Xplr Infrastructure, Lp · NYSE:XIFR
Xplr Infrastructure, Lp — NextEra Energy Partners — Investor Presentation (May 2017)
32 slides from Xplr Infrastructure, Lp's investor presentation, May 2017
Slide 1: NextEra Energy Partners, LP May 2017 Investor Presentation
NextEra Energy Partners, LP May 2017 Investor Presentation
Slide 2: Cautionary Statements And Risk Factors That May Affect Future Results
Cautionary Statements And Risk Factors That May Affect Future Results This presentation includes forward-looking statements within the meaning of the federal securities laws. Actual results could differ materially from such forward- looking statements. The factors that could cause actual results to
Slide 3: Table of Contents
Table of Contents • Introduction/Overview Slide 4 • Drivers for Renewables Slide 13 • Capital Structure Slide 15 • Financial Review Slide 19 • Appendix Slide 20 3
Slide 4: NEP Investment Highlights
We believe NEP is a premier distribution growth company NEP Investment Highlights High-Quality Portfolio Financial Strength and Flexibility ~3 GW 18-Yr A3 Renewables >90% ~2.8x ~1.3x Capacity(3) of Project Debt Remaining Counterparty HoldCo Coverage & Tax Equity Contract Life(1) Credit(1,2) ~4 Bcf I
Slide 5: NEP Asset Portfolio
The NEP portfolio is diversified by geography and asset mix NEP Asset Portfolio(1,2) • Wind assets: – 18 projects – ~2,595 MW • Solar assets: – 5 projects – ~442 MW • Pipeline assets: – Seven natural gas pipelines – ~542 miles – ~3 Bcf of contracted and ~4 Bcf total capacity 1) As of May 1, 2017 2)
Slide 6: Accretive acquisitions have supported significant growth in LP distributions
Accretive acquisitions funded by access to both equity and debt have supported significant growth in LP distributions Annualized LP Distributions(1) $1.46 $0.75 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 1) Annualized basis; refer to distributions payable
Slide 7: NEP Organizational Structure
NEP is a growth-oriented limited partnership with many structural attributes that create value for LP holders NEP Organizational Structure NEE • OpCo Ownership ~100% Economic ~65% Economic – Public investors own economic Interest in NEP Interest in OpCo(1) interest in OpCo through 100% Public GP and
Slide 8: NEP's Structural Tax Advantages
NEP’s structure creates tax advantages similar to MLPs NEP’s Structural Tax Advantages • NEP is not expected to pay meaningful U.S. federal income tax for at least fifteen years – Existing NOLs and NOLs generated through MACRS depreciation of its acquisitions may be used to offset taxable income • N
Slide 9: Total Shareholder Return: NEP vs. Indices
Since the IPO, NextEra Energy Partners has delivered total unitholder return of 53% Total Shareholder Return NextEra Energy Partners vs. Indices 60% 53% 50% 40% 34% 31% 30% 20% 10% 0% Yieldco NEP (1) S&P 500 S&P 500 Utilities Index Average(2) -10% -20% -14% 1) Reflects total shareholder return, assu
Slide 10: Total Shareholder Return: NEP vs. Yieldcos
Over time, we have seen increasing differentiation among Yieldcos Total Shareholder Return(1) NextEra Energy Partners vs. Yieldcos 60% 53% 50% 40% 30% 29% 20% 10% 0% Yieldco B NEP Yieldco A Yieldco C Yieldco D Yieldco E -10% -5% -20% -20% -30% -28% -40% -50% -46% 1) Reflects total shareholder return
Slide 11: Acquiring assets from Energy Resources is one avenue of growth
Acquiring assets from Energy Resources is one potential avenue of growth for NEP NextEra Energy Resources Development Skills Wind and Solar Portfolio(1) 20,000 Customer Wind Relationships 15,000 Engineering/ MW Solar Construction Regulatory 10,000 Management 5,000 0 2002 2004 2006 2008 2010 2012 201
Slide 12: Third-Party Growth Opportunities – Peer Trading Yields
Third party M&A is another avenue of potential growth for NEP Third-Party Growth Opportunities – Peer Trading Yields(1,2) 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% NEP NEP has demonstrated its ability to execute on third-party acquisitions like the Texas Pipelines and will continue to e
Slide 13: Drivers for Renewables
Renewables development opportunities have never been stronger Drivers for Renewables • Extension and phase down of U.S. Federal Tax incentives for renewables • Improvements in wind and solar technology and declining cost trends • Evaluating repowering opportunities across our fleet • State regulator
Slide 14: U.S. Federal tax incentives extended into the next decade
U.S. Federal tax incentives for completed renewables projects have been extended into the next decade Extended U.S. Federal Tax Credits Wind Production Solar Investment Tax Credit (PTC) Tax Credit (ITC) Start of Start of Construction COD Wind Construction Solar Date Deadline PTC Date ITC During 2016
Slide 15: PAYGO Tax Equity Financing
NEP’s tax shield creates the need to employ tax equity financing for projects that generate a large portion of their economics from tax credits PAYGO Tax Equity Financing • Tax equity financing is used Project Cash Flow Split(1) to monetize tax attributes • Under tax equity, an investor 8%-12% makes
Slide 16: Financing Alternatives
In addition to the IDR modification, we continue to analyze and evaluate new opportunities for financings Financing Alternatives New Opportunities High-Yield Term Loan B Debt Revolving Convertible Credit Debt Facility Optimal Capital Structure for Distribution Growth Convertible PAYGO Preferred Tax
Slide 17: NEP IDR Fee Modification
NextEra Energy and NextEra Energy Partners announced a structural modification to IDR fees NEP IDR Fee Modification • Based on NEP’s fourth quarter 2016 distribution to current LP unitholders at an annualized rate of $1.41(1) per unit, IDR fees are roughly $56 million per year • From this point forw
Slide 18: IDR Fee Modification Waterfall
With the IDR fee modification, future NEP acquisitions are more accretive to LP unitholders NEP IDR Fee Modification Original IDR Fee Waterfall Modified IDR Fee Waterfall Cash Available For Distribution = $4.00/Unit(1) LP IDR Fee LP IDR Fee $1.125 First $1.20/unit $0.075 $1.41 First $1.41/unit $0.00
Slide 19: NEP expected to grow LP distributions 12–15% annually
Our current expectations are for NEP to grow LP distributions by 12 – 15% annually through at least 2022 NextEra Energy Partners’ Expectations 12/31/2017 Run Rate Long-Term Distribution Expectations(1,2) per Unit Growth Outlook(3) Annual 12% - 15% Growth(4) Adjusted $875 - $975 MM EBITDA $1.58-$1.62
Slide 20: Appendix
20 Appendix NexTera energy” PARTNERS 7
Slide 21: NextEra Energy's Long-Term Adjusted EPS Expectations
We have extended NextEra Energy’s financial expectations by two years, through 2020 NextEra Energy’s Long-Term Adjusted Earnings Per Share Expectations(1) Expected 6 – 8% • CAGR of 6 – 8% through 2020, off a 2016 base • Expectations reflect the overall strength and diversity of our growth prospects
Slide 22: Expected Cash Available for Distribution
Expected Cash Available for Distribution(1) (December 31, 2017 Run Rate CAFD) $960-$1,060 ($15-$25) ($60-$70) $875-$975 ($290-$320) ($240-$280) $ MM ($30-$35) ($3-$8) $310-$340 (2) (3) (4) (5) 1) See Appendix for definition of Adjusted EBITDA and CAFD expectations. Project-Level Adjusted EBITDA repr
Slide 23: Adjusted EBITDA to CAFD
Similar to MLPs, distributions to NEP’s LP unitholders are paid from cash available for distribution (CAFD), which is derived from the following calculation Adjusted EBITDA to CAFD(1) Adjusted EBITDA Includes pre-tax PTCs earned by NEP and PTCs allocated to tax equity investors - Debt Service Amorti
Slide 24: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA and CAFD Expectations This presentation refers to adjusted EBITDA and CAFD expectations. NEP’s adjusted EBITDA expectations represent projected (a) revenue less (b) fuel expense, less (c) project operating expenses, less (d) corpo
Slide 25: Cautionary Statement And Risk Factors
Cautionary Statement And Risk Factors That May Affect Future Results This presentation contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra
Slide 26: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) 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 entit
Slide 27: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP faces substantial competition primarily from regulated utilities, developers, independent power producers, pension funds and private equity funds for opportunities in North America; The natural gas pipeline industry is
Slide 28: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Reimbursements and fees owed to NEP GP and its affiliates for services provided to NEP or on NEP's behalf will reduce cash distributions to or from NEP OpCo and from NEP to NEP's unitholders, and the amount and timing of su
Slide 29: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings Expectations This presentation refers to adjusted earnings per share expectations. Adjusted earnings expectations exclude the unrealized mark-to-market effect of non-qualifying hedges, net OTTI losses on securities held in NextEra Energ
Slide 30: Cautionary Statement And Risk Factors
Cautionary Statement And Risk Factors That May Affect Future Results This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, bu
Slide 31: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) a prolonged period of low gas and oil prices could impact NextEra Energy Resources’ gas infrastructure business and cause NextEra Energy Resources to delay or cancel certain gas infrastructure projects and for certain exist
Slide 32: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP’s inability to access sources of capital on commercially reasonable terms could have an effect on its ability to consummate future acquisitions and on the value of NextEra Energy’s limited partner interest in NextEra En
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