EX-99.1 4 d586935dex991.htm EX-99.1 EX-99.1

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 NET Midstream, LLC and NEP DC Holdings, LLC, both NEP subsidiaries that indirectly own interests in natural gas pipeline assets located in Texas (Texas pipelines), to illustrate the potential effect of the November 6, 2023 agreement to sell the Texas pipelines entered into by a subsidiary of NEP. 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, 2022 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 nine months ended September 30, 2023 filed with the SEC.

The historical consolidated financial statements have been adjusted in the pro forma financial statements to give effect to transaction accounting adjustments that reflect the disposal of the Texas pipelines. The pro forma financial statements have been derived by the application of transaction accounting adjustments to the historical consolidated financial statements of NEP. The unaudited pro forma consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 and for the nine months ended September 30, 2023 give effect to the sale of the Texas pipelines, which will be accounted for as discontinued operations, as if it had occurred on January 1, 2020. Since the unaudited pro forma consolidated statements of income only include continuing operations, the estimated gain on sale is not included in any period presented. The unaudited pro forma consolidated balance sheet as of September 30, 2023 gives effect to the sale of the Texas pipelines as if it had occurred on September 30, 2023.

The sale of the Texas pipelines is subject to closing adjustments that have not yet been finalized. Accordingly, the transaction accounting adjustments are preliminary, and have been made solely for the purpose of providing pro forma financial statements as required by the SEC rules. Differences between these preliminary estimates and the final sale accounting may be material. 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 the Texas pipeline been completed on the dates indicated, nor are they necessarily indicative of future results of operations or financial position.

 

1


NEXTERA ENERGY PARTNERS, LP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

(millions, except per unit amounts)

 

     Nine months ended September 30, 2023  
     NEP
Historical
    Transaction
Accounting
Adjustments
        NEP Pro
Forma
 

OPERATING REVENUES

        

Renewable energy sales

   $ 847     $ —         $ 847  

Texas pipelines service revenues

     171       (171   (a)     —    
  

 

 

   

 

 

     

 

 

 

Total operating revenues

     1,018       (171       847  
  

 

 

   

 

 

     

 

 

 

OPERATING EXPENSES

        

Operations and maintenance

     412       (22   (a)     390  

Depreciation and amortization

     412       (27   (a)     385  

Taxes other than income taxes and other

     54       (6   (a)     48  
  

 

 

   

 

 

     

 

 

 

Total operating expenses – net

     878       (55       823  
  

 

 

   

 

 

     

 

 

 

OPERATING INCOME

     140       (116       24  
  

 

 

   

 

 

     

 

 

 

OTHER INCOME (DEDUCTIONS)

        

Interest expense

     (207     13     (a)     (194

Equity in earnings of equity method investees

     131       (2   (a)     129  

Equity in earnings of non-economic ownership interests

     16       —           16  

Other – net

     6       1     (a)     7  
  

 

 

   

 

 

     

 

 

 

Total other income (deductions) – net

     (54     12         (42
  

 

 

   

 

 

     

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

     86       (104       (18

INCOME TAXES

     16       (8   (b)     8  
  

 

 

   

 

 

     

 

 

 

NET INCOME (LOSS)

     70       (96       (26

NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

     18       71     (c)     89  
  

 

 

   

 

 

     

 

 

 

NET INCOME ATTRIBUTABLE TO NEXTERA ENERGY PARTNERS, LP

   $ 88     $ (25     $ 63  
  

 

 

   

 

 

     

 

 

 

Earnings per common unit attributable to NextEra Energy Partners, LP – basic

   $ 0.96     $ (0.26     $ 0.70  

Earnings per common unit attributable to NextEra Energy Partners, LP – assuming dilution

   $ 0.96     $ (0.26     $ 0.70  

Weighted-average number of common units outstanding – basic

     91.0       —           91.0  

Weighted-average number of common units outstanding – assuming dilution

     91.0       —           91.0  

 

2


NEXTERA ENERGY PARTNERS, LP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

(millions, except per unit amounts)

 

     Year ended December 31, 2022  
     NEP
Historical
    Transaction
Accounting
Adjustments
        NEP Pro
Forma
 

OPERATING REVENUES

        

Renewable energy sales

   $ 966     $ —         $ 966  

Texas pipelines service revenues

     245       (242   (a)     3  
  

 

 

   

 

 

     

 

 

 

Total operating revenues

     1,211       (242       969  
  

 

 

   

 

 

     

 

 

 

OPERATING EXPENSES

        

Operations and maintenance

     571       (44   (a)     527  

Depreciation and amortization

     430       (36   (a)     394  

Taxes other than income taxes and other

     49       (9   (a)     40  
  

 

 

   

 

 

     

 

 

 

Total operating expenses – net

     1,050       (89       961  
  

 

 

   

 

 

     

 

 

 

GAINS ON DISPOSAL OF BUSINESSES/ASSETS – NET

     36       —           36  
  

 

 

   

 

 

     

 

 

 

OPERATING INCOME

     197       (153       44  
  

 

 

   

 

 

     

 

 

 

OTHER INCOME (DEDUCTIONS)

        

Interest expense

     853       (5   (a)     848  

Equity in earnings of equity method investees

     183       (6   (a)     177  

Equity in earnings of non-economic ownership interests

     56       —           56  

Other – net

     3       2     (a)     5  
  

 

 

   

 

 

     

 

 

 

Total other income (deductions) – net

     1,095       (9       1,086  
  

 

 

   

 

 

     

 

 

 

INCOME BEFORE INCOME TAXES

     1,292       (162       1,130  

INCOME TAXES

     171       (10   (b)     161  
  

 

 

   

 

 

     

 

 

 

NET INCOME

     1,121       (152       969  

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

     (644     120     (c)     (524
  

 

 

   

 

 

     

 

 

 

NET INCOME ATTRIBUTABLE TO NEXTERA ENERGY PARTNERS, LP

   $ 477     $ (32     $ 445  
  

 

 

   

 

 

     

 

 

 

Earnings per common unit attributable to NextEra Energy Partners, LP – basic

   $ 5.62     $ (0.38     $ 5.24  

Earnings per common unit attributable to NextEra Energy Partners, LP – assuming dilution

   $ 5.62     $ (0.38     $ 5.24  

Weighted-average number of common units outstanding – basic

     84.9       —           84.9  

Weighted-average number of common units outstanding – assuming dilution

     84.9       —           84.9  

 

3


NEXTERA ENERGY PARTNERS, LP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

(millions, except per unit amounts)

 

     Year ended December 31, 2021  
     NEP
Historical
    Transaction
Accounting
Adjustments
        NEP Pro
Forma
 

OPERATING REVENUES

        

Renewable energy sales

   $ 720     $ —         $ 720  

Texas pipelines service revenues

     262       (260   (a)     2  
  

 

 

   

 

 

     

 

 

 

Total operating revenues

     982       (260       722  
  

 

 

   

 

 

     

 

 

 

OPERATING EXPENSES

        

Operations and maintenance

     419       (45   (a)     374  

Depreciation and amortization

     288       (37   (a)     251  

Taxes other than income taxes and other

     36       (8   (a)     28  
  

 

 

   

 

 

     

 

 

 

Total operating expenses – net

     743       (90       653  
  

 

 

   

 

 

     

 

 

 

LOSSES ON DISPOSAL OF BUSINESSES/ASSETS – NET

     (5     —           (5
  

 

 

   

 

 

     

 

 

 

OPERATING INCOME

     234       (170       64  
  

 

 

   

 

 

     

 

 

 

OTHER INCOME (DEDUCTIONS)

        

Interest expense

     47       3     (a)     50  

Equity in earnings of equity method investees

     160       (2   (a)     158  

Equity in earnings of non-economic ownership interests

     27       —           27  

Other – net

     4       —           4  
  

 

 

   

 

 

     

 

 

 

Total other income (deductions) – net

     238       1         239  
  

 

 

   

 

 

     

 

 

 

INCOME BEFORE INCOME TAXES

     472       (169       303  

INCOME TAXES

     48       (11   (b)     37  
  

 

 

   

 

 

     

 

 

 

NET INCOME

     424       (158       266  

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

     (287     125     (c)     (162
  

 

 

   

 

 

     

 

 

 

NET INCOME ATTRIBUTABLE TO NEXTERA ENERGY PARTNERS, LP

   $ 137     $ (33     $ 104  
  

 

 

   

 

 

     

 

 

 

Earnings per common unit attributable to NextEra Energy Partners, LP – basic

   $ 1.77     $ (0.43     $ 1.34  

Earnings per common unit attributable to NextEra Energy Partners, LP – assuming dilution

   $ 1.77     $ (0.43     $ 1.34  

Weighted-average number of common units outstanding – basic

     77.2       —           77.2  

Weighted-average number of common units outstanding – assuming dilution

     77.4       —           77.4  

 

4


NEXTERA ENERGY PARTNERS, LP

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

(millions, except per unit amounts)

 

     Year ended December 31, 2020  
     NEP
Historical
    Transaction
Accounting
Adjustments
          NEP Pro
Forma
 

OPERATING REVENUES

        

Renewable energy sales

   $ 703     $ —         $ 703  

Texas pipelines service revenues

     214       (206     (a)       8  
  

 

 

   

 

 

     

 

 

 

Total operating revenues

     917       (206       711  
  

 

 

   

 

 

     

 

 

 

OPERATING EXPENSES

        

Operations and maintenance

     363       (37     (a)       326  

Depreciation and amortization

     271       (35     (a)       236  

Taxes other than income taxes and other

     28       (9     (a)       19  
  

 

 

   

 

 

     

 

 

 

Total operating expenses – net

     662       (81       581  
  

 

 

   

 

 

     

 

 

 

LOSSES ON DISPOSAL OF BUSINESSES/ASSETS – NET

     (2     —           (2
  

 

 

   

 

 

     

 

 

 

OPERATING INCOME

     253       (125       128  
  

 

 

   

 

 

     

 

 

 

OTHER INCOME (DEDUCTIONS)

        

Interest expense

     (620     15       (a)       (605

Equity in earnings of equity method investees

     108       2       (a)       110  

Equity in losses of non-economic ownership interests

     (3     —           (3

Other – net

     5       (3     (a)       2  
  

 

 

   

 

 

     

 

 

 

Total other income (deductions) – net

     (510     14         (496
  

 

 

   

 

 

     

 

 

 

LOSS BEFORE INCOME TAXES

     (257     (111       (368

INCOME TAX BENEFIT

     (19     (5     (b)       (24
  

 

 

   

 

 

     

 

 

 

NET LOSS

     (238     (106       (344
  

 

 

   

 

 

     

 

 

 

NET INCOME ATTRIBUTABLE TO PREFERRED DISTRIBUTIONS

     (5     —           (5

NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

     188       92       (c)       280  
  

 

 

   

 

 

     

 

 

 

NET LOSS ATTRIBUTABLE TO NEXTERA ENERGY PARTNERS, LP

   $ (55   $ (14     $ (69
  

 

 

   

 

 

     

 

 

 

Loss per common unit attributable to NextEra Energy Partners, LP – basic

   $ (0.81   $ (0.21     $ (1.02

Loss per common unit attributable to NextEra Energy Partners, LP – assuming dilution

   $ (0.81   $ (0.21     $ (1.02

Weighted-average number of common units outstanding – basic

     68.4       —           68.4  

Weighted-average number of common units outstanding – assuming dilution

     68.4       —           68.4  

 

5


NEXTERA ENERGY PARTNERS, LP

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

(millions)

 

     As of September 30, 2023  
     NEP
Historical
    Transaction
Accounting
Adjustments
          NEP Pro
Forma
 

ASSETS

        

Current assets:

        

Cash and cash equivalents

   $ 332     $ 1,261       (d   $ 1,593  

Accounts receivable

     139       (17     (e     122  

Other receivables

     62       —           62  

Due from related parties

     333       (7     (e     326  

Inventory

     78       (2     (e     76  

Derivatives

     82       —           82  

Other

     96       (6     (e     90  
  

 

 

   

 

 

     

 

 

 

Total current assets

     1,122       1,229         2,351  
  

 

 

   

 

 

     

 

 

 

Other assets:

        

Property, plant and equipment – net

     15,693       (750     (e     14,943  

Intangible assets – PPAs – net

     2,029       —           2,029  

Intangible assets – customer relationships – net

     514       (514     (e     —    

Derivatives

     220       —           220  

Goodwill

     913       (83     (e     830  

Investments in equity method investees

     2,038       (148     (e     1,890  

Deferred income taxes

     232       (49     (f     183  

Other

     452       (3     (g     449  
  

 

 

   

 

 

     

 

 

 

Total other assets

     22,091       (1,547       20,544  
  

 

 

   

 

 

     

 

 

 

TOTAL ASSETS

   $ 23,213     $ (318     $ 22,895  
  

 

 

   

 

 

     

 

 

 

LIABILITIES AND EQUITY

        

Current liabilities:

        

Accounts payable and accrued expenses

   $ 280     $ (3     (e   $ 277  

Due to related parties

     66       (1     (e     65  

Current portion of long-term debt

     1,342       —           1,342  

Accrued interest

     34       —           34  

Accrued property taxes

     45       (6     (e     39  

Other

     73       (1     (e     72  
  

 

 

   

 

 

     

 

 

 

Total current liabilities

     1,840       (11       1,829  
  

 

 

   

 

 

     

 

 

 

Other liabilities and deferred credits:

        

Long-term debt

     5,139       (376     (g     4,763  

Asset retirement obligations

     327       —           327  

Due to related parties

     54       —           54  

Intangible liabilities – PPAs – net

     1,232       —           1,232  

Other

     211       (2     (e     209  
  

 

 

   

 

 

     

 

 

 

Total other liabilities and deferred credits

     6,963       (378       6,585  
  

 

 

   

 

 

     

 

 

 

TOTAL LIABILITIES

     8,803       (389       8,414  
  

 

 

   

 

 

     

 

 

 

COMMITMENTS AND CONTINGENCIES

        

EQUITY

        

Common units (93.4 units issued and outstanding)

     3,540       148       (h     3,688  

Accumulated other comprehensive loss

     (7     —           (7

Noncontrolling interests

     10,877       (77     (i     10,800  
  

 

 

   

 

 

     

 

 

 

TOTAL EQUITY

     14,410       71         14,481  
  

 

 

   

 

 

     

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 23,213     $ (318     $ 22,895  
  

 

 

   

 

 

     

 

 

 

 

6


Notes to Pro Forma Financial Statements

Transaction Accounting 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 transaction accounting adjustments. A general description of these transactions and adjustments is provided as follows:

(a) Reflects the removal of operating revenues, operations and maintenance expenses, depreciation and amortization, taxes other than income taxes and other, interest expense, equity in earnings of equity method investees and other income and deductions associated with the activities of the Texas pipelines.

(b) Reflects the removal of income taxes associated with the Texas pipelines based on the statutory rate.

(c) Reflects adjustments to net income attributable to noncontrolling interests based on the allocation of the transaction accounting adjustments.

(d) Reflects estimated net cash consideration from the sale of the Texas pipelines including $1,815 million of cash consideration less approximately $376 million to pay off project-related debt, offset by $3 million in associated interest rate swaps, and $201 million relating to the final buyout of the remaining membership interests in South Texas Midstream, LLC (STX Midstream), partly offset by $22 million of working capital adjustments, net of $2 million of cash at the Texas pipelines, based on balances as of September 30, 2023.

(e) Reflects the removal of assets and liabilities associated with the Texas pipelines.

(f) Reflects NEP’s share of income taxes related to the sale of the Texas pipelines based on the statutory rate.

(g) Reflects the payoff of outstanding borrowings at September 30, 2023 under the South Texas Midstream Holdings, LLC credit facility and associated interest rate swaps.

(h) Reflects NEP’s portion of the estimated after-tax gain that would have been recorded if the sale of the Texas pipelines closed on September 30, 2023.

(i) Reflects the noncontrolling interests of STX Midstream of approximately $207 million which NEP bought out in October 2023 for $201 million and noncontrolling interests relating to a 10% owner in one of the Texas pipelines of $78 million, partly offset by a noncontrolling interest’s portion of the gain that would have been recorded if the sale of the Texas pipelines closed on September 30, 2023 of $208 million.

 

7