Exhibit 99.1
Introduction
The unaudited pro forma consolidated statements of income and balance sheet (pro forma financial statements) are derived from the historical consolidated financial statements of NextEra Energy Partners, LP (NEP) and NextEra Energy Canada Partners Holdings, ULC and subsidiaries (Canadian Holdings) to illustrate the potential effect of the June 29, 2018 sale by a subsidiary of NEP of Canadian Holdings. The pro forma financial statements are based on, and should be read in conjunction with, the consolidated financial statements of NEP included in NEP's Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (SEC). The pro forma financial statements are also based on, and should be read in conjunction with, the condensed consolidated financial statements of NEP included in NEP's Quarterly Report on Form 10-Q for the three months ended March 31, 2018 filed with the SEC.
The historical consolidated financial statements have been adjusted in the pro forma consolidated financial statements to give effect to pro forma events that are (1) directly attributable to the sale of Canadian Holdings, (2) factually supportable and (3) with respect to the pro forma statements of income, expected to have a continuing impact on the consolidated results. The pro forma financial statements have been derived by the application of pro forma adjustments to the historical consolidated financial statements of NEP. The pro forma consolidated statements of income for the year ended December 31, 2017 and for the three months ended March 31, 2018 give effect to the sale of Canadian Holdings as if it had occurred on January 1, 2017. The unaudited pro forma consolidated balance sheet as of March 31, 2018 gives effect to the sale of Canadian Holdings as if it had occurred on March 31, 2018.
The pro forma financial statements have been presented for informational purposes only and are not necessarily indicative of what the results of operations and financial position would have been had the sale of Canadian Holdings been completed on the dates indicated.
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NEXTERA ENERGY PARTNERS, LP UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME (millions, except per unit amounts) | | |
| | | | | | |
| | Three months ended March 31, 2018 |
| | NEP
Historical | | Pro Forma Adjustments | | NEP Pro Forma |
| OPERATING REVENUES | | | | |
|
|
| Renewable energy sales | $ | 156 |
| | $ | (46 | ) | (a) | $ | 110 |
|
| Texas pipelines service revenues | 56 |
| | — |
| | 56 |
|
| Total operating revenues | 212 |
| | (46 | ) | | 166 |
|
| OPERATING EXPENSES | | | | |
|
|
| Operations and maintenance | 64 |
| | (4 | ) | (a) | 60 |
|
| Depreciation and amortization | 53 |
| | (5 | ) | (a) | 48 |
|
| Taxes other than income taxes and other | 5 |
| | — |
| | 5 |
|
| Total operating expenses | 122 |
| | (9 | ) | | 113 |
|
| OPERATING INCOME | 90 |
| | (37 | ) | | 53 |
|
| OTHER INCOME (DEDUCTIONS) | | | | | |
| Interest expense | (103 | ) | | 8 |
| (a) | (95 | ) |
| Equity in earnings of equity method investee | 3 |
| | — |
| | 3 |
|
| Equity in earnings of non-economic ownership interests | 6 |
| | — |
| | 6 |
|
| Other - net | 2 |
| | — |
| | 2 |
|
| Total other income (deductions) - net | (92 | ) | | 8 |
| | (84 | ) |
| LOSS BEFORE INCOME TAXES | (2 | ) | | (29 | ) | | (31 | ) |
| INCOME TAXES | 19 |
| | (5 | ) | (b) | 14 |
|
| NET LOSS | (21 | ) | | (24 | ) | | (45 | ) |
| Net income attributable to preferred distributions | (6 | ) | | — |
| | (6 | ) |
| Net loss attributable to noncontrolling interests | 100 |
| | 15 |
| (c) | 115 |
|
| NET INCOME ATTRIBUTABLE TO NEXTERA ENERGY PARTNERS, LP | $ | 73 |
| | $ | (9 | ) | | $ | 64 |
|
| | | | | | |
| Weighted average number of common units outstanding - basic | 54.3 |
| | — |
| | 54.3 |
|
| Weighted average number of common units outstanding - assuming dilution | 74.0 |
| | — |
| | 74.0 |
|
| Earnings per common unit attributable to NextEra Energy Partners, LP - basic | $ | 1.35 |
| | $ | (0.17 | ) | | $ | 1.18 |
|
| Earnings per common unit attributable to NextEra Energy Partners, LP - assuming dilution | $ | 1.21 |
| | $ | (0.15 | ) | | $ | 1.06 |
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NEXTERA ENERGY PARTNERS, LP UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME (millions, except per unit amounts) | | |
| | | | | | |
| | Year ended December 31, 2017 |
| | NEP
Historical | | Pro Forma Adjustments | | NEP Pro Forma |
| OPERATING REVENUES | | | | |
|
|
| Renewable energy sales | $ | 613 |
| | $ | (142 | ) | (a) | $ | 471 |
|
| Texas pipelines service revenues | 194 |
| | — |
| | 194 |
|
| Total operating revenues | 807 |
| | (142 | ) | | 665 |
|
| OPERATING EXPENSES | | | | | |
| Operations and maintenance | 253 |
| | (16 | ) | (a) | 237 |
|
| Depreciation and amortization | 226 |
| | (31 | ) | (a) | 195 |
|
| Taxes other than income taxes and other | 21 |
| | — |
| | 21 |
|
| Total operating expenses | 500 |
| | (47 | ) | | 453 |
|
| OPERATING INCOME | 307 |
| | (95 | ) | | 212 |
|
| OTHER INCOME (DEDUCTIONS) |
|
| |
|
| |
|
|
| Interest expense | (199 | ) | | 30 |
| (a) | (169 | ) |
| Benefits associated with differential membership interests - net | 119 |
| | — |
| | 119 |
|
| Equity in earnings of equity method investee | 40 |
| | — |
| | 40 |
|
| Equity in earnings of non-economic ownership interests | 11 |
| | — |
| | 11 |
|
| Other - net | (2 | ) | | — |
| | (2 | ) |
| Total other income (deductions) - net | (31 | ) | | 30 |
| | (1 | ) |
| INCOME BEFORE INCOME TAXES | 276 |
| | (65 | ) | | 211 |
|
| INCOME TAXES | 167 |
| | (26 | ) | (b) | 141 |
|
| NET INCOME | 109 |
| | (39 | ) | | 70 |
|
| Net income attributable to preferred distributions | (3 | ) | | — |
| | (3 | ) |
| Net income attributable to noncontrolling interests | (171 | ) | | 32 |
| (c) | (139 | ) |
| NET LOSS ATTRIBUTABLE TO NEXTERA ENERGY PARTNERS, LP | $ | (65 | ) | | $ | (7 | ) | | $ | (72 | ) |
| | | | | | |
| Weighted average number of common units outstanding - basic and assuming dilution | 54.2 |
| | — |
| | 54.2 |
|
| Loss per common unit attributable to NextEra Energy Partners, LP - basic and assuming dilution | $ | (1.20 | ) | | $ | (0.13 | ) | | $ | (1.33 | ) |
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NEXTERA ENERGY PARTNERS, LP UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (millions) | | | | |
| | | | | | |
| | As of March 31, 2018 |
| | NEP
Historical | | Pro Forma Adjustments | | NEP Pro Forma |
| ASSETS | | | | | |
| Current assets: | | | | | |
| Cash and cash equivalents | $ | 164 |
| | $ | 519 |
| (d) | $ | 683 |
|
| Accounts receivable | 72 |
| | — |
| | 72 |
|
| Due from related parties | 91 |
| | — |
| | 91 |
|
| Restricted cash | 12 |
| | — |
| | 12 |
|
| Assets held for sale | 913 |
| | (913 | ) | (e) | — |
|
| Other current assets | 38 |
| | — |
| | 38 |
|
| Total current assets | 1,290 |
| | (394 | ) | | 896 |
|
| Non-current assets: | | | | |
|
| Property, plant and equipment - net | 5,239 |
| | (26 | ) | (e) | 5,213 |
|
| Deferred income taxes | 152 |
| | (30 | ) | (b) | 122 |
|
| Intangible assets – customer relationships - net | 657 |
| | — |
| | 657 |
|
| Goodwill | 628 |
| | (52 | ) | (e) | 576 |
|
| Investment in equity method investee | 215 |
| | — |
| | 215 |
|
| Investments in non-economic ownership interests | 11 |
| | — |
| | 11 |
|
| Other non-current assets | 94 |
| | — |
| | 94 |
|
| Total non-current assets | 6,996 |
| | (108 | ) | | 6,888 |
|
| TOTAL ASSETS | $ | 8,286 |
| | $ | (502 | ) | | $ | 7,784 |
|
| LIABILITIES AND EQUITY | | | | |
|
| Current liabilities: | | | | |
|
| Accounts payable and accrued expenses | $ | 10 |
| | $ | — |
| | $ | 10 |
|
| Short-term debt | — |
| | — |
| | — |
|
| Due to related parties | 39 |
| | — |
| | 39 |
|
| Current maturities of long-term debt | 62 |
| | — |
| | 62 |
|
| Acquisition holdback | — |
| | — |
| | — |
|
| Accrued interest | 13 |
| | — |
| | 13 |
|
| Derivatives | 4 |
| | — |
| | 4 |
|
| Liabilities associated with assets held for sale | 824 |
| | (824 | ) | (e) | — |
|
| Other current liabilities | 40 |
| | 12 |
| (f) | 52 |
|
| Total current liabilities | 992 |
| | (812 | ) | | 180 |
|
| Non-current liabilities: | | | | |
|
| Long-term debt | 3,518 |
| | — |
| | 3,518 |
|
| Deferred income taxes | 5 |
| | — |
| | 5 |
|
| Asset retirement obligation | 68 |
| | — |
| | 68 |
|
| Non-current due to related party | 22 |
| | — |
| | 22 |
|
| Other non-current liabilities | 116 |
| | — |
| | 116 |
|
| Total non-current liabilities | 3,729 |
| | — |
| | 3,729 |
|
| TOTAL LIABILITIES | 4,721 |
| | (812 | ) | | 3,909 |
|
| COMMITMENTS AND CONTINGENCIES | | | | |
|
| EQUITY | | | | |
|
| Preferred units (14.0 units issued and outstanding) | 548 |
| | — |
| | 548 |
|
| Common units (54.3 units issued and outstanding) | 1,699 |
| | 90 |
| (g) | 1,789 |
|
| Accumulated other comprehensive income | 1 |
| | 1 |
| (e) | 2 |
|
| Noncontrolling interests | 1,317 |
| | 219 |
| (g) | 1,536 |
|
| TOTAL EQUITY | 3,565 |
| | 310 |
| | 3,875 |
|
| TOTAL LIABILITIES AND EQUITY | $ | 8,286 |
| | $ | (502 | ) | | $ | 7,784 |
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Notes to Pro Forma Financial Statements
Pro Forma Adjustments and Assumptions
The adjustments are based on currently available information and certain estimates and assumptions, and therefore the actual effects of these transactions will differ from the pro forma adjustments. A general description of these transactions and adjustments is provided as follows:
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| (a) | Reflects the removal of operating revenues, operating expenses and interest expense associated with the activities of Canadian Holdings. |
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| (b) | Reflects the removal of income taxes associated with Canadian Holdings including NEP's US taxes related to Canadian Holdings, net of US tax benefit. |
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| (c) | Reflects adjustments to net income attributable to noncontrolling interest based on the allocation of the pro forma adjustments. |
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| (d) | Reflects estimated cash consideration from the sale of Canadian Holdings including working capital adjustments, net of approximately $59 million of cash at Canadian Holdings, based on balances as of March 31, 2018. |
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| (e) | Reflects the removal of assets, liabilities and accumulated other comprehensive losses associated with Canadian Holdings. |
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| (f) | Reflects the estimated indemnity payment to the purchaser for expected future adjusted cost basis Canadian taxes. |
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| (g) | Primarily reflects the estimated after-tax gain of approximately $311 million that would have been recorded if the sale of Canadian Holdings closed on March 31, 2018. |
