I Clearway Energy Appendix
Slide 19: Appendix: Clearway Group Development Pipeline Update
Draft –Confidential and Proprietary Appendix: Clearway Group Development Pipeline Update 29.1 GW Pipeline Owned or Controlled by Clearway Group Clearway Group Development Highlights • Achieved COD at Daggett 3, with COD's forthcoming at Daggett By Project Type (MW) By Project Stage (MW) 2, Victory P
Slide 20: Appendix: Committed Renewable Investments and Potential Future Drop-Down Opportunities
Appendix: Committed Renewable Investments and Potential Future Drop-Down Opportunities Committed Renewable Investments and Potential Future Drop-Down Opportunities Gross Capacity Estimated Asset Technology (MW)1 State COD/Funding Status2 Highlights Operational/ • Operational Daggett Solar 3 Utility
Slide 21: Appendix: Summary Allocation of ~$750 MM in Est. Excess Thermal Proceeds
Appendix: Summary Allocation of ~$750 MM in Est. Excess Thermal Proceeds ($ millions) Est. Long-Term Corp. Funding Corp. Capital Corp. Capital Remaining Capital Investment /Target COD Commitment1 Funded to Date To be Funded Allocation of $750 MM in Excess Proceeds Capistrano Portfolio 2H22 $110-130
Slide 22: Appendix: Renewable Portfolio Performance in 2023
Appendix: Renewable Portfolio Performance in 2023 Production Index Availability 2023 2023 3rd Quarter Q1 Q2 Q3 YTD YTD Wind Portfolio Net MW Jul Aug Sep California 947 97% 83% 111% 67% 108% 95% 90% 97% Other West 377 80% 71% 76% 84% 79% 80% 77% 94% Texas 1,064 104% 68% 93% 90% 93% 92% 87% 92% Midwes
Slide 23: Appendix: 2023 Portfolio CAFD Sensitivity and Seasonality
Appendix: 2023 Portfolio CAFD Sensitivity and Seasonality Variability of Expected Financial Performance: Based on Portfolio as of December 31, 2022 ▪ Production variability based on +/- 5% for both wind and solar Renewable Production Variability: for full year Annual CAFD Sensitivity Based on Origin
Slide 24: Appendix: 2024 Portfolio CAFD Sensitivity and Seasonality
Appendix: 2024 Portfolio CAFD Sensitivity and Seasonality Variability of Expected Financial Performance: Estimates as of November 2, 2023 ▪ Estimates include projects reaching COD in 2024 Renewable Production Variability: Annual CAFD Sensitivity Based on 2024 Guidance ▪ Production variability based
Slide 25: Appendix: Non-Recourse Project Debt Amortization
Appendix: Non-Recourse Project Debt Amortization Forecasted principal payments1 on non-recourse project debt as of December 31, 2022. Fiscal Year ($ millions) 2023 2024 2025 2026 2027 Thereafter Total Conventional: Carlsbad Energy Holdings & Carlsbad Holdco, due 2027 and 2038 24 25 28 35 37 570 719
Slide 26: Appendix: Operating Assets as of September 30, 2023
Appendix: Operating Assets1 as of September 30, 2023 Solar Wind Percentage Net Capacity PPA Percentage Net Capacity PPA Projects Ownership (MW) Offtake Counterparty Expiration Projects Ownership (MW) Offtake Counterparty Expiration Agua Caliente 51% 148 Pacific Gas and Electric 2039 Alta I-V 100% 72
Slide 27: Appendix: Adjusted EBITDA and CAFD by Asset Class
Appendix: Adjusted EBITDA and CAFD by Asset Class1 ($ millions) 2022 Adj. EBITDA and CAFD by Asset Class Pro Forma Adj EBITDA and CAFD by Asset Class 2022 Adj. EBITDA by Asset Class Pro Forma Adj. EBITDA by Asset Class (67% From Renewables) (83% From Renewables) 2% 17% 31% 43% 53% 30% 24% 2022 CAFD
Slide 28: Reg. G Schedules
@)]I Clearway Energy Reg. G Schedules
Slide 29: Reg. G: Actuals
Reg. G: Actuals Three Months Ended Nine Months Ended ($ millions) 9/30/2023 9/30/2022 9/30/2023 9/30/2022 Net Income (Loss) $15 $62 $59 $1,114 Income Tax Expense / (Benefit) 57 13 67 237 Interest Expense, net 34 45 170 137 Depreciation, Amortization, and ARO 133 129 389 379 Contract Amortization 47
Slide 30: Reg. G: 2023 CAFD Guidance
Reg. G: 2023 CAFD Guidance ($ millions) 2023 Full Year CAFD Guidance Net Income $95 – 120 Income Tax Expense 20 – 25 Interest Expense, net 300 Depreciation, Amortization, Contract Amortization, and ARO Expense 620 Adjustments to reflect Clearway Energy’s pro-rata share of Adjusted EBITDA from 50 Unc
Slide 31: Reg. G: 2024 CAFD Guidance
Reg. G: 2024 CAFD Guidance ($ millions) 2024 Full Year CAFD Guidance Net Income $90 Income Tax Expense 20 Interest Expense, net 330 Depreciation, Amortization, Contract Amortization, and ARO Expense 680 Adjustments to reflect Clearway Energy’s pro-rata share of Adjusted EBITDA from 50 Unconsolidated
Slide 32: Reg. G: Pro Forma CAFD Outlook
Reg. G: Pro Forma CAFD Outlook ($ millions) Prior Pro Forma Pro Forma CAFD Outlook CAFD Outlook Net Income $145 $145 Income Tax Expense 25 30 Interest Expense, net 395 390 Depreciation, Amortization, Contract Amortization, and ARO Expense 580 595 Adjustments to reflect Clearway Energy’s pro-rata sha
Slide 33: Reg. G: Growth Investments
Reg. G: Growth Investments1 ($ millions) Texas Solar Nova 1&2 5 Year Ave. 2025-2029 Net Income - Interest Expense, net 9 Depreciation, Amortization, and ARO Expense 16 Adjusted EBITDA 25 Cash interest paid (9) Cash from Operating Activities 16 Net distributions from non-controlling interest (5) Prin