Company Quick10K Filing
Quick10K
Nextera Energy Partners
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$51.16 56 $2,873
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
8-K 2019-09-29 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-09-23 Off-BS Arrangement, Exhibits
8-K 2019-09-19 Other Events, Exhibits
8-K 2019-07-24 Earnings, Exhibits
8-K 2019-06-27 Off-BS Arrangement, Exhibits
8-K 2019-06-24 Other Events, Exhibits
8-K 2019-06-10 Enter Agreement, Off-BS Arrangement, Sale of Shares, Shareholder Rights, Amend Bylaw, Other Events, Exhibits
8-K 2019-05-03 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-04-23 Earnings, Exhibits
8-K 2019-03-04 Enter Agreement, Exhibits
8-K 2019-02-19 Officers
8-K 2019-01-25 Officers
8-K 2019-01-25 Earnings, Exhibits
8-K 2019-01-25 Officers
8-K 2019-01-25 Earnings, Exhibits
8-K 2018-12-20 Enter Agreement, M&A, Off-BS Arrangement, Sale of Shares, Shareholder Rights, Officers, Amend Bylaw, Exhibits
8-K 2018-08-31 Enter Agreement, Exhibits
8-K 2018-07-26 Other Events, Exhibits
8-K 2018-06-29 M&A, Exhibits
8-K 2018-03-30 Enter Agreement, Exhibits
8-K 2018-03-21 Enter Agreement, Exhibits
8-K 2018-01-26 Earnings, Exhibits
ENIC Enel Chile 201,771
NEE Nextera Energy 105,936
SO Southern 60,462
EIX Edison 23,533
VST Vistra Energy 11,708
PNW Pinnacle West Capital 10,638
PNM PNM Resources 4,036
EE El Paso Electric 2,705
CVA Covanta Holding 2,198
ESNC Ensync 24
NEP 2019-06-30
Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.A nep2q2019ex31a.htm
EX-31.B nep2q2019ex31b.htm
EX-32 nep2q2019ex32.htm

Nextera Energy Partners Earnings 2019-06-30

NEP 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________

Commission
File
Number
 
Exact name of registrant as specified in its
charter, address of principal executive offices and
registrant's telephone number
 
IRS Employer
Identification
Number
1-36518
 
NEXTERA ENERGY PARTNERS, LP
 
30-0818558


700 Universe Boulevard
Juno Beach, Florida 33408
(561) 694-4000

State or other jurisdiction of incorporation or organization:  Delaware

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol
 
Name of exchange
on which registered
Common units
 
NEP
 
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.   Yes  þ    No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months.   Yes þ    No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

Large Accelerated Filer þ Accelerated Filer Non-Accelerated Filer Smaller Reporting Company Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Exchange Act of 1934.      

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).   Yes   No 

Number of NextEra Energy Partners, LP common units outstanding at June 30, 2019:  56,149,912



DEFINITIONS

Acronyms and defined terms used in the text include the following:
Term
Meaning
2018 Form 10-K
NEP's Annual Report on Form 10-K for the year ended December 31, 2018
AOCI
accumulated other comprehensive income (loss)
ASA
administrative services agreement
BLM
U.S. Bureau of Land Management
Canadian Holdings
NextEra Energy Canada Partners Holdings, ULC and subsidiaries
CITC
convertible investment tax credit
COD
commercial operation date
CSCS agreement
amended and restated cash sweep and credit support agreement
FIT
Feed-in-Tariff
Genesis HoldCo
Genesis Solar Funding, LLC
HLBV
hypothetical liquidation at book value
IDR fee
certain payments from NEP OpCo to NEE Management as a component of the MSA which are based on the achievement by NEP OpCo of certain target quarterly distribution levels to its unitholders
IPP
independent power producer
limited partner interest in NEP OpCo
limited partner interest in NEP OpCo's common units
Management's Discussion
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
March 2019 Form 10-Q
NEP's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019
MSA
amended and restated management services agreement among NEP, NEE Management, NEP OpCo and NEP OpCo GP
MW
megawatt(s)
NEE
NextEra Energy, Inc.
NEECH
NextEra Energy Capital Holdings, Inc.
NEE Equity
NextEra Energy Equity Partners, LP
NEE Management
NextEra Energy Management Partners, LP
NEER
NextEra Energy Resources, LLC
NEP
NextEra Energy Partners, LP
NEP GP
NextEra Energy Partners GP, Inc.
NEP OpCo
NextEra Energy Operating Partners, LP
NEP OpCo GP
NextEra Energy Operating Partners GP, LLC
NOLs
net operating losses
Note __
Note __ to condensed consolidated financial statements
O&M
operations and maintenance
Pemex
Petróleos Mexicanos
PPA
power purchase agreement, which could include contracts under a FIT or RESOP
preferred units
Series A convertible preferred units representing limited partner interests in NEP
RESOP
Renewable Energy Standard Offer Program
SEC
U.S. Securities and Exchange Commission
Texas pipelines
natural gas pipeline assets located in Texas
Texas pipelines acquisition
acquisition of NET Holdings Management, LLC (the Texas pipeline business)
Texas pipeline entities
the subsidiaries of NEP that directly own the Texas pipelines
U.S.
United States of America
U.S. Project Entities
project entities located within the U.S.
VIE
variable interest entity

Each of NEP and NEP OpCo has subsidiaries and affiliates with names that may include NextEra Energy, NextEra Energy Partners and similar references. For convenience and simplicity, in this report, the terms NEP and NEP OpCo are sometimes used as abbreviated references to specific subsidiaries, affiliates or groups of subsidiaries or affiliates. The precise meaning depends on the context. Discussions of NEP's ownership of subsidiaries and projects refers to its controlling interest in the general partner of NEP OpCo and NEP's indirect interest in and control over the subsidiaries of NEP OpCo. See Note 6 for a description of the noncontrolling interest in NEP OpCo.

2


TABLE OF CONTENTS


 
 
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



3


FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of the federal securities laws. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, strategies, future events or performance (often, but not always, through the use of words or phrases such as result, are expected to, will continue, is anticipated, believe, will, could, should, would, estimated, may, plan, potential, future, projection, goals, target, outlook, predict and intend or words of similar meaning) are not statements of historical facts and may be forward looking. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could have a significant impact on NEP's operations and financial results, and could cause NEP's actual results to differ materially from those contained or implied in forward-looking statements made by or on behalf of NEP in this Form 10-Q, in presentations, on its website, in response to questions or otherwise.

Operational Risks
NEP's portfolio includes renewable energy projects that have a limited operating history. Such projects may not perform as expected.
NEP's ability to make cash distributions to its unitholders is affected by wind and solar conditions at its renewable energy projects.
NEP's business, financial condition, results of operations and prospects can be materially adversely affected by weather conditions, including, but not limited to, the impact of severe weather.
Operation and maintenance of renewable energy projects involve significant risks that could result in unplanned power outages, reduced output, personal injury or loss of life.
Natural gas gathering and transmission activities involve numerous risks that may result in accidents or otherwise affect the Texas pipelines’ operations.
NEP depends on certain of the renewable energy projects and pipelines in its portfolio for a substantial portion of its anticipated cash flows.
NEP is pursuing the expansion of natural gas pipelines in its portfolio that will require up-front capital expenditures and expose NEP to project development risks.
NEP's ability to maximize the productivity of the Texas pipeline business and to complete potential pipeline expansion projects is dependent on the continued availability of natural gas production in the Texas pipelines’ areas of operation.
Terrorist acts, cyber-attacks or other similar events could impact NEP's projects, pipelines or surrounding areas and adversely affect its business.
The ability of NEP to obtain insurance and the terms of any available insurance coverage could be materially adversely affected by international, national, state or local events and company-specific events, as well as the financial condition of insurers. NEP's insurance coverage does not insure against all potential risks and it may become subject to higher insurance premiums.
Warranties provided by the suppliers of equipment for NEP's projects may be limited by the ability of a supplier to satisfy its warranty obligations, or by the terms of the warranty, so the warranties may be insufficient to compensate NEP for its losses.
Supplier concentration at certain of NEP's projects may expose it to significant credit or performance risks.
NEP relies on interconnection, transmission and other pipeline facilities of third parties to deliver energy from its renewable energy projects and to transport natural gas to and from the Texas pipelines. If these facilities become unavailable, NEP's projects and pipelines may not be able to operate or deliver energy or may become partially or fully unavailable to transport natural gas.
NEP's business is subject to liabilities and operating restrictions arising from environmental, health and safety laws and regulations, compliance with which may require significant capital expenditures, increase NEP's cost of operations and affect or limit its business plans.
NEP's renewable energy projects may be adversely affected by legislative changes or a failure to comply with applicable energy regulations.
A change in the jurisdictional characterization of some of the Texas pipeline entities' assets, or a change in law or regulatory policy, could result in increased regulation of these assets, which could have a material adverse effect on NEP's business, financial condition, results of operations and ability to make cash distributions to its unitholders.
NEP may incur significant costs and liabilities as a result of pipeline integrity management program testing and any necessary pipeline repair or preventative or remedial measures.
The Texas pipelines’ operations could incur significant costs if the Pipeline and Hazardous Materials Safety Administration or the Railroad Commission of Texas adopts more stringent regulations.
Pemex may claim certain immunities under the Foreign Sovereign Immunities Act and Mexican law, and the Texas pipeline entities' ability to sue or recover from Pemex for breach of contract may be limited and may be exacerbated if there is a deterioration in the economic relationship between the U.S. and Mexico.
NEP does not own all of the land on which the projects in its portfolio are located and its use and enjoyment of the property may be adversely affected to the extent that there are any lienholders or land rights holders that have rights that are superior to NEP's rights or the BLM suspends its federal rights-of-way grants.
NEP is subject to risks associated with litigation or administrative proceedings that could materially impact its operations, including, but not limited to, proceedings related to projects it acquires in the future.


4


NEP's cross-border operations require NEP to comply with anti-corruption laws and regulations of the U.S. government and non-U.S. jurisdictions.
NEP is subject to risks associated with its ownership or acquisition of projects or pipelines that remain under construction, which could result in its inability to complete construction projects on time or at all, and make projects too expensive to complete or cause the return on an investment to be less than expected.

Contract Risks
NEP relies on a limited number of customers and is exposed to the risk that they may be unwilling or unable to fulfill their contractual obligations to NEP or that they otherwise terminate their agreements with NEP.
PG&E, which contributes a significant portion of NEP's revenues, has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Any rejection by PG&E of a material portion of NEP's PPAs with it or any material reduction in the prices NEP charges PG&E under those PPAs that occurs in connection with PG&E's Chapter 11 proceedings, or any events of default under the financing agreements of NEP's solar facilities that provide power and renewable energy credits to PG&E under these PPAs as a result of PG&E's reorganization activities, could have a material adverse effect on NEP's results of operations, financial condition or business.
NEP may not be able to extend, renew or replace expiring or terminated PPAs and natural gas transportation agreements at favorable rates or on a long-term basis.
If the energy production by or availability of NEP's renewable energy projects is less than expected, they may not be able to satisfy minimum production or availability obligations under their PPAs.

Risks Related to NEP's Acquisition Strategy and Future Growth
NEP's growth strategy depends on locating and acquiring interests in additional projects consistent with its business strategy at favorable prices.
NEP OpCo's partnership agreement requires that it distribute its available cash, which could limit NEP's ability to grow and make acquisitions.
Lower prices for other fuel sources may reduce the demand for wind and solar energy.
Reductions in demand for natural gas in the United States or Mexico and low market prices of natural gas could materially adversely affect the Texas pipelines’ operations and cash flows.
Government laws, regulations and policies providing incentives and subsidies for clean energy could be changed, reduced or eliminated at any time and such changes may negatively impact NEP's growth strategy.
NEP's growth strategy depends on the acquisition of projects developed by NEE and third parties, which face risks related to project siting, financing, construction, permitting, the environment, governmental approvals and the negotiation of project development agreements.
Acquisitions of existing clean energy projects involve numerous risks.
Renewable energy procurement is subject to U.S. state regulations, with relatively irregular, infrequent and often competitive procurement windows.
NEP may continue to acquire other sources of clean energy and may expand to include other types of assets. Any further acquisition of non-renewable energy projects may present unforeseen challenges and result in a competitive disadvantage relative to NEP's more-established competitors.
NEP faces substantial competition primarily from regulated utilities, developers, IPPs, pension funds and private equity funds for opportunities in North America.
The natural gas pipeline industry is highly competitive, and increased competitive pressure could adversely affect NEP's business.

Risks Related to NEP's Financial Activities
NEP may not be able to access sources of capital on commercially reasonable terms, which would have a material adverse effect on its ability to consummate future acquisitions.
Restrictions in NEP and its subsidiaries' financing agreements could adversely affect NEP's business, financial condition, results of operations and ability to make cash distributions to its unitholders.
NEP's cash distributions to its unitholders may be reduced as a result of restrictions on NEP's subsidiaries’ cash distributions to NEP under the terms of their indebtedness.
NEP's subsidiaries’ substantial amount of indebtedness may adversely affect NEP's ability to operate its business, and its failure to comply with the terms of its subsidiaries' indebtedness could have a material adverse effect on NEP's financial condition.
NEP is exposed to risks inherent in its use of interest rate swaps.

Risks Related to NEP's Relationship with NEE
NEE exercises significant influence over NEP.
Under the CSCS agreement, NEP receives credit support from NEE and its affiliates. NEP's subsidiaries may default under contracts or become subject to cash sweeps if credit support is terminated, if NEE or its affiliates fail to honor their obligations under credit support arrangements, or if NEE or another credit support provider ceases to satisfy creditworthiness requirements, and NEP will be required in certain circumstances to reimburse NEE for draws that are made on credit support.
NEER or one of its affiliates is permitted to borrow funds received by NEP's subsidiaries and is obligated to return these funds only as needed to cover project costs and distributions or as demanded by NEP OpCo. NEP's financial condition

5


and ability to make distributions to its unitholders, as well as its ability to grow distributions in the future, is highly dependent on NEER’s performance of its obligations to return all or a portion of these funds.
NEP may not be able to consummate future acquisitions.
NEER's right of first refusal may adversely affect NEP's ability to consummate future sales or to obtain favorable sale terms.
NEP GP and its affiliates may have conflicts of interest with NEP and have limited duties to NEP and its unitholders.
NEP GP and its affiliates and the directors and officers of NEP are not restricted in their ability to compete with NEP, whose business is subject to certain restrictions.
NEP may only terminate the MSA under certain specified conditions.
If the agreements with NEE Management or NEER are terminated, NEP may be unable to contract with a substitute service provider on similar terms.
NEP's arrangements with NEE limit NEE's potential liability, and NEP has agreed to indemnify NEE against claims that it may face in connection with such arrangements, which may lead NEE to assume greater risks when making decisions relating to NEP than it otherwise would if acting solely for its own account.

Risks Related to Ownership of NEP's Units
NEP's ability to make distributions to its unitholders depends on the ability of NEP OpCo to make cash distributions to its limited partners.
If NEP incurs material tax liabilities, NEP's distributions to its unitholders may be reduced, without any corresponding reduction in the amount of the IDR fee.
Holders of NEP's units may be subject to voting restrictions.
NEP's partnership agreement replaces the fiduciary duties that NEP GP and NEP's directors and officers might have to holders of its common units with contractual standards governing their duties.
NEP's partnership agreement restricts the remedies available to holders of NEP's common units for actions taken by NEP's directors or NEP GP that might otherwise constitute breaches of fiduciary duties.
Certain of NEP's actions require the consent of NEP GP.
Holders of NEP's common units and preferred units currently cannot remove NEP GP without NEE's consent.
NEE's interest in NEP GP and the control of NEP GP may be transferred to a third party without unitholder consent.
The IDR fee may be assigned to a third party without unitholder consent.
NEP may issue additional units without unitholder approval, which would dilute unitholder interests.
Reimbursements and fees owed to NEP GP and its affiliates for services provided to NEP or on NEP's behalf will reduce cash distributions from NEP OpCo and from NEP to NEP's unitholders, and there are no limits on the amount that NEP OpCo may be required to pay.
Discretion in establishing cash reserves by NEP OpCo GP may reduce the amount of cash distributions to unitholders.
NEP OpCo can borrow money to pay distributions, which would reduce the amount of credit available to operate NEP's business.
Increases in interest rates could adversely impact the price of NEP's common units, NEP's ability to issue equity or incur debt for acquisitions or other purposes and NEP's ability to make cash distributions to its unitholders.
The price of NEP's common units may fluctuate significantly and unitholders could lose all or part of their investment.
The liability of holders of NEP's units, which represent limited partnership interests in NEP, may not be limited if a court finds that unitholder action constitutes control of NEP's business.
Unitholders may have liability to repay distributions that were wrongfully distributed to them.
Provisions in NEP's partnership agreement may discourage or delay an acquisition of NEP that NEP unitholders may consider favorable, which could decrease the value of NEP's common units, and could make it more difficult for NEP unitholders to change the board.
The board, a majority of which may be affiliated with NEE, decides whether to retain separate counsel, accountants or others to perform services for NEP.
The New York Stock Exchange does not require a publicly traded limited partnership like NEP to comply with certain of its corporate governance requirements.
The issuance of preferred units or other securities convertible into common units may affect the market price for NEP's common units, will dilute common unitholders’ ownership in NEP and may decrease the amount of cash available for distribution for each common unit.
The preferred units have rights, preferences and privileges that are not held by, and are preferential to the rights of, holders of the common units.

Taxation Risks
NEP's future tax liability may be greater than expected if NEP does not generate NOLs sufficient to offset taxable income or if tax authorities challenge certain of NEP's tax positions.
NEP's ability to use NOLs to offset future income may be limited.
NEP will not have complete control over NEP's tax decisions.
A valuation allowance may be required for NEP's deferred tax assets.
Distributions to unitholders may be taxable as dividends.


6


These factors should be read together with the risk factors included in Part I, Item 1A. Risk Factors in the 2018 Form 10-K and Part II, Item 1A. Risk Factors in the March 2019 Form 10-Q and investors should refer to those sections of the 2018 Form 10-K and the March 2019 Form 10-Q. Any forward-looking statement speaks only as of the date on which such statement is made, and NEP undertakes no obligation to update any forward-looking statement to reflect events or circumstances, including, but not limited to, unanticipated events, after the date on which such statement is made, unless otherwise required by law. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement.

Website Access to U.S. Securities and Exchange Commission (SEC) Filings. NEP makes its SEC filings, including the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, available free of charge on NEP's internet website, www.nexteraenergypartners.com, as soon as reasonably practicable after those documents are electronically filed with or furnished to the SEC. The information and materials available on NEP's website are not incorporated by reference into this Form 10-Q.

7


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

NEXTERA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(millions, except per unit amounts)
(unaudited)

 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2019
 
2018(a)
 
2019
 
2018(a)
OPERATING REVENUES
 
 
 
 
 
 
 
Renewable energy sales
$
170

 
$
169

 
$
294

 
$
325

Texas pipelines service revenues
49

 
56

 
103

 
112

Total operating revenues(b)
219

 
225

 
397

 
437

OPERATING EXPENSES (INCOME)
 
 
 
 
 
 
 
Operations and maintenance(c)
82

 
63

 
157

 
125

Depreciation and amortization
63

 
49

 
124

 
102

Gain on disposal of Canadian Holdings

 
(153
)
 

 
(153
)
Taxes other than income taxes and other
7

 
5

 
13

 
11

Total operating expenses (income) - net
152

 
(36
)
 
294

 
85

OPERATING INCOME
67

 
261

 
103

 
352

OTHER INCOME (DEDUCTIONS)
 
 
 
 
 
 
 
Interest expense
(207
)
 
(21
)
 
(362
)
 
(124
)
Equity in earnings of equity method investees
9

 
13

 
8

 
16

Equity in earnings (losses) of non-economic ownership interests
(4
)
 
7

 
(11
)
 
13

Other - net
1

 
11

 
2

 
13

Total other income (deductions) - net
(201
)
 
10

 
(363
)
 
(82
)
INCOME (LOSS) BEFORE INCOME TAXES
(134
)
 
271

 
(260
)
 
270

INCOME TAX BENEFIT
(10
)
 
(21
)
 
(16
)
 
(2
)
NET INCOME (LOSS)
(124
)
 
292

 
(244
)
 
272

Net income attributable to preferred distributions
(6
)
 
(6
)
 
(12
)
 
(12
)
Net loss (income) attributable to noncontrolling interests
102

 
(204
)
 
207

 
(103
)
NET INCOME (LOSS) ATTRIBUTABLE TO NEXTERA ENERGY PARTNERS, LP
$
(28
)
 
$
82

 
$
(49
)
 
$
157

 
 
 
 
 
 
 
 
Weighted average number of common units outstanding - basic
56.2


54.3

 
56.1

 
54.3

Weighted average number of common units outstanding - assuming dilution
75.8


74.0

 
75.8

 
74.0

Earnings (loss) per common unit attributable to NextEra Energy Partners, LP - basic
$
(0.49
)

$
1.51

 
$
(0.88
)
 
$
2.88

Earnings (loss) per common unit attributable to NextEra Energy Partners, LP - assuming dilution
$
(0.49
)

$
1.42

 
$
(0.88
)
 
$
2.67

____________________
(a)
Prior-period financial information has been retrospectively adjusted to include the adoption of an accounting standards update related to leases.
(b)
Includes related party revenues of $1 million and $1 million for the three months ended June 30, 2019 and 2018, respectively, and $2 million and $2 million for the six months ended June 30, 2019 and 2018, respectively.
(c)
Includes O&M expenses related to renewable energy projects of $47 million and $32 million for the three months ended June 30, 2019 and 2018, respectively, and $85 million and $62 million for the six months ended June 30, 2019 and 2018, respectively. Includes O&M expenses related to the Texas pipelines of $8 million and $11 million for the three months ended June 30, 2019 and 2018, respectively, and $21 million and $22 million for the six months ended June 30, 2019 and 2018, respectively. Total O&M expenses presented include related party amounts of $24 million and $24 million for the three months ended June 30, 2019 and 2018, respectively, and $48 million and $48 million for the six months ended June 30, 2019 and 2018, respectively.









This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2018 Form 10-K.

8


NEXTERA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(millions)
(unaudited)

 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2019
 
2018(a)
 
2019
 
2018(a)
NET INCOME (LOSS)
$
(124
)
 
$
292

 
$
(244
)
 
$
272

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
 
 
 
 
 
 
 
Reclassification from AOCI to net income (net of $0, $0 tax expense, $0 tax benefit and $1 tax expense, respectively)

 
1

 
(6
)
 
2

Net unrealized losses on foreign currency translation (net of $0, $0 tax benefit, $0 and $1 tax benefit, respectively)

 
(2
)
 

 
(6
)
Other comprehensive income (loss) related to equity method investees (net of $0, $0 tax benefit, $0 tax expense and $0, respectively)

 
(4
)
 
1

 

Total other comprehensive income (loss), net of tax

 
(5
)
 
(5
)
 
(4
)
Impact of disposal of Canadian Holdings (net of $0, $3 tax expense, $0 and $3 tax expense, respectively)

 
107

 

 
107

COMPREHENSIVE INCOME (LOSS)
(124
)
 
394

 
(249
)
 
375

Comprehensive income attributable to preferred distributions
(6
)
 
(6
)
 
(12
)
 
(12
)
Comprehensive loss (income) attributable to noncontrolling interests
102

 
(305
)
 
210

 
(206
)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NEXTERA ENERGY PARTNERS, LP
$
(28
)
 
$
83

 
$
(51
)
 
$
157

____________________
(a)
Prior-period financial information has been retrospectively adjusted to include the adoption of an accounting standards update related to leases.


 






























This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2018 Form 10-K.

9


NEXTERA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(millions)
(unaudited)

 
June 30,
2019
 
December 31, 2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
163

 
$
147

Accounts receivable
101

 
63

Other receivables
164

 
17

Due from related parties
738

 
68

Restricted cash
4

 
8

Other current assets
29

 
37

Total current assets
1,199

 
340

Non-current assets:
 
 
 
Property, plant and equipment - net
7,071

 
6,770

Deferred income taxes
123

 
108

Investments in equity method investees
319

 
214

Investments in non-economic ownership interests
3

 
20

Intangible assets – customer relationships - net
635

 
644

Intangible assets – PPAs - net
1,676

 
617

Goodwill
598

 
584

Other non-current assets
144

 
108

Total non-current assets
10,569

 
9,065

TOTAL ASSETS
$
11,768

 
$
9,405

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued expenses
$
111

 
$
10

Due to related parties
59

 
45

Current portion of long-term debt
599

 
707

Accrued interest
31

 
31

Accrued property taxes
15

 
19

Other current liabilities
57

 
47

Total current liabilities
872

 
859

Non-current liabilities:
 
 
 
Long-term debt
3,676

 
2,728

Deferred income taxes
10

 
12

Asset retirement obligation
135

 
95

Derivatives
371

 
104

Non-current due to related party
57

 
34

Other non-current liabilities
147

 
35

Total non-current liabilities
4,396

 
3,008

TOTAL LIABILITIES
5,268

 
3,867

COMMITMENTS AND CONTINGENCIES

 

EQUITY
 
 
 
Preferred units (14.0 and 14.0 units issued and outstanding, respectively)
548

 
548

Common units (56.2 and 56.1 units issued and outstanding, respectively)
1,704

 
1,804

Accumulated other comprehensive loss
(8
)
 
(6
)
Noncontrolling interests
4,256

 
3,192

TOTAL EQUITY
6,500

 
5,538

TOTAL LIABILITIES AND EQUITY
$
11,768

 
$
9,405



This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2018 Form 10-K.

10


NEXTERA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions)
(unaudited)
 
Six Months Ended June 30,
 
2019
 
2018(a)
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
Net income (loss)
$
(244
)
 
$
272

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation and amortization
124

 
102

Intangible amortization - PPA
21

 

Change in value of derivative contracts
277

 
10

Deferred income taxes
(16
)
 
7

Equity in earnings of equity method investees, net of distributions received
(8
)
 
2

Equity in losses (earnings) of non-economic ownership interests
11

 
(13
)
Gain on disposal of Canadian Holdings

 
(153
)
Other - net
10

 
(4
)
Changes in operating assets and liabilities:
 
 
 
Other current assets
(20
)
 
(15
)
Other non-current assets
(3
)
 
2

Other current liabilities
(20
)
 
(27
)
Other non-current liabilities
(2
)
 

Net cash provided by operating activities
130

 
183

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
Acquisition of membership interests in subsidiaries - net
(1,028
)
 

Capital expenditures
(6
)
 
(7
)
Proceeds from the sale of Canadian Holdings - net

 
517

Payments from (to) related parties under CSCS agreement - net
(671
)
 
(50
)
Other
4

 

Net cash provided by (used in) investing activities
(1,701
)
 
460

CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
Proceeds from issuance of common units - net
3

 

Issuances of long-term debt
1,150

 

Retirements of long-term debt
(310
)
 
(55
)
Deferred financing costs
(11
)
 

Partner contributions
2

 
31

Partner distributions
(158
)
 
(134
)
Preferred unit distributions
(12
)
 
(9
)
Proceeds from differential membership investors
31

 
28

Payments to differential membership investors
(16
)
 
(11
)
Payments to Class B noncontrolling interests investors
(8
)
 

Proceeds on sale of Class B noncontrolling interest - net
893

 

Change in amounts due to related parties
19

 
(1
)
Net cash provided by (used in) financing activities
1,583

 
(151
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash

 
(2
)
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
12

 
490

CASH, CASH EQUIVALENTS AND RESTRICTED CASH - BEGINNING OF PERIOD
166

 
198

CASH, CASH EQUIVALENTS AND RESTRICTED CASH - END OF PERIOD
$
178

 
$
688

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 
 
 
Partner noncash distributions
$
3

 
$
17

Partner noncash contributions
$
11

 
$

Change in noncash investments in equity method investees - net
$
6

 
$
5

Accrued preferred distributions
$
6

 
$
6

_________________________
(a)
Prior-period financial information has been retrospectively adjusted to include the adoption of an accounting standards update related to leases.



This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2018 Form 10-K.

11


NEXTERA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(millions)
(unaudited)

 
Preferred Units
 
Common Units
 
 
 
 
 
 
 
Units
 
Amount
 
Units
 
Amount
 
Accumulated
Other
Comprehensive
Loss
 
Non-controlling
Interests
 
Total
Equity
Balances, December 31, 2018
14.0

 
$
548

 
56.1

 
$
1,804

 
$
(6
)
 
$
3,192

 
$
5,538

Issuance of common units - net

 

 
0.1

 
1



 

 
1

Net income (loss)

 
6

 

 
(22
)
 

 
(105
)
 
(121
)
Other comprehensive loss

 

 

 

 
(2
)
 
(3
)
 
(5
)
Related party contributions

 

 

 

 

 
1

 
1

Related party distributions

 

 

 

 

 
(51
)
 
(51
)
Changes in non-economic ownership interests

 

 

 

 

 
(6
)
 
(6
)
Differential membership interests activity

 

 

 

 

 
24

 
24

Payments to Class B noncontrolling interests investors

 

 

 

 

 
(5
)
 
(5
)
Distributions to unitholders(a)

 
(6
)
 

 
(26
)
 

 

 
(32
)
Other

 

 

 

 

 
1

 
1

Balances, March 31, 2019
14.0

 
548

 
56.2

 
1,757

 
(8
)
 
3,048

 
5,345

Issuance of common units - net

 

 

 
1

 

 

 
1

Acquisition of subsidiaries with noncontrolling ownership interest

 

 

 

 

 
472

 
472

Net income (loss)

 
6

 

 
(28
)
 

 
(102
)
 
(124
)
Related party note receivable

 

 

 

 

 
1

 
1

Related party contributions

 

 

 

 

 
11

 
11

Related party distributions

 

 

 

 

 
(56
)
 
(56
)
Differential membership interests activity

 

 

 

 

 
(8
)
 
(8
)
Payments to Class B noncontrolling interests investors

 

 

 

 

 
(3
)
 
(3
)
Distributions to unitholders(a)

 
(6
)
 

 
(27
)
 

 

 
(33
)
Sale of Class B noncontrolling interest - net

 

 

 

 

 
893

 
893

Other

 

 

 
1

 

 

 
1

Balances, June 30, 2019
14.0

 
$
548

 
56.2

 
$
1,704

 
$
(8
)
 
$
4,256

 
$
6,500

_________________________
(a)
Distributions per common unit of $0.4825 and $0.4650 were paid during the three months ended June 30, 2019 and March 31, 2019, respectively. At June 30, 2019, $6 million of preferred unit distributions were accrued and are payable in August 2019.
.
 
Preferred Units
 
Common Units
 
 
 
 
 
 
 
Units
 
Amount
 
Units
 
Amount(b)
 
Accumulated
Other
Comprehensive
Income
 
Non-
controlling
Interests
(b)
 
Total
Equity
(b)
Balances, December 31, 2017
14.0

 
$
548

 
54.3

 
$
1,641

 
$
1

 
$
34

 
$
2,224

Net income (loss)

 
6

 

 
74

 

 
(99
)
 
(19
)
Other comprehensive income

 

 

 

 

 
1

 
1

Related party note receivable

 

 

 

 

 
29

 
29

Related party distributions

 

 

 

 

 
(64
)
 
(64
)
Changes in non-economic ownership interests

 

 

 

 

 
(6
)
 
(6
)
Differential membership interests activity

 

 

 

 

 
23

 
23

Distributions to unitholders(a)

 
(6
)
 

 
(22
)
 

 

 
(28
)
Adoption of accounting standards update

 

 

 
9

 

 
1,414

 
1,423

Balances, March 31, 2018
14.0

 
548

 
54.3

 
1,702

 
1

 
1,332

 
3,583

Net income

 
6

 

 
82

 

 
204

 
292

Other comprehensive loss

 

 

 

 
(1
)
 
(4
)
 
(5
)
Related party note receivable

 

 

 

 

 
2

 
2

Related party distributions

 

 

 

 

 
(41
)
 
(41
)
Changes in non-economic ownership interests

 

 

 

 

 
1

 
1

Differential membership interests activity

 

 

 

 

 
(6
)
 
(6
)
Distributions to unitholders(a)

 
(6
)
 

 
(23
)
 

 

 
(29
)
Disposal of Canadian Holdings

 

 

 

 
2

 
105

 
107

Adoption of accounting standards update

 

 

 
(2
)
 

 
2

 

Balances, June 30, 2018
14.0

 
$
548