Clearway Energy, Inc (NYSE:CWEN) Q2 2019 Earnings Conference Call - Final Transcript

Aug 06, 2019 • 08:00 am ET


Clearway Energy, Inc (NYSE:CWEN) Q2 2019 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Clearway Energy Second Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer section, and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call may be recorded. I would now like to introduce your host for today's conference, President and CEO Chris Sotos. You may begin.

Christopher Sotos

Thank you. Good morning.

Let me first thank you for taking the 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 of Clearway Energy Group. Craig will be available for the Q&A portion of our presentation.

Before we begin, I would 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 date. 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. This was a challenging quarter and first half of 2019 for Clearway Energy with the outage at CVSR and continued poor weather conditions impacting renewable energy production through the end of June. Chad will discuss this in more detail, but these items and the importance of the second quarter have pushed expected performance outside of Clearway's probable distribution. Therefore, we are revising 2019 CAFD guidance to $250 million, which assumes median production for the rest of the year while incorporating our growth investments as well.

The contracts impacted by PG&E continue to perform and from our perspective, the recent legislative actions in California have significantly improved the prospects of a resolution on the bankruptcy process next year. In addition, we are announcing a third-quarter dividend of $0.20 per share, the same dividend as last quarter. This is consistent with our view that until CWEN obtains additional visibility around the PG&E bankruptcy and has full access to its project distributions, dividends paid to shareholders will be aligned with available corporate liquidity and our target payout ratio.

Looking forward, CWEN's pro forma CAFD outlook has now increased to $300 million due to our recent closing of the Repowering 1.0 partnership with Clearway Group. We also continue to advance our prior growth commitments in renewables, with additional investment in the Hawaii Solar Phase 1 project and the DG partnerships. Lastly, we continue to focus on diversification of the platform with the addition of incremental growth at the thermal platform, with the closing of our Duquesne acquisition in May, as well as our Mylan Labs project, with anticipated COD in the second half of 2019.

With the continued development efforts by our sponsor company, Clearway Group, we are pleased to