Clearway Energy, Inc (NYSE:CWEN) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 08:00 am ET

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Clearway Energy, Inc (NYSE:CWEN) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by and welcome to the Clearway Energy, Inc. second quarter 2020 earnings conference call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Chris Sotos. Thank you. Please go ahead, sir.

Executive
Christopher Sotos

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; Akil Marsh, our Investor Relations Manager; and Craig Cornelius, President and CEO of the 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 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 four, for the second quarter of 2020, Clearway achieved CAFD of $86 million, for a total of $94 million in the first half of 2020. These results are within our expected sensitivity ranges. To date, the effects of COVID remain immaterial, with our teams maintaining safe and reliable operations through this difficult time. As previously announced, we closed on the sale of our residential solar portfolio for $75 million, and merely recycled that capital to close the first project in the April Drop-Down for the remaining interest that C1 did not already own, and repowering a 1.0 for $70 million.

After a year and a half, I am happy to note that PG&E has emerged from bankruptcy, and consistent with our commitments, we are recalibrating the dividend in line with our long-term financial objectives. So today, we are announcing a 49% increase to the company's dividend to $1.25 a share annualized, which is in line with our payout ratio objectives relative to 2020 CAFD guidance. As of the end of June, there was $168 million in predictable cash at the PG&E-related projects. And as we've indicated previously, we will allocate this to committed growth investments. Through this capital deployment, and with the binding agreements in place we already have, Clearway Energy Inc. anticipates being able to increase the dividend at the upper end of our 5% to 8% long-term growth rate for 2021. In addition, during the quarter, we raised $278 million in corporate capital, with $250 million issued as a tack-on to the 2028 green bond and $28 million under the ATM program. The Clearway Energy Board has also authorized a new $150 million ATM program to fund growth within our balance sheet objectives. With the constraints from PG&E now behind us, during the quarter, we were also able to advance