Clearway Energy, Inc.

Good day, and thank you for standing by. Welcome to the Clearway Energy, Inc. Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chris Sotos, President and CEO of Clearway Energy, Inc. Please go ahead.

Good morning. Let me first thank you for taking the time to join Clearway Energy, Inc.' 's fourth quarter call. Joining me this morning are Akhil Marsh, Director of Investor Relations, Sarah Rubenstein, CFO, and Craig Cornelius, President and CEO of Clearway Energy Group, our sponsor. 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 the 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 STC filings. In addition, we'll 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. Turn to page four. Despite a difficult year from a renewable resource perspective, C1's 2023 CAFTI came within its revised guidance range of $330 to $360 million at $342 million, with a fourth quarter CAFTI of $53 million. Commercial operations were also achieved on DAGA2 and Texas Solar Nova 1 in the fourth quarter, which will help drive CAFTI in 2024 and beyond. C1 also committed to approximately $215 million of new corporate capital deployments in 2023, an average five-year annual CAFTA yield of approximately 10%, while further diversifying C1's fleet. Looking to 2024, we are announcing a dividend increase of 1.7% for the quarter to bring our quarterly dividend to 0.4033 per share, or 1.6132 on an annualized basis, with targeted growth of 7% for the full year of 2024. Clearway is also reaffirming its CAFTA guidance of $395 million for 2024 with CAFD results in line with expectations today. Clearly continues to execute on its long-term growth targets of $2.15 of CAFD per share, and is reaffirming our ability to achieve the upper range of 5% to 8% of growth through 2026 without needing to raise external capital. As we transition to focus on growth beyond 2026, we continue to manage our RA contracting positions in the 2026 to 2030 timeframe, pursuing both value and certainty to drive value for shareholders. In addition, Oshkosh's 29-gigawatt renewable pipeline continues to develop with approximately 7 gigawatts of late-stage projects targeting CODs over the next four years. So we will continue to execute toward its 2026 $2.15 CAFTI per share target during 2024, while also focusing on providing further growth visibility beyond this CAFTI goal in the years to come. Please turn to page five. Page 5 provides a summary of Clearway's over $215 million of committed growth investments announced in 2023, some of which are already operational with respect to Texas Solar Nova 1, with the remainder to come online during 2024. These investments are expected to generate five-year annual average CAFTA yields of approximately 10%, underpinned by long-term contracts of 15 years and over. The assets comprise diverse generation, with approximately 620 megawatts of wind and solar generation added and approximately 150 megawatts of storage. These assets are funded with the excess thermal proceeds and continue clearly as execution for the $2.15 CAFD per share goal when these proceeds are fully developed. Please turn to page six. Slide six demonstrates our path to $2.15 per share with the remaining approximately $200 million of excess thermal proceeds to be deployed in approximately 10% five-year annual average CAFD yield. These remaining assets should hit their commercial operation dates during 2025. As we move from finishing deployment of our excess thermal proceeds into growth investments, we look to additional sources of growth beyond 2026. Our first avenue of growth is additional drops from our sponsor. We will provide additional color on potential drops on the next slide, and later this year we'll anticipate providing estimates on capital deployment and cap yields for new projects beyond those identified here for use of the thermal proceeds. An additional avenue of growth is resource adequacy awards and pricing in 2027 and beyond. As highlighted last call, we continue to add length to our RA capacity contracts at strong pricing to drive value. Lastly, third-party M&A is always a focus, and while due to capital market volatility in 2023, we didn't execute on any third-party M&A, Clearway remains focused on this market in 2024. Turning to page 7. In order to provide additional color around opportunities from our sponsors' late-stage pipeline for the 2026 to 2027 timeframe, We thought it was appropriate to provide a high-level summary of further potential drop-down activity for these years. Our sponsor is working on over 4 gigawatts of fleet optimization and expansion opportunities with CODs in 2026 and 2027, which are well diversified between wind repowerings, additional new wind assets, solar storage hybrid assets, and standalone storage projects. These investments are highly diversified also by off-taker and market and will benefit from the ability to deploy domestic content and invest in energy communities under the IRA. thereby delivering competitively priced energy to customers while meeting return requirements and reducing risk to Clearway's overall fleet. In summary, while it's too early to provide details in terms of potential capital deployment and return levels, investors can be assured there's a strong pipeline of growth at our sponsor that should add significant assets to Clearway Energy Inc.' 's portfolio through the middle of the decade. As always, we will raise capital prudently with a focus on efficient execution to optimize accretion. Now, I'll turn it over to Sarah.

Thanks, Chris. On slide nine, we provide an overview of our financial results, which includes full-year adjusted EBITDA of $1.058 billion and CAFTE of $342 million, which was within the previously provided revised guidance range of $330 to $360 million. Fourth quarter adjusted EBITDA was $201 million and CAFTE was $53 million. both consistent with revised internal expectations updated in August of 2023 to reflect renewable resource impact. Our fourth quarter results reflected strong conventional availability and the benefit of timing of maintenance, capital expenditures, and other items, offset in part by lower wind resource, which was a trend observed throughout the industry in the fourth quarter. Despite the challenges impacting 2023 full-year CAFTI, The company remains well-positioned for growth with a strong balance sheet, pro forma credit metrics in line with target ratings, and 99% of its consolidated long-term debt with a fixed interest cost. In addition, the company's earliest corporate debt maturity is 2028, and there continues to be no external capital needs to fund the line-of-sight growth to meet our dividend per share growth objectives through 2026. The remaining thermal sale proceeds are available to fund committed 2023 investments and offered projects that are expected to facilitate achievement of line-of-sight CAFTI per share of $2.15. We are reiterating our 2024 CAFTI guidance at $395 million. Among other factors, our 2024 CAFTI guidance continues to factor in current P50 median production estimates, previously disclosed expectations for maintenance capital expenditures in 2024 and timing of committed growth investments based on estimated project CODs, but excludes CAFTI from committed growth investments beyond 2024. Our pro forma CAFTI outlook remains at $415 million, which along with anticipated growth investments using the remaining thermal sale proceeds, supports our potential line-of-sight CAFTI and dividend per share growth target. Now I will turn it back to Chris for closing remarks.