Q4 2023 Clearway Energy Inc Earnings Call

February 22, 2024

Yeah.

Operator: 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.

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.

Operator: 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. If you would then hear an automated message advising your hand is, To withdraw your question, please press star 11 again, please be advised that today's conference is being. I would now like to hand the conference over to your speaker today, Chris Sotos, President and CEO of Clearway Energy. Please go ahead. Good morning.

After the speaker's presentation, there will be a question and answer session.

To ask a question. During this session you will need to press star one one of your telephone you will then hear an automated message revising your hand is raised.

To withdraw your question. Please press star one 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, My first thank you for taking the time to join Clearway Energy, Inc. 's fourth quarter call.

Christopher S. Sotos: Let me first thank you for taking the time to join Clearway Energy Inc.'s fourth quarter call. Joining me this morning are Akil Marsh, Director of Investor Relations, Sarah Rubenstein, CFO, and Craig Crinonellis, 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 four 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 SDC filings. In addition, we refer to both GAAP and non-GAAP financial measures.

Joining me. This morning are Joe Marsh director of Investor Relations, Sir Rubenstein, CFO and Craig drilling.

President and CEO of Clearway Energy group, our sponsor can be available for 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'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 today's presentation.

Christopher S. Sotos: 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 4. Despite a difficult year from a renewable resource perspective, C1's 2023 CAFD came within its revised guidance range of $330 to $360 million at $342 million, with a fourth quarter CAFD of $53 million. Commercial operations were also achieved on DAGA 2 and Texas Solar NOVA 1 in the fourth quarter, which will help drive CAF in 2024 and beyond. CWIN also committed to approximately $215 million of new corporate capital deployments in 2023, an average five-year annual cap-to-yield of approximately 10%, while further diversifying CWIN's fleet. Looking ahead to 2024, we are announcing a dividend increase of 1.7% for the quarter, bringing our quarterly dividend to 0.4033 per share, or 1.6132 on an annualized basis, with targeted growth of 7% for the full year

Turning to page four.

Despite a difficult year from a renewable resource perspective.

Q1, 2023 cap became within our revised guidance range of $330 million to $360 million at $342 million with the fourth quarter, Cathy up $53 million.

Commercial operations were also achieved on Doug it too in Texas. So we're number one in the fourth quarter, which will help drive cap in 2024 and beyond.

So and also committed to approximately $215 million of new corporate capital deployments in 2023 on average five year annual cap to yield of approximately 10% while further diversifying C. One sleep.

Looking to 2024, we are announcing a dividend increase of one 7% for the quarter, bringing our quarterly dividend to <unk> 4033 per share or $1 six <unk> on an annualized basis with targeted group growth of 7% for the full year of 2024.

Christopher S. Sotos: Clearway is also reaffirming its CAFD guidance of $395 million for 2024, with CAFD results in line with expectations today, and clearly continues to execute at long-term growth targets of $2.15 per share and is reaffirming its 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 CAFDI per share target during 24, while also focusing on providing further growth visibility beyond this CAFDI goal in the years to come. Please turn to page 5.

Clearly is also reaffirming its guidance of $395 million for 2024 with Caf II results in line with expectations to date.

Clearly continues to execute on its long term growth targets of $2.15 of <unk> 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 a contracting positions into 2026 to 2030 timeframe pursuing both value uncertainty to drive value for shareholders and in addition, our sponsors 2009 gigawatt renewable pipeline continues to develop with approximately seven gigawatts of late stage projects targeting cod's over the next four year.

Yes.

So we will continue to execute towards 2026 to $2 15 per share target. During 24, while also focusing on providing further growth visibility beyond this cathy goal in the years to come.

Please turn to page five.

Despite advances somebody a clearly has over $215 million of committed growth investments announced in 2023, some of which are already operational with respect to Texas sold in over one with the remainder to come online during 2024.

These investments are expected to generate five year annual average cap yields of approximately 10% underpinned by long term contracts of 15 years and over.

Christopher S. Sotos: Page 5 of this assembly clearly shows over $215 million of committed growth investments announced in 2023, some of which are already operational with respect to Texas Solenova-1, with the remainder to come online during 2024. These investments are expected to generate five-year annual average cap-to-yields of approximately 10 percent, 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 will continue to clearly execute on the $2.15 CAFD per share goal when these proceeds are fully developed. Please turn the page.

The assets comprise diverse generation with approximately 620 megawatts of wind and solar generation added approximately 150 megawatts of storage.

These assets are funded with the excess thermal proceeds and continued clearly execution or the $2 15 <unk> per share goal on 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 an approximate 10% five year annual average cap deal. 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 who will provide additional color on potential drops on the next slide and later this year would anticipate providing estimates on capital deployment and cap the yields on new projects beyond those identified here for use of the thermal proceeds.

Christopher S. Sotos: Slide 6 demonstrates our path to $2.15 per share, with the remaining approximately $200 million of excess thermal proceeds to be deployed at 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 investment, we look to additional sources of growth beyond 2026. Our first avenue of growth is additional drops from our sponsor.

Additional Avenue of growth is resource adequacy awards in pricing in 2027 and beyond as highlighted last call. We continue to add linked to our Rd capacity contracts are strong pricing to drive value.

Lastly, third party M&A is always a focus and all due to capital market volatility in 2023, we didn't execute on a third party M&A clearly remains focused on this market in 2024.

Turning to page seven.

In order to provide additional color around the opportunities from our sponsors late stage pipeline for 2026 to 2027 timeframe.

Thought it was appropriate to provide a high level summary of further potential dropdown activity for these years.

Our sponsor is working on over four Gigawatts of fleet optimization and expansion opportunities with Cod's in 2026, and 27, which are well diversified between wind repowering additional new wind assets solar storage hybrid assets and stand alone storage projects. These.

Christopher S. Sotos: We will provide additional color on potential drops on the next slide, and later this year, we anticipate providing estimates on capital deployment and cap-to-yields for new projects beyond those identified here for use of the thermal process. An additional avenue of growth is resource adequacy awards and pricing in 2027 and beyond. As highlighted in our last call, we continue to add length to our RE capacity contracts at strong prices 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 a third party M&A, clear rate remains focused on this market in 2024. Turn to page 7.

These investments are highly diversified also buy off taker and market and will benefit from the ability to deploy domestic content and invest in energy communities under the IRI, thereby delivering.

And competitively priced energy to customers, while meeting our return requirements and reducing risk to clear ways overall fleet.

In summary, while it's too early to provide details in terms of potential capital deployment and return levels.

So as you can be assured theres, a strong pipeline of growth at our sponsor I should add significant assets to Clearway Energy, Inc portfolio through the middle of the decade.

As always we will raise capital prudently with a focus on efficient execution to optimize the creature.

I'll turn it over to Sarah.

Thanks, Chris.

Slide nine we provide an overview of our financial results.

This includes full year adjusted EBITDA of 1.58 billion and cap D of $342 million, which was within the previously provided revised guidance range of $330 million to $360 million.

Christopher S. Sotos: 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 by offtaker 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.

Fourth quarter, adjusted EBITDA was $201 million and KFC was $53 million.

It's consistent with revised internal expectations updated in August of 2023 to reflect a 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 by the trend observed throughout the industry in the fourth quarter.

Despite the challenges impacting 2023 full year Kathy the company remains well positioned for growth with a strong balance sheet pro forma credit metrics in line with target ratings are 99% debit consolidated long term debt with a fixed interest cost. In addition, the company's earliest corporate debt.

Surety 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 objective through 2020.

Christopher S. Sotos: 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 from our sponsor that should add significant assets to Clearway Energy Inc.'s portfolio by the middle of the decade. As always, we will raise capital prudently with a focus on efficient execution to optimize a great. I'll turn it over to Sarah. Thanks, Chris.

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 cafe per share of $2 15.

We are reiterating our 2020 for KFC guidance at $395 million.

Among other factors our 2020 forecast the guidance continues to factor in current P. 50 median production estimates.

Sarah Rubenstein: On slide 9, we provide an overview of our financial results, which includes full-year adjusted EBITDA of $1.058 billion and CAFD 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 CAFDI was $53 million. Those 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 resources, which was a trend observed throughout the industry in the fourth quarter. Despite the challenges impacting 2023 full-year CAFD, 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 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 CAFD per share of $2.15.

Previously disclosed expectations for maintenance capital expenditures in 2024 and timing of committed growth investments based on estimated project Sidoti.

But excluded from.

From committed growth investments beyond 2024.

Our pro forma cap the outlook remains at $415 million, which along with anticipated growth investment using the remaining thermal sale proceeds.

<unk>, our potential line of sight, Kathy and dividend per share growth target.

Now I will turn it back to Chris for closing remarks.

Thank you Sarah.

Turning to slide 11, our goals for 2024 simple.

First to focus on delivery of our 2020 forecast guidance, while achieving our 7% EPS growth in 2024 and in order to do this we will target to improve availability from the Capex investment we are making in several of our sites second.

Second we continue to execute toward our $2 15 of <unk> per share target once all the excess thermal proceeds are deployed and fully operational while adhering to our underwriting standards.

Sarah you want to begin to move the conversation around growth to beyond 2026 through a combination of additional re contracting risk.

We're providing visibility on further dropdowns in 2026 2007 period as we progress through 2020 for additional improvements in the existing fleet the repowering.

And finally in either continuing to pursue M&A and our disciplined capital targets operator, please open the lines for questions.

As a reminder to ask a question. Please press star one one on you touched on telephone and wafer name to be announced.

To withdraw your question. Please press star one again.

Sarah Rubenstein: We are reiterating our 2024 CAFD guidance at $395 million. Among other things, our 2024 CAFD guidance continues to factor in current P50 median production estimates. Previously disclosed expectations for maintenance capital expenditures in 2024 and the timing of committed growth investments based on estimated project CODs, but excludes CAFD from committed growth investments beyond 2024. Our pro forma CAFD outlook remains at $415 million, which, along with anticipated growth investments using the remaining thermal sale proceeds, supports our potential line-of-sight CAFD and dividend per share growth targets. Now I will turn it back to Chris for his closing remarks. Thank you, Sarah.

Please stand by while we compile the Q&A roster.

Our first question comes from the line of Michael <unk> with Evercore ISI. Your line is now open.

Yes, hi, good morning, Thanks for taking my question.

So you highlighted the shift in the timing.

<unk> capex it looks like spend any additional maintenance in the third quarter.

From the fourth quarter between the two quarters you came.

Came in at $22 million for the year versus guidance for $35 million, yet you reiterated your maintenance Capex forecast for 2024, just wondering if you could share more detail about this.

Sure probably not going to get into a lot of detail just with all of those numbers are material to overall guidance I'll turn it over to Sarah in terms of any further clarity, but for US. Obviously 2023 was a disappointing year from generation overall, so maintenance capex was not needed as much due to lower generation. So I think from our perspective, while we kind of gave guidance.

For 2024 of maintenance Capex to your point, we really look comprehensively at what happened in 2003 some of the availability shortfalls, we suffered on where we can kind of spend those dollars to improve availability and 24 to move on so I think those are really kind of a lot of the points around maintenance Capex is it's not a question of what we thought it was unfortunately due to the generation.

Christopher S. Sotos: Term this flat 11. Our goals for 2024 are simple. First, to focus on delivery of our 2024 CAFDI guidance while achieving our 7% DPS growth in 2024. In order to do this, we'll target to improve availability from the CAPEX investment we are making at several of our sites. Second, we continue to execute toward our $2.15 cap-to-per-share target once all the excess thermal proceeds are deployed and fully operational while adhering to our underwriting standards. Third, we want to begin the growth conversation around growth beyond 2026 through a combination of additional RA contracting, providing visibility on further drop-downs in the 2026-2027 period as we progress through 2024, additional improvements in the existing fleet through repowerings, Operator, please open the line for questions. Thank you. To withdraw your question, please press star 118.

Being lower than we had targeted.

Capex is also thereby lower and really kind of putting those two together, but sarah any other details.

No I think you covered it I mean, maybe just to highlight the $3 95.

Kathy that we're guiding to in 2024 includes.

The amount that we would potentially have.

<unk> decided not to do in 2023 and to do in 2024. So there is nothing that we have to worry about.

Revising 2020, or four and to Chris's point I think overall the.

The upcoming you lower than budget for maintenance Capex for 2023 really just reflects our results for 2023.

Great. Thank you and then secondly for me.

You reiterated that you still don't need external capital through 2026.

<unk> been talking about how you are targeting.

Four to four five times corporate debt to corporate EBITDA. Just wondering once you deploy all of the thermal proceeds presumably youre all organically delever the balance sheet, a little bit just wondering if you could say where do you expect to be within that leverage range now and if youre at the low end would you consider deploying X.

Operator: Please stand by while we compile the Q&A. Our first question comes from the line of Michael Lonegan with Evercore ISI. Your line is now, Yeah, hi.

Michael Lapides: Thank you for taking my question. So you highlighted the shift in the timing of maintenance catbacks, additional maintenance in the third quarter from the fourth quarter, you know, between the two quarters. You came in at $22 million for the year versus guidance for $35 million, yet you reiterated your maintenance Cap-Ex forecast for 2024. I'm just wondering if you could share more detail about that.

Capital to target the midpoint for instance.

Sure I think a couple of questions in there so hopefully I'll unpack. The first point is it's not as though that we're actually going to rest on our laurels for $2 15 by 2026, Thats, just where the number falls out given the external given the capital from thermal so we actually hope to do better but right now that's what we can show a line of sight, Don just for a point.

Christopher S. Sotos: We're probably not going to get into a lot of detail, just because a lot of those numbers are immaterial to overall guidance. I'll turn it over to Sarah for any further clarification. But for us, obviously, you know, 2023 was a disappointing year for generation overall, so maintenance capex was not needed as much due to lower generation. So I think from our perspective, while we kind of gave guidance for 2024 maintenance capex, to your point, we really looked comprehensively at what happened in 23, some of the availability shortfalls we suffered, and where we could kind of spend those dollars to improve availability in 24 to move on. So I think those are really kind of a lot of the points around maintenance capex. It's not a question of what we thought it was. You know, unfortunately, due to the generation kind of being lower than we had targeted, maintenance capex is also thereby lower, and I'm really kind of putting those two together. Sarah, any other details?

Clarity.

I don't think as we think about the overall debt. Yes. There was about two <unk> two $5 billion of bonds and once we deploy over thermal proceeds on a run rate basis, that's about $435 million of Kathy you add back corporate interest of about call it $90 billion to $95 billion.

At about four times call it debt corporate debt to corporate EBITDA. So I think to your question.

There should be excess leverage capacity to be fair I don't want to pin everything on one credit staff thats. The easiest one we use to translate the outerwear and an 8% interest rate environment. Obviously other things move around so I think to your question. We do think we'd be once all the thermal capitals deployed on the low end of our target four to four and a half, but also would be a little bit.

To your question there are some ratings issues a number of other metrics, but just the simplest one to kind of walk through so hopefully I answered.

Question.

Yes. Thank you.

I appreciate the time.

Yes.

Thank you our.

Our next question comes from the line of Mark Jarvi with CIBC. Your line is now open.

Yes, good morning, Glenn maybe just coming back to the comments around M&A third party M&A I didn't transact in 2023.

Sarah Rubenstein: No, I think you covered it. Maybe just to highlight the 395 of CAFD that we're guiding to in 2024 includes any amount that we would potentially have, you know, decided not to do in 2023 and to do in 2024. So there's nothing that we have to worry about, you know, revising 2024 for. And to Chris' point, I think overall the coming in lower than budget for maintenance CapEx for 2023 really just reflects our results for 2023. Great, thank you.

So it might be more active in 24, how would you sort of frame the environment right now it seemed like it was a bit of a buyers market last year anecdotally. We're hearing it from some other peers that things are starting to pick up in terms of activity levels.

More competition, how would you frame right now Chris I.

I think from our view 2023 I think.

Because that volatility I mean, we're well aware of kind of where treasuries moved into also our stock in the fourth quarter is just very difficult for us to feel good about underwriting during that year, given that volatility on knowing we'd get accretion and being disciplined so for us and also I think a lot of the sellers were kind of waiting to see where those markets calmed down to be able to move forward with sales.

Christopher S. Sotos: And then secondly, for me, you reiterated that you still don't need external capital through 2026. You've been talking about how you're targeting, you know, four to four and a half times corporate debt to corporate EBITDA. Just wondering, you know, once you deploy all the thermal proceeds, presumably you'll organically de-lever the balance sheet a little bit. Just wondering if you could say where you expect to be within that leverage range now, and if you're at the low end, would you consider deploying excess capital to target the midpoint? Sure. I think there are a couple of questions in there, so hopefully I'll unpack it.

I think while obviously kind of the past.

Call. It month, we've probably had 40 ish basis points of 10 year Treasury volatility. That's obviously much less than we're all experiencing in the fourth quarter of last year. So from my perspective, I think the overall target for M&A is hopefully more robust in 'twenty four than it was in 'twenty three and importantly, our ability to execute I just think we had very.

Volatile markets, which made kind of execution and underwriting very difficult.

And then how would you think about funding any M&A on top of the already existing commitments.

Christopher S. Sotos: The first point is, it's not as though we're actually going to rest on our laurels for 2015 by 2026. That's just where the number falls out, given the external, given the capital from thermal. So, we actually hope to do better, but right now, that's what we can show a line of sight on, just for a point of clarification. I think as we think about the overall debt, you know, there's about $2.125 billion in bonds. And once we deploy all the thermal proceeds on a run rate basis, that's about $435 million of CAFDI. You add that corporate interest of about $90 to $95 billion. You get about four times, call it corporate debt to corporate EBITDA. So, I think the answer to your question is, you know, there should be excess leverage capacity. To be fair, I don't want to pin everything on one credit stat, but that's the easiest one we use to translate.

Yes, depending on what size of it is.

You, obviously have an unfunded revolver, which would kind of use the warehouse first and I think the previous question, we always kind of used excess cash yes.

We borrow.

Look at our excess cash to basically pay back first then any eggs excess debt capacity, which was the previous question and then equity last so for us depending on where capital markets are at the time of the acquisition. We obviously have significant revolver capacity. So we're not forced to go to the markets at a certain size.

Understood and then as you.

Look to the next three years to five years and at some point you guys will give us some more clarity on where you think the organic growth or the dropdown growth will come from.

Besides is there anything else on the Caf II profile related to tax equity partnerships are there any like normal flips coming up potential buyers anything that sort of changes the cost profile of the existing assets in the next three to five years.

As those come up fairly regularly but.

I wouldn't say are material drivers of a paradigm changing number like in our disclosure, you'll see us kind of do one of those a year and generally they tend to be pretty small so to your question. Those flips do come up but they tend to not be material drivers of casting in the long term.

Christopher S. Sotos: We're in an 8% interest rate environment. Obviously, other things move around. So, I think to your question, we do think we'd be, once all the thermal capital is deployed, on the low end of our target $4 to $4.5, but that would also be a little bit fair to your question. There are, yeah, rating fees use a number of other metrics, but just the simplest one to kind of walk.

Okay and last question from me.

Obviously, you saw PPA prices rise or last couple of years return objectives moved higher including oncology targets.

Assuming that rates plateau or go lower here.

Just just updated view in terms of where you think returns are going to trend over the next 12 months here. How are you seeing that maybe there is made at the <unk> level in terms of where youre seeing PPA prices clear and most recently in terms of return potential.

Christopher S. Sotos: So hopefully, that answers your question. Yes, thank you. Thank you. Our next question comes from the line of Mark Jarvie with CIBC. Your line is now open. Yeah, good morning, everyone.

Got it Craig if you don't mind. Please proceed.

Sure.

I think as the weighted average cost of capital for sponsors and.

And project owners across the industry.

Mark Jarvie: Maybe just coming back to the comments around M&A, third-party M&A, and transacts in 2023, which might be more active in 2024. How would you sort of frame the environment right now? It seemed like it was a bit of a buyer's market last year. Anecdotally, we're hearing from some other peers that, you know, things are starting to pick up in terms of activity levels and a bit more competition. How would you frame it right now, Chris?

Rose over fiscal year 2023.

Broad environment of industry participants factor in that.

<unk> increased weighted average cost of capital and to the prices they offered customers on new contracts.

Those prices also took into account.

The equipment pricing environment that after the pandemic and other changes in trade policy became more elevated and in today's market, we see PPA prices remaining above where they were for comparable resources.

Christopher S. Sotos: Oh, sure. I think from our view, you know, 2023. I think, you know, because of that volatility. I mean, we're well aware of where Treasury's moved in our stock in the fourth quarter, which is very difficult for us to feel good about underwriting during that year, given that volatility and knowing we get accretion and are disciplined. So for us, and also I think a lot of sellers, we're kind of waiting to see where those markets calm down to be able to move forward with sales. And I think while obviously, kind of the past, you know, call it a month, we've probably had 40-ish basis points of 10-year Treasury volatility. That's obviously much less than we were all experiencing in the fourth quarter of last year.

Before the start of 2023.

We.

We and other <unk>.

Competitors I think are finding that customers still see value in those elevated PPA prices.

In particular for customers, who either as load serving entities or as end use customers.

See growing load and value the low emissions profile of the products that we're selling so.

We don't foresee meaningful declines in PPA prices from where they are today.

And equally because it's a competitive environment, we don't see.

And expectation for dramatic increases in returns that are produced for projects.

Christopher S. Sotos: So from my perspective, I think the overall target for M&A is hopefully more robust in 24 than it was in 23. And importantly, our ability to execute. I just think we had very volatile markets, which made any kind of execution and underwriting very difficult in 23. And then how would you think about, you know, funding any M&A on top of the REA's existing commitment? Yeah, depending on what size it is, we obviously have an unfunded revolver that we'd kind of use the warehouse first.

But we are now able to support higher.

Internal rates of return and higher cash yields on the new projects that we're creating which take into account the elevated cost of capital for the industry generally.

Got it so any decline in PPA prices would really be more effective of capex trends.

And I guess.

Cost of financing financing cost and not so much or sacrificing IRR objectives. No I don't think so I mean, I think what I think we've got to be disciplined we need to.

To deliver accretive growth.

For Clearway Energy, Inc.

Christopher S. Sotos: And I think the previous question, you know, we always kind of use excess cash, you know, whatever we borrow, if you look at our excess cash to basically pay back first, then any excess debt capacity, which was the previous question, and then equity last. So for us, you know, depending on where capital markets are at the time and size of the acquisition, we obviously have significant revolver capacity. So we're not forced to go to the markets at a certain time.

And I think in general the industry's largest project sponsors.

Have entered an era, where we're all being cautious in the way projects are configured and created.

And I think the largest customers.

Having gone through all the disruption of the last three or four years increasingly value.

Engaging with project sponsors who can deliver projects with certainty.

Got it thanks, Greg Thanks, Chris.

Thank you.

Our next question comes from the line of Justin Clare with Roth.

Your line is now open.

Yes.

Christopher S. Sotos: And then, as you look through the next three to five years, I know at some point, you guys will give us some more clarity on where you think the organic growth or the drop-down growth will come from. Besides, is there anything else on the CAFTI profile related to tax equity partnerships? Are there any notable flips coming up, potential buyouts, anything that sort of changes the CAFTI profile, the existing assets over the next three to five years? Those come up fairly regularly, but those I wouldn't say are material drivers of a paradigm changing number. Like in our disclosures, you see we kind of do one of those a year. In general, they tend to be pretty small.

Thanks for taking our questions here. So I was wondering if you could maybe just update us on the progress youre, making on contracting the opening.

<unk> capacity in 2027.

Is it could we see in the near term here some smaller amounts of that capacity contracted.

Is it more likely that.

Something happened in the summer.

Of this year and then beyond that I was wondering if you could maybe just talk about the other levers that you are focused on four extending dps growth into 2027, I know acquisitions. This is a part of it but anything else meaningful that we should be considering.

Christopher S. Sotos: So to your question, those flips do come up, but they tend not to be material drivers of CAFD in the long term. Okay, last question for me is just, obviously, we saw PPA prices rise over the last couple of years, return objectives moved higher, including your own cap D target, you know, assuming that rates plateau or go lower here. Just just updated you in terms of where you think returns are going to trend over the next 12 months here. How are you seeing that maybe there's no difference at the CG level in terms of where you're seeing PPA prices clear, and most recently, in terms of return potential. Greg, if you don't mind, I'll speak for CDG. Sure. I think as the weighted average cost of capital for sponsors and project owners across the industry rose over fiscal year 2023, the broad environment of industry participants factored that increased weighted average cost of capital into the prices they offered customers on new contracts. Those prices also took into account The Equipment Pricing Environment that became more elevated after the pandemic and other changes in trade policy became more elevated.

Sure. So for the first part of your question I don't get me wrong with a major procurement initiative is kind of your bid as part of the RFP processes on the utilities on the grid and the like really in the kind of I'll call. It late first quarter early second quarter and you find out about those awards call. It third quarter when they are binding late third.

Quarter, maybe early fourth so I think to your point in terms of a real paradigm change in terms of very mobile.

As far as significant capacity, that's when you'd see it that being said we're constantly in communications with a variety of counterparties on the smaller side to try to move those numbers up at prices that we think are good as well so.

Your question, if you were to say, Hey, Chris where we'd see a multiple 100 megawatt move that's probably a much more as part of that large procurement process that thing started could you see smaller moves in the interim.

And then your second question about extending the other source of growth through 'twenty seven not to minimize it really as those resources are a is the big part of it given pricing that we're seeing we hope it holds.

The question I, just answered we will look to see what happens in the RFP processes kind of the spring and summer.

M&A is obviously critical as well as the Repowering and further dropdowns with the 2026 and 2007.

And once again, we hope to provide more color on those we progressed through the year and we feel better about what capital those projects are going to take so on and so forth its still little bit early now to do that.

Got it okay I appreciate it.

And then I did want to ask you about the nonrecourse debt principal amortization schedule it looks like the amount in 2024.

As expected.

Moved up significantly $1 $7 billion I think last quarter, the expectation is $432 million.

Just maybe walk us through the change there.

Help us understand that.

Sure Let me give a scheduled for example.

The projects under construction you've got it.

Sorry, if I can just answer yes. So we have several projects that we think that we acquired I think you can see.

Christopher S. Sotos: So we don't foresee meaningful declines in PPA prices from where they are today. And equally, because it's a competitive environment, we don't see an expectation for dramatic increases in returns that are produced for projects. But we are now able to support higher internal rates of return and higher cap yields on the new projects that we're creating, which take into account the elevated cost of capital. So any decline in TPA prices would really be more reflective of CapEx trends and, I guess, financing costs and not so much a sacrifice in IRR objectives. No, I don't think so.

Victory path and Erica is the biggest piece of it the 757 and then also the royalty class B. Those two amounts are for projects under construction and so once the construction is complete that will get replaced by <unk>.

Tax equity cash equity.

A more permanent financing so those maturities will go away as a result of other proceeds from other financing arrangements.

Got it okay.

The amortization on the existing project debt is about the same as it has before thats really just as the two projects move from construction to permanent financing.

Christopher S. Sotos: I mean, I think we've got to be disciplined; we need to deliver creative growth for clearway energy. And, you know, I think, in general, the industry's largest project sponsors have entered an era where we are all being cautious in the way projects are configured and created. And I think, you know, the largest customers, having gone through all the disruption of the last three or four years, increasingly value engaging with project sponsors who can deliver projects with certain, Thanks, Greg. Thanks, Chris.

That's right Okay I appreciate it thank you.

Thank you.

Our next question comes from the line of Noah Kaye with Oppenheimer <unk> Company. Your line is now open.

Okay.

Noah Kaye with Oppenheimer.

Okay, great, yes, it cut out for a second but I just wanted to chosen called on.

For taking the questions folks.

I think it goes a little bit to one of the earlier questions, but too soon to talk about cap to yield expectations for some of these 2026 2027 potential projects any way to dimension that and in particular I know one of your peers has talked about kind of the return expectations for Repower.

Christopher S. Sotos: Our next question comes from the line of Justin Clare with Ross MKM. Your line is now open. Yeah, thanks for taking our questions here. So I was wondering if you could maybe just update us on the progress you're making on contracting the open conventional capacity in 2027. Is it, you know, could we see in the near term some smaller amounts of that capacity contracted or, or is it more likely that, you know, something happens in the summer of this year, and then beyond that, I was wondering if you could maybe just talk about the other levers that you're focused on for I know acquisitions are a part of it, but anything else meaningful that we should be considering? Sure.

So not sure if you can parse that out for us a bit.

Yes.

Be simple to your question no. We think it's too early I think once again. The question is will it be eight probably not but I think if you look at where cap deals that moved I think also.

You've noticed that hopefully our sponsors have been supportive of moving cap deals higher from where we first thought they would be given the move in treasuries that happened. So if you look I think it was probably our August 2022, we basically indicated cap deals on some of these drops would be about eight and a half and then we kind of move them up in I believe it was the fourth quarter of 'twenty two.

Up further in 'twenty three.

Yes, there is a ceiling on that visibility.

So they can move them to infinity.

For us not to minimize your question. It really is seeing where the capital markets out that time, and where do we feel comfortable underwriting.

Christopher S. Sotos: So, for the first part of your question, like, don't get me wrong, the major procurement initiative, it's kind of, you know, you bid as part of the RFP processes on the utilities and the grid and the like, really in, kind of, call it late first quarter, early second quarter, and you find out about those awards, call it third quarter when they're binding, late third quarter, maybe early fourth. So, I think your point, in terms of a real paradigm change, in terms of much more significant capacity, that's when you'd see it. That being said, we're constantly in communication with a variety of counterparties on the smaller side to try to move those numbers up at prices that we think are good as well. So, to your question, if you were to say, hey, Chris, when we would see a multiple hundred megawatt move, that's probably much more as part of that large procurement process. That being said, could you see smaller moves in the interim?

So it is too early to tell and I think the projects are a little bit too early stage currently to for everybody to feel good about the capital required and also what that cost of capital might be.

Yes.

It's good to see that just from a.

Sponsor development standpoint.

The quantity of projects for.

For $24 25 looks fairly consistent quarter to quarter I did noticed what appears to be some shift of target Cod's 'twenty six 'twenty seven.

Anything we can understand a read into that.

Speak to IRI clarifications or.

Kind of more persistent in their connection bottlenecks or anything like that and maybe a quick question.

Yes, Craig if you don't mind.

Yes.

Yes perceptive question.

Yes.

What that shift over 26% to 27 reflects principally is.

Christopher S. Sotos: Yes. And then your second question about extending the other source of growth to 27, not to minimize it, but it really is those three sources. You know, RA is a big part of it, given the pricing that we're seeing. We hope it holds. And like the question I just answered, we'll look to see what happens in the RFP processes kind of this spring and summer. You know, M&A is obviously critical, as well as the repowerings and further drop-downs with the 2026 and 2027 CODs. And once again, we hope to provide more color on those as we progress through the year and we feel better about what capital those projects are going to take, so on and so forth. But it's a little bit early now to do that.

Plan for certain projects to be able to make use of <unk>.

Domestic content solutions.

And conservatism in the way that we're planning those projects schedules based on.

When and how.

The guidance Thats required for being able to finance those solutions would materialize.

But also just forecasting of.

Project.

Schedules in a way that we anticipate would be durable and also enabling of capitalization of the project by <unk> under foreseeable financial market conditions. So.

Right now with respect to interconnection we feel.

Pretty solid about the family of projects that we are advancing that underpin the core of that 2026 2027 volume four.

See when growth enablement.

Christopher S. Sotos: Got it. Okay, I appreciate it. And then I did want to ask about the non-recourse debt principle amortization schedule. It looks like the amount in 2024 that is expected to be moved up significantly, $1.7 billion. I think last quarter the expectation was $432 million. So, could you just maybe walk us through the change there and help us understand that? Let me get the schedule for a second. We had several projects that we acquired. I think you can see why.

We have.

Sure.

In excess of 15, Gigawatts worth of late stage interconnection queue positions.

Many gigawatts worth of high voltage equipment that we've <unk>.

Secured to be able to support the growth there.

In the mid decade, so I think we're not in a position where we're particularly concerned about some of the grid bottlenecks that are broadly impacted the industry to be able to support growth goals for <unk> and instead right now as we're prosecuting projects for that mid decade are just focused on how does that projects up to maximize value.

Christopher S. Sotos: Victory Path and Erica are the biggest pieces of it, the 757, and then also the Rosie Class C. Those two amounts are for projects under construction, and so once the construction is complete, that will get replaced by, you know, tax equity, cash equity, you know, more permanent financing. So those maturities, you know, will go away as a result of other proceeds from other financing arrangements. The amortization on the existing project debt is about the same as it was before; that's really just as the two projects move from construction debt to permanent. That's right.

You.

To construct a portfolio that will be diversified and beneficial.

For <unk> and just that project up for construction and funding schedules that.

Provide us with useful flexibility for how and when the projects would be funded by <unk>.

Very helpful. Craig May I, just ask a quick follow up.

I wanted to note D C as well as anybody in the world.

I just wanted to clarify whether or not you.

The development entity is still kind of waiting on finalization of domestic content guidance.

To make some of those.

Christopher S. Sotos: Okay, I appreciate it. Thank you. Thank you. Our next question comes from the line of Noah Kaye with Oppenheimer & Company. Your line is now open.

And.

If so when youre thinking the guidance may actually be published.

I mean, I think that we have.

It's a balancing act.

Noah Duke Kaye: Okay, great. Yeah, they cut out for a second, but I just wanted to make sure I was being called on. Thank you for taking the questions, folks. You know, I think it goes a little bit to one of the earlier questions, but too soon to talk about, you know, cap-to-yield expectations for, you know, some of these 2026, 2027 potential projects. Any way to dimension that?

As I think you are alluding to there are projects that we.

We have planned for.

Say 2026, vintage, where we would ideally like to enable the use of additional domestic content solutions.

That we think would be responsive to U S policy goals.

Value enhancing but there are certain timetables that support customer needs that eventually just have to be fulfilled so.

Christopher S. Sotos: And in particular, I know, you know, one of your peers has talked about kind of the return expectations for repower. So, you know, not sure if you can parse that out for us. Yeah, to be simple, no, we think it's too early. I think once again, you know, if your question is, you know, will it be eight? Probably not.

What we do is we advise.

The staff of the various agencies on the implications of.

The amount of time it takes to issue guidance for project timetables that arent universally flexible in the industry.

And think it's understood by a lot of the folks who have to work through the policy process on domestic guidance that.

Christopher S. Sotos: But I think, you know, if you look at where cap deals have moved, I think also, you've noticed that, hopefully, you know, our sponsors have been supportive of moving cap deals higher from where we first thought they would be, given the move in Treasuries that happened. So if you look, I think it was probably August of 2022; we basically indicated that cap deals on some of these drops would be about eight and a half. And then we kind of moved them up, I believe it was the fourth quarter of 22, moved them up further in 23.

We're moving through time windows, where it would be beneficial.

For that clarification of domestic content guidance to be issued in the course of the next.

Two months, if we want to be able to catch the 2026 vintage for a substantial fraction of the industry activity.

But for what we currently have planned for 2026, we have locked in supply chain solutions.

That will allow those projects to be completed in that timetable.

And are no longer relying on the issuance of that guidance to be able to do so.

Christopher S. Sotos: So yeah, there's a ceiling on that, you know; it's possible they can move them to infinity. So I think for us not to minimize your question, it really is seeing where the capital markets are at that time and where we feel comfortable underwriting. So it is too early to tell.

Very helpful. Thank you.

Thank you and I'm currently showing no further questions at this time I would like to hand, the call back over to Chris Sotos for closing remarks.

Thank you once again I think 2023 was a difficult year from a resource perspective, but we hope to kind of bring things back on track in 'twenty, four and see a lot of progress over the course of the year that we hope to be able to illustrate to you in terms of driving <unk> forward on a future basis beyond 26. So I appreciate those patients during 'twenty three and moving onto 24. Thank you everyone.

Christopher S. Sotos: And I think the projects are a little bit too early stage currently for everybody to feel good about the capital required and also what that cost of capital might be. It's good to see that, you know, just from a sponsor development standpoint, the quantity of projects for 24 and 25 looks fairly consistent quarter to quarter. However, I did notice what appears to be some shift of target CODs of 26 into 27. Anything we can understand or read into that, does it speak to IRA clarifications or, you know, more persistent in their connection bottlenecks, anything like that? It may be a great question. Yeah, Greg, if you don't mind. Yeah. Yeah, a perceptive question, Noah.

This concludes today's conference call. Thank you for your participation you may now disconnect.

Okay.

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Christopher S. Sotos: Yeah. What that shift over 26 to 27 reflects principally is a plan for certain projects to be able to make use of domestic content solutions and conservatism in the way that we're planning those project schedules based on when and how the guidance that's required for being able to finance those solutions would materialize. But also just forecasting project schedules in a way that we anticipate would be durable and also enabling capitalization of the project by CWIN under foreseeable financial conditions. So right now, with respect to interconnection, we feel pretty solid about the family of projects that we are advancing that underpin the core of that 2026-2027 volume for CWIN growth enablement. You know, we have in excess of 15 gigawatts worth of late stage interconnection positions and many gigawatts worth of high voltage equipment that we've secured to be able to support the growth there in the mid-decade.

Okay.

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Christopher S. Sotos: So I think we're not in a position where we're particularly concerned about some of the grid bottlenecks that have broadly impacted the industry to be able to support growth goals for CWIN. And instead, right now, as we're prosecuting projects for that mid-decade, we're just focused on how to set projects up to maximize value to construct a portfolio that will be diversified and beneficial for CWIN and to set projects up for construction and funding schedules that provide us with useful flexibility for how and when the projects would be very helpful. Craig, may I just ask a quick follow-up question from someone who knows DC as well as anybody in the world? I just want to clarify whether or not you, the development entity, are still kind of waiting on the finalization of domestic content guidance to make some of those, you know, FIDs and, If so, when you think the guidance may actually be public. Um, you know, I mean, I think that we have a balancing act.

Christopher S. Sotos: And I think it's understood by a lot of the folks who have to work through the policy process on domestic guidance that we're moving through time windows where it would be beneficial for that clarification of domestic content guidance to be issued in the course of time. You know, two months if we want to be able to catch the 2026 vintage for a substantial fraction of the industry activity. But for what we currently have planned for 2026, we have locked in supply chain solutions that will allow those projects to be completed in that timetable, and we are no longer relying on the issuance of that guidance. Yeah, it was very helpful.

Operator: Thank you. Thank you, and I'm currently showing no further questions at this time. I'd like to hand the call back.

Christopher S. Sotos: Thank you. Once again, I think 2023 was a difficult year from a resource perspective, but we hope to kind of bring things back on track in 24 and see a lot of progress over the course of the year that we hope to be able to illustrate to you in terms of driving CAFD forward on a future basis beyond 26. So, I appreciate everyone's patience during 23 and moving on to 24. Thank you, everyone.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect. Thank you for watching. See you next time.

Operator: Conclusion, ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? www. NRGYield.com ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Welcome to the Clearway Energy, Inc. 4th quarter 2023 earnings call. At this time, all participants are in a listen-only mode.

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Okay.

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Operator: 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 1-1 on your telephone. You will then hear an automated message advising your hand... 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. Please go ahead. Good morning.

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Christopher S. Sotos: Let me first thank you for taking the time to join Clearway Energy Inc.'s fourth quarter call. Joining me this morning are Akil Marsh, Director of Investor Relations, Sarah Rubenstein, CFO, and Craig Cernunniotis, 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 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 refer to both GAAP and non-GAAP financial measures.

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Christopher S. Sotos: 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 4. Despite a difficult year from a renewable resource perspective, C1's 2023 CAFD came within its revised guidance range of $330 to $360 million at $342 million, with a fourth quarter CAFD of $53 million. Commercial operations were also achieved on DAGA 2 and Texas Solar NOVA 1 in the fourth quarter, which will help drive revenue in 2024 and beyond. CWIN also committed to approximately $215 million of new corporate capital deployments in 2023 and an average five-year annual cap yield of approximately 10% while further diversifying CWIN's fleet. Looking ahead to 2024, we are announcing a dividend increase of 1.7% for the quarter, bringing 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.

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Christopher S. Sotos: Clearway is also reaffirming its cap-to-guidance of $395 million for 2024, with cap-to-results in line with expectations today, clearly continuing to execute at long-term growth targets of $2.15 per share, and is reaffirming its 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.

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Christopher S. Sotos: So we will continue to execute toward its 2026 $2.15 CAFDI per share target during 24, while also focusing on providing further growth visibility beyond this CAFDI goal in the years to come. Please turn to page 5. Page 5 offers a summary of Clearway's over $215 million committed group investments announced in 2023, some of which are already operational with respect to Texas Solar No.

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Christopher S. Sotos: 1, with the remainder to come online during 2024. These investments are expected to generate five-year annual average capital 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 will continue to clearly execute on the $2.15 CAFD per share goal when these proceeds are fully developed. Please turn, please.

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Good day, and thank you for standby.

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 this session you will need to press star one one of your telephone.

Christopher S. Sotos: Slide 6 demonstrates our path to $215 per share, with the remaining approximately $200 million of excess thermal proceeds to be deployed at an approximate 10% 5-year annual average capped yield. These remaining assets should hit their commercial operation dates during 2025. As we move from finishing the 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.

<unk> automated message revising your hand is raised to withdraw your question. Please press star one 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.

$3 million with the fourth quarter Kathy of $53 million.

Christopher S. Sotos: 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 by offtaker 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.

<unk> operations will also achieved in <unk> in Texas. So we're in over one in the fourth quarter, which will help drive Kathy in 2024 and beyond.

So and also committed to approximately $250 million, a new corporate capital deployments in 2023, an average five your annual cap the yield of approximately 10% while further diversifying sequence fleet.

Looking to 2024, we are announcing a dividend increase of 1.7 per cent for the quarter spring or quarterly dividend 2.4033 per share 416132 on an annualized basis. The target group growth of 7% for the full year of 2024. Clearly is also re affirming it's Katherine guidance of 395.

$5 million for 2024 with <unk> results in line with expectations today.

Clearly continues to execute us longterm growth targets of $2.15 of Kathy 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.

Christopher S. Sotos: 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 a great. I'll turn it over to Sarah. Thanks, Chris.

As we transition to focus on growth beyond 2026, we continue to manage our already contracting positions and to 2026 to 23 timeframe pursuing both value uncertainty to drive value for shareholders.

In addition, our sponsors 29 gigawatt renewable pipeline continues to develop with approximately seven gigawatts of late stage projects targeting cod's over the next four years.

So we will continue to execute towards 2026, $2.15 Kathy pressure target during 24.

Sarah Rubenstein: On slide 9, we provide an overview of our financial results, which includes full-year adjusted EBITDA of $1.058 billion and CAFD 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 CAFG was $53 million. Those 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 resources, which was a trend observed throughout the industry in the fourth quarter. Despite the challenges impacting 2023 full-year CAFD, 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.

Also focusing on providing further group visibility beyond this Cathy go in the years to come.

Please turn to page five.

Five by somebody who clearly has over $215 million, a <unk> investments announcements 2023.

Some of which are already operational with respect to Texas stolen over one with the remainder to come online around 2024.

These investments are expected to generate five year annual average Kathy yields of approximately 10 per cent underpinned by longterm contracts of 15 years and over.

The assets comprised a first generation with approximately 620 megawatts of women's solar generation added and approximately 150 megawatts of storage.

These athletes are funded with the excess thermal proceeds and continued clearly execution, where the $2.15. Kathy Fershur goal. When these proceeds are fully developed.

Please turn to page six.

Five six demonstrates our path to 15 per share with the remaining approximately $200 million of excess thermal proceeds to be deployed in approximately 10 per cent five your annual edge average calfed yield these remaining assets should hits a commercial operation dates during 2025.

As removed from finishing deployment of our excess thermal proceeds into growth investments, we look for additional sources of growth beyond 2026.

Sarah Rubenstein: 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 dividends 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 the line-of-sight CAFD per share of $2.15. We are reiterating our 2024 CAFD guidance at $395 million.

Our first avenue of growth additional drops from our sponsor will provide additional color on potential drops on the next slide and later this year would anticipate providing estimates on capital deployment and kept yields for new projects beyond those identify here for use of the thermal proceeds.

Additionally Avenue of growth is resource adequacy awards and pricing in 2027 and beyond is highlighted last call. We continue to add links to our our capacity contracts are strong pricing to drive value.

Lastly.

Pretty M&A is always a focus and I'll I'll do the capital market volatility in 2023, we didn't execute on a third party M&A Cleary remains focused on this market in 2024.

Sarah Rubenstein: Among other factors, our 2024 CAFD guidance continues to factor in current P50 median production estimates and previously disclosed expectations for maintenance capital expenditures in 2024 and timing of committed gross investments based on estimated project CODs, but excludes CAPD from committed growth investments beyond 2024. Our pro forma CAFD outlook remains at $415 million, which along with anticipated growth investments using the remaining thermal sale proceeds, supports our potential line-of-sight CAFD and dividend per share growth targets. Now I will turn it back to Chris for closing remarks. Thank you, Sarah.

Trying to page seven.

In order to provide additional color around the opportunities from our sponsors late stage pipeline for the 2026 to 2000 2007 timeframe. We thought it was appropriate to provide a high level summary of further potential dropdown activity for these years.

Our sponsors working on over four Gigawatts of fleet optimization and expansion opportunities with C. O D. As in 2026, and 2027, which are well diversified between when Repowerings additional new wind assets solar storage hybrid assets and Standalone storage projects.

Vestments are highly diversified also buy offtaker and market and will benefit from the ability to deploy domestic content and invest in energy communities under the I R. A.

Christopher S. Sotos: Turning to slide 11, our goals for 2024 are simple. First, to focus on delivery of our 2024 CAFD guidance while achieving our 7% DPS growth in 2024. In order to do this, we'll target to improve availability from the CAPEX investment we are making at several of our sites. Second, we will continue to execute toward our $2.15 cap-to-per-share target once all the excess thermal proceeds are deployed and fully operational, while adhering to our underwriting standards. Third, we want to begin the growth conversation around growth beyond 2026 for a combination of additional RA contracting, providing visibility on further drop downs in the 2026-2027 period as we progress through 2024, additional improvements in the existing fleet through repowerings and the like, and finally an eye to continuing to pursue M&A at our disciplined capital targets. Operator, please open the line for questions. Thank you. As a reminder, to ask a question, please press star 11 on your touch-tone telephone and wait for your name to be announced.

Thereby delivering competitively priced energy to customers or meeting return requirements and reducing risks particular ways overall fleet.

In summary, while it's too early to provide details in terms of potential capital deployment return levels investors can be assured there is a strong pipeline of grossetto sponsor I should add significant assets to clear away energy <unk> portfolio to the middle of the decade as always we will raise capital prudently with a focus on efficient execution to optimize accretion.

I'll turn it over to Sarah.

Thanks.

Five nine we provide an overview of our financial results.

Includes fully ear adjusted EBITDA at 1.5, alien and Cassie at $342 million, which both within the previously provided revised guidance range at $330 million to $360 million for.

Quarter, adjusted EBITDA, whites, 201 million and caffeine $53 million.

Consistent with revived internal expectations updated in August of 2023 to reflect renewable resource impact.

Our fourth quarter results are affected strong conventional availability.

A new set of timing of maintenance capital expenditures and other items.

That in part by lower wind resource, which by the trend et cetera.

Industry in the fourth quarter.

Basic challenges and acting 2023, four year Kathy the company remains well positioned for growth with a strong balance sheet file format credit metrics in line with target ratings at 99%.

Operator: To withdraw your question, please press star 118. Please stand by while we compile the Q&A. Our first question comes from the line of Michael Lonegan with Evercore ISI. Your line is now, Yeah, hi.

Consolidated longterm guy with a text interest costs.

<unk> accompanies earliest corporate that maturity has 2028 and there continues to be no external capital needs to find the line of sight Kriss K R dividend per share credit at Jackass 220, 20th.

Michael Lapides: Thank you for taking my question. Um, so you highlighted the shift in the timing of maintenance cat bags, it looks like, and utilities. We're probably not going to get into a lot of detail, just as a lot of those numbers are immaterial to overall guidance, and I'll turn over to Sarah in terms of any further clarification. But for us, obviously, you know, 2023 was a disappointing year for generation overall, so maintenance capex was not needed as much due to lower generation. So I think from our perspective, while we kind of gave guidance for 2024 maintenance capex, to your point, we really looked comprehensively at what happened in 23, some of the availability shortfalls we suffered, and where we could kind of spend those dollars to improve availability in 24 to move on. So I think those are really kind of a lot of the points around maintenance capex. It's not a question of what we thought it was, you know, unfortunately, due to the generation kind of being lower than we had targeted. Maintenance capex is also thereby lower, and really kind of putting those two together. But Sarah, any other details?

The remaining thermal sale proceeds are available to fans committed 2023 investment and offered projects that are expected to facilitate achievement.

Kathy per share at $2.15.

We are reiterating our 2024 Cassie guidance at 395 million.

Among other factors are 2024, Kathy guidance continues to factor in current P. 50 median production estimate.

Previously disclosed expectations for maintenance capital expenditures in 2024, and timing is committed growth investments based on estimated project C O D.

X. Please kathy from committed growth investments beyond 2024.

Are pro forma Kathy outlet remains at 415 million, which along with anticipated growth investment using the remaining thermal sale proceeds.

Points are potential line of sight, Kathy any dividend per share growth target.

Now I will turn it back to Chris for closing remarks.

Christopher S. Sotos: No, I think you've covered it. Maybe just to highlight the 395 of CAFD that we're guiding to in 2024 includes any amount that we would potentially have, you know, decided not to do in 2023 and to do in 2024. So there's nothing that we have to worry about, you know, revising 2024 for. And to Chris's point, I think overall the coming in lower than budget for the maintenance cap for 2023 really just reflects our results for 2023. Great, thank you.

Thank you Sir.

Turning to slide 11, our goals for 2024 simple.

First to focus on delivery of 2024, Kathy guidance, all choosing our seven per cent Dps growth in 2024 and in order to do this you will target to improve availability from cabinet Capex investment, we are making a several of our sites.

We continue to execute toward our $2.15 of Kathy Fisher target, but all the excess thermal procedure deployed and fully operational while adhering to our underwriting standards.

You Wanna begin to move the conversation around growth to beyond twenties, 26 to a combination of additional or a contract and <unk>.

Providing this ability on further dropdowns in 2026 2027 period as we progress through 2024.

You shall improvements in the existing fleet to <unk>.

And finally in either continuing to pursue M&A at our disciplined capital targets operator, please open to answer questions.

Thank you as a reminder to ask a question. Please press star one one iron touched on telephone and wait for your name to be announced.

Sarah Rubenstein: And then secondly, for me, you reiterated that you still don't need external capital through 2026. You've been talking about how you're targeting, you know, four to four and a half times corporate debt to corporate EBITDA. Just wondering, you know, once you deploy all the thermal proceeds, presumably you'll organically de-lever the balance sheet a little bit. Just wondering if you could say where you expect to be within that leverage range now. And if you're at the low end, would you consider deploying excess capital to target the midpoint, for instance? Sure. I think there are a couple of questions in there, so hopefully I'll unpack it. The first point is, it's not as though we're actually going to rest on our laurels for 2015 by 2026. That's just where the number falls out, given the external, given the capital from thermal.

To withdraw your question. Please press star one one again.

<unk> rock.

Our first question comes from the line of Michael on again was Evercore ISI. Your line is now open.

Yeah, Hi, good morning, Thanks for taking my question.

Highlighted the shifts and the timing of maintenance tech guys looks like.

And any additional maintenance in the third quarter.

From the fourth quarter between the two quarters you came in at 22 million for the year versus guidance for $35 million you reiterated your maintenance Capex forecast for 2024, just wondering if you could share more detail about this.

You're probably not going to get into a lot of detail just as long as those numbers or material. The overall guidance I'll turn it over to Sarah in terms of any further clarity, but for US. Obviously, you know 2023 was a disappointing year from generation overall, so maintenance capex was not needed as much due to lower generation. So I think from our perspective, where we kind of gave.

Christopher S. Sotos: So we actually hope to do better, but right now, that's what we can show a line of sight on, just for a point of clarification. I think as we think about the overall debt, you know, there's about $2.125 billion in bonds. And once we deploy all the thermal proceeds on a run rate basis, that's about $435 million of CAFD. You add that corporate interest of about, call it $90 to $95 billion, and you get about four times, call it corporate debt to corporate EBITDA. So I think in answer to your question, you know, there should be excess leverage capacity, to be fair. I don't want to pin everything on one credit stat. That's the easiest one we use to translate.

Guidance for 2024, a maintenance capex to your point, we really look comprehensively at what happened in 2003 some of the availability shortfalls, we suffered on where we can kind of spend those dollars to improve availability in 24 to move on so I think those are really kind of a lot of the points around maintenance Capex is it's not a question of what we thought it was unfortunately due to the general.

Asian kind of being lower than we are targeted maintenance capex is also thereby lower and really kind of putting those two together, but sarah any other details.

No I think you covered it I mean, maybe just to highlight that.

395.

Casspi that were guiding two in 2024 include.

Any amount that we would potentially have.

Decided not to do in 2023 and to do in 2024. So there's nothing that we have to worry about you know revising 2024, four <unk> point I think overall that.

Christopher S. Sotos: If we're in an 8% interest rate environment, obviously, other things move around. So I think to your question, we do think we'd be, once all the thermal capital is deployed, on the low end of our target four to four and a half, but also be a little bit fair to your question. There are, yeah, rating fees use a number of other metrics, but just the simplest one to kind of walk.

Coming in lower than budget for maintenance Capex for 2023 really just reflects Ah results for 2023.

Great. Thank you and then secondly for me you reiterated that you still don't need external capital through 2026.

Been talking about how you are targeting.

Four to five times corporate debt to corporate EBITDA, just wondering once you deploy all the thermal proceeds presumably you organically delever the balance sheet, a little bit just wondering if you could say where do you expect to be within that leverage range now and if you are at the low end would you consider deploying excess.

Mark Jarvie: Maybe just coming back to the comments around M&A, third-party M&A, how you can transact in 2023, and you might be more active in 2024. How would you sort of frame the environment right now? It seemed like it was a bit of a buyer's market last year. Anecdotally, we're hearing from some other peers that, you know, things are starting to pick up in terms of activity levels and a bit more competition. How would you frame it right now, Chris?

Capital to target the mid point for instance.

Sure.

Questions and there's hopefully I'll I'll unpack. The first point is it's not as though that we're actually going to a restaurant laurels for 215 by 2026, that's just where the number of balls out given the external given the capital from thermal so we actually hope to do better but right now. So we can show <unk> just for a point of clarity.

We think about the overall that the other is about $2.125 billion of bonds and once we deploy over thermal proceeds on a run rate basis, that's about $435 million of Cathy you had that corporate interests of about call at 90 $95 billion, you get about four times call it that corporate debt.

Christopher S. Sotos: Oh, sure. I think from our view, you know, 2023, I think because of that volatility, I mean, we're well aware of where Treasury's moved and also our stock in the fourth quarter, which is very difficult for us to feel good about underwriting during that year, given that volatility and knowing we'd get accretion and being disciplined. So for us, and also I think a lot of sellers, we're kind of waiting to see where those markets calm down to be able to move forward with sales. And I think while obviously, kind of the past, you know, call it a month, we've probably had 40-ish basis points of 10-year Treasury volatility this month, that's obviously much less than we were all experiencing in the fourth quarter of last year.

Corporate EBITDA, so I think to your question.

There should be excess leverage capacity to be fair I don't want to paint everything on one credits that that's the easiest one we used to translate the Osborne at 8% interest rate environment, obviously other things move around so I think to your question. We do think we'd be once all the thermal capitals deployed on the low end of our target four to four and a half but also be a little bit.

For your question, there's yep the agencies use a number of other metrics with just the simplest one that kind of walk through so hopefully I answered your question.

Yes. Thank you.

Appreciate your time.

Thank you.

Our next question comes from the lineup Mark journey with CIBC. Your line is now open.

Yeah. Good morning, when it was coming back to the comments around M&A third party M&A I didn't transaction 2023, but.

It might be more active in 24 hour just sort of friendly environment right now it seemed like it was a bit of a buyer's market last year anecdotally. We're hearing it from some other peers that things are starting to pick up in terms of activity levels.

More competition, how would you afraid right now Chris.

I think from our view 2023 I think.

Because that volatility I mean, you were well aware coward surgeries moved and also our stock in the fourth quarter is just very difficult for us to feel good about underwriting during that year, given that volatility unknowing, we'd get accretion of being disciplined.

For Us and also I think a lot of the sellers were kind of waiting to see where those markets calmed down to be able to move forward with sales and I think while obviously kind of the past.

They'll call. It month, we probably had 40 ish basis points of 10 year Treasury volatility. That's obviously much less than we are all experiencing in the fourth quarter of last year. So from my perspective, I think the overall target for M&A is hopefully more robust and 24, then it wasn't twenty-three and importantly, our ability to execute I just think we had very.

Volatile markets, which made kind of execution in underwriting very difficult.

And then how would you think about finding any M&A on top of the already existing commitments.

Yes, depending what size of it is.

Obviously have an unfunded revolver, which we would kind of use the warehouse first and I think to the previous question, we always kind of use excess cash.

We borrow if you look at our excess cash to basically payback first than any.

Christopher S. Sotos: And then, as you look through the next three to five years, I know at some point, you guys will give us some more clarity on where you think the organic growth or the drop-down growth will come from. Besides, is there anything else on the CAFD profile related to tax equity partnerships? Are there any, like, notable flips coming up, potential buyouts, anything that sort of changes the CAFD profile, the existing assets over the next three to five years? Those come up fairly regularly, but those, I wouldn't say, are material drivers of a paradigm-changing number. Like, in our disclosures, you see we kind of do one of those a year. But, in general, they tend to be pretty small.

<unk> that capacity, which was the previous question and then equity last so for us depending on where capital markets are at the time and size. The acquisition. We obviously is significant revolver capacity. So we're not forced to go to the markets at a certain size.

Understood and then.

As you look to the next three to five years I know at some point you guys will give us some more clarity on where you think the organic growth or should we drop down growth will come from.

Besides is there anything else on that on the cap the profile related to tax equity partnerships. There are there any like normal flip coming up potential buyers anything that sort of changes that cassie profiles existing assets in the next three to five years.

Those come up fairly regularly like but those I wound Sarah material drivers of a paradigm changing number like in our disclosure easiest kind of do.

One of those a year in general they tend to be pretty small so to your question those flips do come up but they tend to not be material drivers of cost you in the long term.

Christopher S. Sotos: So, to your question, those flips do come up, but they tend not to be material drivers of CAFD in the long term. Okay, last question for me is just, obviously, we saw PPA prices rise over the last couple of years, return objectives moved higher, including your own CAPD targets, you know, assuming that rates plateau or go lower here. Just update your view in terms of where you think returns are going to trend over the next 12 months. How are you seeing that? Maybe there's, you know, maybe at the CG level in terms of where your steam PPA price is clear and, most recently, in terms of return potential. Greg, if you don't mind, I'll speak for CBG.

Okay cancel that question for me now.

<unk> saw PBA prices rise or last Coupla years return objectives moved higher including <unk> targets.

Assuming that race plateau or go lower here.

Just just update you in terms of where you think returns are gonna trend over the next 12 months here. How are you seeing that nickname users maybe at the CG level in terms of where your CPA prices clear and most recently in terms of return potential.

Craig if you don't mind the procedure.

Sure.

Christopher S. Sotos: Sure. I think as the weighted average cost of capital for sponsors and project owners across the industry rose over fiscal year 2023, the broad environment of industry participants factored that increased weighted average cost of capital into the prices they offered customers on new contracts. Those prices also took into account the Equipment Pricing Environment that became more elevated after the pandemic and other changes in trade policy became more elevated.

I think as the weighted average cost of capital firm sponsors improv.

Project owners across the industry.

Rose over fiscal year 2023.

Broad environment of industry participants factor that increased weighted average cost of capital into the prices they offered customers on new contracts.

Those prices also took into account.

Equipment pricing environment that after the pandemic and other changes in trade policy became more elevated and in today's market, we see PPA prices remaining above where they were for comparable resources.

Christopher S. Sotos: And in today's market, we see PPA prices remaining above where they were for comparable resources before the start of 2023. And we and other competitors, I think, are finding that customers still see value in those elevated PPA prices, in particular for customers who either are load-serving entities or are end-use customers, see growing load and value the low emissions profile of the products. So we don't foresee meaningful declines in PPA prices from where they are today. And equally, because it's a competitive environment, we don't see an expectation for dramatic increases in returns that are produced for projects. But we are now able to support higher internal rates of return and higher cap yields on the new projects that we're creating, which take into account the elevated cost of capital.

Before the start of 2023.

And.

We and other <unk>.

Competitors I think are finding that customers still see value in those elevated PBA prices.

In particular for customers, who either has load serving entities or his end use customers.

See growing load and value the low emissions profile the products that were selling so.

We don't foresee meaningful declines in P. P a prices from where they are today.

And equally because it's a competitive environment, we don't see.

An expectation for dramatic increases in returns that are produced for projects.

But we are now able to support higher.

Internal rates of return and hire cap deals on the new projects that we're creating which take into account the elevated cost of capital for the industry generally.

Christopher S. Sotos: So any decline in TPA prices would really be more reflective of CapEx trends and, I guess, financing costs and not so much a sacrifice in IRR objectives. No, I don't think so. I mean, I think we need to deliver creative growth for Clearway Energy. And, you know, I think, in general, the industry's largest project sponsors have entered an era where we are all being cautious in the way projects are configured and created. And I think, you know, the largest customers, having gone through all the disruption of the last three or four years, increasingly value engaging with project sponsors who can deliver projects with certain, Thanks, Greg. Thanks, Chris.

So any decline in TB prices would really be more reflective of capex trends in.

And I guess in.

Name Constance financing financing costs and not so much or sacrificing IRR objectives. No I don't think so I mean, I think why I think we've got to be disciplined we need to deliver accretive growth.

Firm Clearway Energy, Inc.

And I think in general the industry's largest project sponsors.

Have entered an era, where we are all being cautious in the way of projects are configured and created.

And I think the largest customers having gone through all the disruption of the last three or four years increasingly value.

Engaging with project sponsors who can deliver projects with certainty.

Thanks. Thanks.

Thanks, Chris.

Thank you.

Justin Clare: Our next question comes from the line of Justin Clare with Ross MKM. Your line is now open. Yeah, thanks for taking our questions here. So I was wondering if you could maybe just update us on the progress you're making on contracting the open conventional capacity in 2027. Is it, you know, could we see in the near term some smaller amounts of that capacity contracted? Or is it more likely that, you know, something happens in the summer of this year, and then beyond that, I was wondering if you could maybe just talk about the other levers that you're focused on for extending DPS growth into 2027. I know acquisitions are part of it, but anything else meaningful that we should be considering?

Next question comes from the line of Justin Claire was rock M. K M. Your line is now open.

Yep.

Thanks for taking our questions here. So was wondering if you could maybe just update us on the progress you're making on contracting be openly conventional capacity. In 2027 is is it could we see in the near term here some smaller amounts of that capacity contracted or or is it more likely.

That.

Something happened in the summer.

This year and then beyond that was wondering if you could maybe just talking about the other levers that you're focused on for extending dps growth into 2027, I know acquisitions is is it part of it but anything else meaningful that we should be considering.

Christopher S. Sotos: Sure. So for the first part of your question, like, don't get me wrong, the major procurement initiative, it's kind of, you know, you bid as part of the RFP processes on the utilities and the grid and the like, really in late first quarter, early second quarter, and you find out about those awards, call it third quarter when they're binding late third quarter, maybe early fourth. So I think your point in terms of a real paradigm change, in terms of very much more significant capacity, that's when you'd see it. That being said, we're constantly in communication with a variety of counterparties on the smaller side to try to move those numbers up at prices that we think are good as well. So to your question, if you were to say, hey, Chris, when we'd see a multiple hundred megawatt move, that's probably much more as part of that large procurement process. That being said, could you see smaller moves in the interim?

So for the first part of your question like don't get me wrong with the major procurement initiative is kind of Yo Yo you bid as part of the RP processes on the utilities on the grid and the like really in kind of a call as late first quarter early second quarter and you find out about those awards call at third quarter when they're binding later.

Or maybe early for us So I think your point in terms of a real paradigm change in terms of very.

Significant capacity, that's when you see it that being said, we're constantly communications with a variety of counterparties on the smaller side to try to move those numbers up at prices that we think are good as well so so.

Your question, if you were say, Hey, Chris where we will see you have multiple 100 megawatt ooh, that's probably much more as part of that large procurement process that being said could you see smaller moves in the interim yes.

Christopher S. Sotos: Yes. And then your second question about extending the other resources that go through 27, not to minimize, it really is those three sources. RA is the big part of it given the pricing that we're seeing. We hope it holds.

And then your second question about extending the other source of growth through 27 not to minimize it really is those resources are a is the big part of it given pricing that were saying we hope it holds and like you have a question I just answered will look to see what happens when the RFP processes kind of those spring and summer.

Christopher S. Sotos: And like the question I just answered, we'll look to see what happens in the RFP processes kind of this spring and summer. You know, M&A is obviously critical as well as the repowerings and further drop-downs with the 2026 and 2027 CODs. And once again, we hope to provide more color on those as we progress through the year and we feel better about what capital those projects are going to take, so on and so forth. But it's a little bit early now to do that.

<unk> is obviously critical as well as the Repowering and further dropdowns with a 2026th 2007 C O D and once again, we hope to provide more color on those we progress through the year and when you feel better about what capital those pilots are gonna take so on and so forth of just a little bit early now to do that.

Got it Okay I appreciate it and then I did want to ask you about the the non recourse that's principal amortization schedule. It looks like the amount of 2024 that.

Justin Clare: Got it. Okay, appreciate it. And then I did want to ask about the non-recourse debt principal amortization schedule. It looks like the amount in 2024 that is expected to be significantly higher, $1.7 billion. I think last quarter the expectation was $432 million.

That is expected.

Moved up significantly $170 billion in the last quarter of the expectation is 432 million.

Just maybe walk us through the change there and [noise].

Christopher S. Sotos: So, could you just maybe walk us through the change there and help us understand that? Let me get the schedule for a second. We had several projects that we acquired, I think you can see.

Help us understand that.

Don't let me get the schedule for example.

The project.

You got it.

I would like to just answer yes, we have several projects that we at Thanksgiving that we acquired I think he can see.

Christopher S. Sotos: Victory Path and Erika is the biggest piece of it; the 757, and then also the Rosie Class B; those two amounts are for projects under construction. And so once the construction is complete, that will get replaced by, you know, tax equity, cash equity, you know, more permanent financing. So those maturities, you know, will go away as a result of other proceeds from other financing arrangements. The amortization on the existing project debt is about the same as it was before; that's really just as the two projects move from construction debt to permanent.

Victory path and Erica is the biggest piece of at the 757 and then also there were the class B.

Those two amounts are for projects under construction and so once the construction is complete that will get replaced.

Tax equity cash equity.

More permanent financing so those maturities will go away as a result of other proceeds from other financing arrangements.

Got it okay. So what do think about the after the amortization of the existing project that is about the same as it had before that's really just as the two projects moved from construction Department fast.

Christopher S. Sotos: That's right. Okay, I appreciate it. Thank you. Thank you. Our next question comes from the line of Noah Kaye with Oppenheimer & Company. Your line is now open.

Yes, that's right. Okay I appreciate it thank you.

Thank you are.

Our next question comes from the lineup no, Okay with Oppenheimer and company and your line is now open.

No okay with appetite.

Noah Duke Kaye: Okay, great. Yeah, they cut out for a second. So I just wanted to make sure I was being called on. Thank you for taking the questions, folks. You know, I think it goes a little bit to one of the earlier questions, but too soon to talk about, you know, cap-to-yield expectations for, you know, some of these 2026, 2027 potential projects. Any way to dimension that?

Okay, great yeah, they're cutting it cut out for a second but I just want to make sure I was in hold on thank you for for taking the questions posed.

I think it goes a little bit to one of the earlier questions, but too soon to talk about caffeine yield expectations for some of these 2026 2000 2007 potential projects any way to dimension that in in particular I know one of your peers has talked about the return expectations for Repower.

Christopher S. Sotos: And in particular, I know, you know, one of your peers has talked about kind of the return expectations for REpower. So, you know, not sure if you can parse that out for us. Yeah, to be simple, no, we think it's too early. I think once again, if your question is, you know, will it be eight? Probably not.

So I'm not sure if you can parse that out for us with it.

Yeah.

<unk>. Your question no. We think it's too early I think once again you are part of your question is what will it be H, probably not but I think if you. If you look at where Castillo and moved I think also.

Christopher S. Sotos: But I think, you know, if you look at where cap deals have moved, I think also, you know, you've noticed that, hopefully, you know, our sponsors have been supportive of moving cap deals higher from where we first thought they would be, given the move in treasuries that happened. So if you look, I think it was probably August of 2022; we basically indicated that cap deals on some of these drops would be about eight and a half. And then we kind of moved them up, I believe it was the fourth quarter of 22, moved them up further in 23.

You've noticed that hopefully our sponsors have been supportive of moving cap deals higher from where we first thought there would be given the move in treasury has that happened. So if you look I think it was probably your August of 2022, we basically indicated cap deals on some of these drops would be about eight and a half and then we kind of move them up in I believe it was the fourth quarter of 2000 to move.

Mm up further in 2003.

Christopher S. Sotos: So yeah, there's a ceiling on that, you know; it's not as though they can move them to infinity. So I think for us, not to minimize your question, it really is seeing where the capital markets are at that time and where we feel comfortable underwriting. So it is too early to tell.

Yeah, there's a ceiling on that if possible they can move them to infinity. So I think for us not to minimize your question. It really is seeing where the capital markets out that time, and where do we feel comfortable underwriting.

So it is too early to tell and I think the projects old at too early stage currently for everybody to feel good about the capital required and also what that cost of capital might be.

Yes.

It's good to see that just from Ah.

Sponsor development standpoint, I mean.

Kind of quantity of projects for.

For 2425 looks fairly consistent quarter to quarter I did notice what appears to be some shift of targets cod's 26th sense of 27.

Christopher S. Sotos: Anything we can understand or read into that? Does it speak to IRA clarifications or, you know, more persistent in their connection bottlenecks, anything like that? It may be a great question.

Anything we can understand to read into that.

Does it speak to I R, a clarification or kind of more persistent.

Your system, there connection model nights or anything like that maybe a quick question.

Yeah go ahead, yes, Craig if you don't mind.

Yeah.

Christopher S. Sotos: Yeah. Yeah. A perceptive question, Noah.

Yeah Preceptor question.

Yeah, we.

Christopher S. Sotos: Yeah, we... What that shift over 26 to 27 reflects principally is a plan for certain projects to be able to make use of domestic content solutions, and conservatism in the way that we're planning those project schedules based on when and how the guidance that's required for being able to finance those solutions would materialize, but also just forecasting of projects. Schedules in a way that we anticipate would be durable and also enable capitalization of the project by CWIN under foreseeable financial conditions. So right now, with respect to interconnection, we feel pretty solid about the family of projects that we are advancing that underpin the core of that 2026-2027 volume for CWIN growth enablement. You know, we have in excess of 15 gigawatts worth of late-stage interconnection queue positions and.

What that shift over 26 to 27 reflects principally is <unk>.

Plan for certain projects to be able to make use of domestic.

Domestic content solutions and.

And conservatism in the way that we're planning those projects schedules based on.

When and how the guidance that's required for being able to finance those solutions would materialize.

But also just forecasting of project.

Schedule is in a way that we anticipate would be durable and also enabling of capitalization of the project by <unk> under foreseeable financial market conditions. So.

Now with respect to interconnection, we feel.

Pretty solid about the family of projects that we are advancing that underpin the core of that 2026, 2000 2007 volume four.

See when growth enablement.

We have.

In excess of 15 Gigawatts worth of late stage in our connection queue positions and <unk>.

Christopher S. Sotos: Many gigawatts worth of high-voltage equipment that we secured to be able to support the growth there in the mid-decade. So I think we're not in a position where we're particularly concerned about some of the grid bottlenecks that have broadly impacted the industry to be able to support growth goals for CWIN. And instead, right now, as we're prosecuting projects for that mid-decade, we're just focused on how to set projects up to maximize value to construct a portfolio that will be diversified and beneficial for CWIN and to set projects up for construction and funding schedules that provide us with useful flexibility for how and when the projects would be. Very helpful, Craig. May I just ask a quick follow-up question from someone who knows D.C. as well as anybody in the world?

Many gigawatts worth of high voltage equipment that we've.

Secured to be able to support the growth there.

In the mid decade, so I think we're not in a position, where we're particularly concerned about some of the grid bottlenecks that are broadly impact the industry to be able to support growth goals for <unk> and instead right. Now is we're prosecuting projects for that mid decade, or just focused on how to set projects up to maximize value.

You.

To construct a portfolio that will be diversified and beneficial.

For <unk> and just have projects up for construction and funding schedules that.

Provide us with useful flexibility for how and when the projects would be funded by Sheila.

Mmm very helpful. Craig May I, just ask a quick follow up.

To someone who knows D C as well as anybody in the world.

Christopher S. Sotos: I just want to clarify whether or not you... You know, the development entity is still kind of waiting on the finalization of domestic content guidance to make some of those, you know, FIDs and so, if so, kind of when you think the guidance may actually be public. Uh, you know, I think that we have a balancing act.

I just wanted to clarify whether or not you.

The the development entity is still kind of waiting on finalization of domestic content guidance.

To make some of those.

If I d's and.

If so when you're thinking the guidance may actually be published.

You know I mean, I think that we.

It's a balancing act as I think you are alluding to there are projects that we.

Christopher S. Sotos: As I think you're alluding to, there are projects that we have planned for the, say, 2026 vintage, where we would ideally like to enable the use of additional domestic content solutions, um that we think would be responsive to U.S. policy goals and value enhancing. But, you know, there are certain timetables that support customer needs that eventually just have to be fulfilled. So, you know, what we do is we advise the staff of the various agencies on the implications of the amount of time it takes to issue guidance for project timetables that aren't universally flexible in the industry. And I think it's understood by a lot of the folks who have to work through the policy process on domestic guidance that we're moving through time windows where it would be beneficial for that clarification of domestic content guidance to be issued in the course of time. You know, two months if we want to be able to catch the 2026 vintage for a substantial fraction of the industry activity. But for what we currently have planned for 2026, we have locked in supply chain solutions, that will allow those projects to be completed in that timetable and are no longer relying on the issuance of that guidance. Yeah.

We have planned for the say 2000, 2006 vintage where we would ideally like to enable the use of additional domestic content solutions.

Mmm.

That we think would be responsive to us policy goals and.

Value enhancing but there are certain timetables that support customer needs that eventually just have to be fulfilled so.

What we do is we advise the.

Staff of the various agencies on the implications of.

The amount of time it takes to issue guidance firm project timetables that are universally flexible in the industry and.

Think it's understood by a lot of the folks who have to work through the policy process on domestic guidance that we're moving through time windows, where it would be beneficial.

For that clarification of domestic I'd content guidance to be issued in the course of the next.

Two months, if we want to be able to cash a 2000 2006 vintage for a substantial fraction of the industry activity.

But for what we currently have plan for 2026, we have locked in supply chain solutions.

That will allow those projects to be completed in that timetable and and are no longer relying on the issuance of that guidance to be able to do so.

Yeah.

Operator: Very helpful. Thank you, and I'm currently showing no further questions at this time. I'd like to hand the call back. Thank you. Once again, I think, you know, 2023 was a difficult year from a resource perspective, but we hope to kind of bring things back on track in 24 and see a lot of progress over the course of the year that we hope to be able to illustrate to you in terms of driving CAFD forward on a future basis beyond 26. So, I appreciate everyone's patience during 23 and moving on to 24. Thank you, everyone. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Very helpful. Thank you.

Thank you and I'm currently showing no further questions at this time I'd like to have a call back over to Chris Celtuce for closing remarks.

Thank you once again I think 2023, it was a difficult to hear from resource perspective, but we hope to kind of bring things back on track and 24 and see a lot of progress over the course of the year that we hope to be able to illustrate to you in terms of driving captive forward on a future basis beyond 26. So I appreciate your patience during twenty-three and moving on to 24. Thank you everyone.

This concludes today's conference call. Thank you for your participation you may now disconnect.

Q4 2023 Clearway Energy Inc Earnings Call

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