Good Day, and Thank you for standing by. Welcome to the Clearway Energy, Inc. F ourth Quarter 2023 Earnings Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one 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. 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 Cornelius, President and CEO of Clearway Energy Group, our sponsor. Craig will be available for the Q&A portion of our presentation. Before we begin, I'd like to quickly note that today's discussion will contain forward-looking statements which are based on the assumptions that we believe to be reasonable as of this date. Actual results may differ materially. Please review the safe harbor in today's presentation as well as the risk factors in our SEC filings. In addition, we refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's presentation. Turning to page four. Despite a difficult year from a renewable resource perspective, CWEN's 2023 CAFD came within its revised guidance range of $330 million-$360 million at $342 million, with the fourth quarter CAFD of $53 million. Commercial operations were also achieved on Daggett 2 and Texas Solar Nova 1 in the fourth quarter, which will help drive CAFD in 2024 and beyond. CWEN also committed to approximately $215 million of new corporate capital deployments in 2023 and an average five-year annual CAFD yield of approximately 10%, while further diversifying CWEN's fleet. Looking 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 group growth of 7% for the full year of 2024. Clearway is also reaffirming its CAFD guidance of $395 million for 2024, with CAFD results in line with expectations to date. Clearway continues to execute on its long-term growth targets of $2.15 of CAFD per share and is reaffirming our ability to achieve the upper range of 5%-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, our sponsor's 29-gigawatt renewable pipeline continues to develop, with approximately 7 gigawatts of late-stage projects targeting CODs over the next four years. Clearway will continue to execute toward its 2026 $2.15 CAFD per share target during 2024, while also focusing on providing further growth visibility beyond this CAFD goal in the years to come. Please turn to page five. Page five provides a summary of Clearway's over $215 million of committed growth investments announced in 2023, some of which are already operational with respect to Texas Solar Nova 1, with the remainder to come online during 2024. These investments are expected to generate five-year annual average CAFD yields of approximately 10%, underpinned by long-term contracts of 15 years and over. The assets comprise diverse generation, with approximately 620 MW of wind and solar generation added and approximately 150 MW of storage. These assets are funded with the excess thermal proceeds and continue Clearway's execution toward the $2.15 CAFD per share goal when these proceeds are fully developed. Please turn to page six. Slide six demonstrates our path to $2.15 per share, with the remaining approximately $200 million of excess thermal proceeds to be deployed in approximately 10% five-year annual average CAFD yield. These remaining assets should hit their commercial operation dates during 2025. As we move from finishing 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. We will provide additional color on potential drops on the next slide and later this year when we anticipate providing estimates on capital deployment and CAFD yields for new projects beyond those identified here for use of the thermal proceeds. An additional avenue of growth is resource adequacy awards and pricing in 2027 and beyond. As highlighted last call, we continue to add length to our RA capacity contracts at strong pricing to drive value. Lastly, third-party M&A is always a focus, and while due to capital market volatility in 2023, we didn't execute on any third-party M&A, Clearway remains focused on this market in 2024. Turning to page seven. In order to provide additional color around opportunities from our sponsor's 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 GW of fleet optimization and expansion opportunities with CODs in 2026 and 2027, which are well diversified between wind repowerings, additional new wind assets, solar storage hybrid assets, and standalone storage projects. These investments are highly diversified also by off-taker and market and will benefit from the ability to deploy domestic content and invest in energy communities under the IRA, thereby delivering competitively priced energy to customers, while meeting return requirements and reducing risk to Clearway's overall fleet. In summary, while it's too early to provide details in terms of potential capital deployment and return levels, investors can be assured there's a strong pipeline of growth at our sponsor that should add significant assets to Clearway Energy, Inc.'s portfolio through the middle of the decade. As always, we will raise capital prudently with a focus on efficient execution to optimize accretion. Now I'll turn over to Sarah. Thanks, Chris. On slide nine, we provide an overview of our financial results, which includes full-year Adjusted EBITDA of $1.058 billion and CAFD of $342 million, which was within the previously provided revised guidance range of $330 million-$360 million. Fourth quarter Adjusted EBITDA was $201 million, and CAFD was $53 million, both consistent with revised internal expectations updated in August of 2023 to reflect renewable resource impacts. Our fourth quarter results reflected strong conventional availability and the benefit of timing of maintenance capital expenditures and other items, offset in part by lower wind resource, which was a trend observed throughout the industry in the fourth quarter. Despite the challenges impacting 2023 full-year 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 through 2026. The remaining thermal sale proceeds are available to fund committed 2023 investments and offered projects that are expected to facilitate achievement of line-of-sight CAFD per share of $2.15. We are reiterating our 2024 CAFD guidance at $395 million. Among other factors, our 2024 CAFD guidance continues to factor in current P50 median production estimates, previously disclosed expectations for maintenance capital expenditures in 2024, and timing of committed growth investments based on estimated project CODs, but excludes 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 target. Now I will turn it back to Chris for closing remarks. Thank you, Sarah. 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 continue to execute toward our $2.15 of CAFD 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 to move the conversation around growth to 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, 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 one one on your touchscreen telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Michael Lonegan with Evercore ISI. Your line is now open. Yeah, hi. Good morning. Thanks for taking my question. So you highlighted a shift in the timing of maintenance CapEx, looks like you didn't spend 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, 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 as a lot of those numbers are immaterial to overall guidance. I'll turn 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 maintenance CapEx to your point, we really looked comprehensively at what happened in 2023, some of the availability shortfalls we suffered, and where we can kind of spend those dollars to improve availability in 2024 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. 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? No, I think you covered it. I mean, maybe just to highlight, the $395 million of CAFD that we're guiding to in 2024 includes 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 revising 2024 for. And to Chris's 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. 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 4-4.5 x corporate debt to corporate EBITDA. Just wondering, once you deploy all the thermal proceeds, presumably you'll organically delever 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 a couple of questions in there, so hopefully I'll unpack it. The first point is it's not as though that we're actually going to rest on our laurels for 215 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 line of sight on just for a point of clarity. And I think as we think about the overall debt, there's about $2.125 billion of bonds. And once we deploy all the thermal proceeds on a run-rate basis, that's about $435 million of CAFD. You add back corporate interests of about, call it, $90 billion-$95 billion. You get about four times, call it, 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 stat. That's the easiest one we use to translate. 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's deployed, on the low end of our target 4-4.5, but also be a little bit fair to your question. Yeah, rating agencies use a number of other metrics. It's just the simplest one to kind of walk through. So hopefully that answered your question. Yes. Thank you. Appreciate the time. Thank you. Our next question comes from the line of Mark Jarvi with CIBC. Your line is now open. Yeah. Good morning, everyone. Maybe just coming back to the comments around third-party M&A and transaction 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 were hearing from some other peers that things are starting to pick up in terms of activity levels, a bit more competition. How would you frame it right now, Chris? Oh, sure. I think from our view, 2023, I think because of that volatility, I mean, we're well aware kind of where treasuries moved and also our stock in the fourth quarter. It's just 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, call it, 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. From my perspective, I think the overall target for M&A is hopefully more robust in 2024 than it was in 2023 and, importantly, our ability to execute. I just think we had very volatile markets which made kind of execution and underwriting very difficult in 2023. How would you think about funding any M&A on top of the already existing commitments? Yeah. Depending on what size of it is, we obviously have an unfunded revolver, which we'd kind of use to warehouse first. And I think to the previous question, we always kind of use excess cash, 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, depending on where capital markets are at the time and the size of the acquisition, we obviously have significant revolver capacity, so we're not forced to go to the markets at a certain size. Understood. 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 sort of the drop-down growth will come from. But is there anything else on the CAFD profile related to tax equity partnerships? Are there any notable flips coming up, potential buyouts, anything that sort of changes the CAFD profile of 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. In our disclosure, you see us 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 CAFD in the long term. Okay. Last question for me. Obviously, we saw PPA prices rise over the last couple of years. Return objectives moved higher, including your own CAFD targets. Assuming that rates plateau or go lower here, 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 at the CEG level in terms of where you're seeing PPA prices clearer than most recently in terms of return potential. [audio distortion] Craig, if you don't mind, speak for CEG. 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, after the pandemic and other changes in trade policy, became more elevated. In today's market, we see PPA prices remaining above where they were for comparable resources before the start of 2023. We and other 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 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 CAFD 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 reflective of CapEx trends and, I guess. [crosstalk] Financing costs and not so much a sacrifice in IRR objectives? No, I don't think so. I mean, I think we've sought to be disciplined. We need to deliver a creative growth for 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 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, Craig. Thanks, Chris. Thank you. Our next question comes from the line of Justin Clare with Roth MKM. Your line is now open. Yep. Thanks for taking our questions here. I was wondering if you could maybe just update us on the progress you're making on contracting the open conventional capacity in 2027. Could we see in the near term here some smaller amounts of that capacity contracted, or is it more likely that something happens in the summer of this year? 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 is a part of it, but anything else meaningful that we should be considering? Sure. So for the first part of your question, don't get me wrong, the major procurement initiative, it's kind of 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 to 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 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 to your question, if you were to say, "Hey, Chris, when would we see a multiple 100-MW move?" That's probably much more as part of that large procurement process. That being said, could you see smaller moves in the interim? Yes. And then your second question about extending other sources of growth through 2027, not to minimize, it really is those three sources. RA is the big part of it. Given pricing that we're seeing, we hope it holds. And the question I just answered, we'll look to see what happens in the RFP processes kind of this spring and summer. M&A is obviously critical, as well as the repowerings and further dropdowns with the 2026 and 2027 COD. 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. It's just a little bit early now to do that. 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 moved up significantly, $1.7 billion. I think last quarter, the expectation is $432 million. So could you just maybe walk us through the change there and help us understand that? Sure. Let me get the schedule for a second. It's the projects under construction. Got it. Go ahead, Sarah. Why don't you just answer? Yeah. So we had several projects that we thank you that we acquired. I think you can see Victory Pass and Arica is the biggest piece of it, the 757, and then also the Rosamond Class B. Those two amounts are for projects under construction. And so once the construction is complete, that will get replaced by 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. What we're thinking about, the amortization on the existing project debt is about the same as it had before. That's really just as the two projects move from construction debt to permanent financing. Yes. That's right. Okay. Appreciate it. Thank you. Thank you. Our next question comes from the line of Noah Kaye with Oppenheimer & Company. Your line is now open. Noah Kaye with Oppenheimer & Company. Okay. Great. Yeah. They cut out for a second, so I just want to make sure I was being called on. Thank you for taking the questions, folks. I think it goes a little bit to one of the earlier questions, but too soon to talk about CAFD 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. So not sure if you can parse that out for us a bit. Yeah. To be simple to your question, no. We think it's too early. I think, once again, if your question is, "Will it be eight?" Probably not. But I think if you look at where CAFD yields have moved and I think also you've noticed that, hopefully, our sponsors have been supportive of moving CAFD yields 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 CAFD yields on some of these drops would be about eight and a half. And then we kind of moved them up in, I believe it was the fourth quarter of 2022, moved them up further in 2023. So there's a ceiling on that. 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 market's at that time and where do we feel comfortable underwriting. So it is too early to tell. 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. Yeah. It's good to see that just from a sponsor development standpoint, I mean, the kind of quantity of projects for 2024 and 2025 looks fairly consistent quarter to quarter. I did notice what appears to be some shift of target CODs of 2026 into 2027. Anything we can understand or read into that, does it speak to IRA clarifications or kind of more persistent in your connection bottlenecks, anything like that? It may be a Craig question. Yeah. [crosstalk] Craig, if you don't mind. Yeah. Yeah. Perceptive question, though. Yeah. What that shift over 2026 to 2027 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 project schedules in a way that we anticipate would be durable and also enabling of capitalization of the project by CWEN 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 for CWEN growth enablement. We have in excess of 15 gigawatts' worth of late-stage interconnection queue 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. 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 CWEN. Instead, right now, as we're prosecuting projects for that mid-decade, are just focused on how to set projects up to maximize value, to construct a portfolio that will be diversified and beneficial for CWEN, and to set projects up for construction and funding schedules that provide us with useful flexibility for how and when the projects would be funded by CWEN. Very helpful, Craig. May I just ask a quick follow-up to someone who knows D.C. as well as anybody in the world? I just want to clarify whether or not the development entity is still kind of waiting on finalization of domestic content guidance to make some of those FIDs. And if so, kind of when you're thinking the guidance may actually be published? I mean, I think that it's a balancing act. 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 that we think would be responsive to U.S. 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 for project timetables that aren't universally flexible in the industry. 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 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. Yeah. Very helpful. Thank you. Thank you. I'm currently showing no further questions at this time. I'd 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 2024 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 2026. So I appreciate everyone's patience during 2023 and moving on to 2024. Thank you, everyone. This concludes today's conference call. Thank you for your participation. You may now disconnect.