Clearway Energy, Inc (NYSE:CWEN) Q4 2018 Earnings Conference Call - Final Transcript

Feb 28, 2019 • 08:30 am ET


Clearway Energy, Inc (NYSE:CWEN) Q4 2018 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen, and welcome to Clearway Energy, Inc.'s Fourth Quarter 2018 Earnings Conference 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 call is being recorded.

I would now like to turn the conference over to your host Mr. Chris Sotos, President and Chief Executive Officer.

Christopher Sotos

Thank you, Sylvia. Good morning. Let me thank you for taking time to join today's call. Joining me this morning is Chad Plotkin, our chief financial officer as well as Craig Cornelius, President and CEO Clearway Energy Group. Craig will be available for the Q&A portion of our presentation.

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

In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's presentation.

Turning to Page 4; for recap on 2018, I'd like to highlight that Clearway Energy generated for full year CAFD of $291 million, ahead of our guidance and adjusted EBITDA of $983 million. During a year in which the Clearway platform was undergoing a transformation with a new sponsor, we managed to deploy $94 million in new growth capital at accretive CAFD yields. We also raised over $750 million in new capital to fund this growth as well as managed our balance sheet to take into account the results of our tender offers and corporate maturities.

Looking forward to 2019, and as discussed in the February 14th business update call, our primary focus in the near term is to manage the platform through this period of uncertainty created by the PG&E bankruptcy. We are maintaining our CAFD guidance of $270 million, inclusive of contributions from PG&E related projects; we're reducing our quarterly dividend to $0.20 per share, while the situation with PG&E unfolds to preserve our balance sheet flexibility.

Once this period clears, our Board would revisit our normalized divide level commensurate with our long-term CAFD per share generation. Clearway Energy was also able to lower its capital commitments by over $500 million, primarily by utilizing the GIP backstop facility, while still dedicating capital to the group projects with $86 million of capital to be deployed during 2019. We also enter this period of uncertainty with limited near-term debt maturities with only $45 million of corporate debt due in 2020.

As we work through 2019, the support from our sponsor, GIP is critical, especially as it relates to their continued focus on building long-term growth for CWEN. This has been demonstrated by their backstop of the Carlsbad purchase from NRG for a future acquisition