Xplr Infrastructure, Lp · NYSE:XIFR
Xplr Infrastructure, Lp — NextEra Energy Partners — Wolfe Research 2017 Power & Gas Leaders Conference
25 slides from Xplr Infrastructure, Lp's conference presentation, Sep 26, 2017
Slide 1: Wolfe Research 2017 Power & Gas Leaders Conference
Wolfe Research 2017 Power & Gas Leaders Conference John Ketchum Chief Financial Officer September 26, 2017
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: NextEra Energy Partners is a best-in-class diversified clean energy growth company
NextEra Energy Partners is a best-in-class diversified clean energy growth company NextEra Energy Partners’ Portfolio(1) • Stable cash flows supported by: – Long-term contracts with credit- worthy counterparties – Geographic and asset diversity • ~3,000 MW of renewables – ~2,600 MW wind – ~400 MW so
Slide 4: Since the IPO, NEP has grown distributions by more than 100% and delivered total unitholder return of 85%
Since the IPO, NEP has grown distributions by more than 100% and delivered total unitholder return of 85% Annualized Total Unitholder Return LP Distributions(1) NEP vs. Indices $1.52 100% 90% 85% 80% 70% 60% 50% 40% 40% 33% 30% $0.75 20% 10% 0% -10% NEP (2) S&P 500 S&P 500 Utilities Index 1) Annuali
Slide 5: NEP's value proposition is built upon four core strengths
NEP’s value proposition is built upon four core strengths NextEra Energy Partners’ Core Strengths High-Quality Portfolio Financial Strength and Flexibility Issuer Credit ~3 GW Rating(3) Year-end 2017E 18-Yr A3 Renewables >90% Ba1/BB/BB+ Remaining Counterparty Capacity of Project Debt ~1.2x & Tax Equ
Slide 6: Acquisitions from Energy Resources, organic growth and third party M&A all provide clear visibility to future growth
Acquisitions from Energy Resources, organic growth and third party M&A all provide NEP with clear visibility to future growth Growth Opportunities Potential Acquisition of Potential Organic Clean Energy Potential for 3rd Prospects for Assets at Energy Party Texas Pipelines Resources, Acquisitions an
Slide 7: Existing Energy Resources' portfolio could provide one path to 12% - 15% growth per year through 2022
Existing Energy Resources’ portfolio alone could provide one potential path to 12% - 15% growth per year through 2022 Energy Resources’ Renewable Portfolio Since NEP’s IPO GW 14 ~5 GW ~13 GW 12 ~10 GW ~2 GW 10 8 6 4 2 - (1) Renewables Portfolio MW Sold to NEP MW Placed Current Portfolio after IPO si
Slide 8: Demand for both wind and solar energy is expected to be robust through the end of the decade
Demand for both wind and solar energy is expected to be robust through the end of the decade Industry Estimates of Wind & Solar Market Potential 2017 - 2020(1) Wind Additions Solar Additions 45 45 40 40 37 Avg: 36 GW 40 35 35 32 35 30 30 25 26 GW 25 GW 25 24 Avg: 22 GW 20 20 15 15 13 10 10 5 5 0 0 B
Slide 9: The all-in cost of wind and solar will continue to compete with existing generation resources
The all-in cost of wind and solar will continue to compete with existing generation resources as tax credits phase down Estimated Costs of Generation Resources Post – 2020(1) (cents/kWh) 4 - 5¢ w/ storage adder 4 - 5¢ 3.5 - 5¢ 3 - 4¢ w/ storage adder 3 - 4¢ 3 - 4¢ 2 - 3¢ (2) (2) New Wind New Solar N
Slide 10: NEP is exploring organic growth opportunities in pipeline expansion and repowerings
NEP is exploring organic growth opportunities in the form of potential pipeline expansion and repowerings Organic Growth Opportunities Texas Pipelines Expansion ($MM) • NEP is exploring expansion $190-$210 growth opportunities at the TX pipelines – $300 MM - $350 MM investment $145-$155 at ~6x Adjus
Slide 11: There is a large addressable renewables market in which NEP can compete
There is a large addressable renewables market in which NEP can compete Third-Party Opportunities Potential Addressable Market (1) Yieldcos & MLP Trading Yields(2,3) ~$1,570 B NEP trades at a competitive yield Total Midstream Market compared to other Yieldcos and high growth MLPs ~31% ~$480 B MLPs ~
Slide 12: We have implemented certain governance changes at NEP to enhance LP unitholder rights
We have implemented certain governance changes at NEP in order to enhance LP unitholder rights Enhancing Unitholder Governance Rights Prior Structure New Structure • BOD at NEP GP • New BOD at NEP LP Board of • Three Directors appointed by GP (NEE) Directors • NEE appointed all Directors • • Four Di
Slide 13: NEP's credit ratings increase financing flexibility and debt capacity
NEP’s credit ratings increase financing flexibility and debt capacity due to greater market access Corporate Credit Rating and Debt Capacity • NEP corporate credit ratings: High-Yield Term Loan B Moody’s S&P Fitch Debt Revolving Credit Ba1 BB BB+ Convertible Facility Stable Stable Stable Preferred O
Slide 14: In June 2017, NEP announced an agreement to issue $550 MM of convertible preferred securities
In June 2017, NEP announced an agreement to issue $550 MM of convertible preferred securities Convertible Preferred Offering(1) • NEP’s 4.50% coupon is the Coupon at Issuance(2) lowest ever for a preferred security in the MLP or Yieldco 10.75% sector 9.5% 10.0% • Provides a low cash cost of 8.0% 8.0
Slide 15: NEP has issued $300 MM of convertible debt and entered into a capped call transaction
NEP has issued $300 MM of convertible debt and entered into a capped call transaction in connection with the offering Convertible Debt/Capped Call Transaction • Low 1.5% coupon for 3 years Impact of NEP Unit Price • Initial conversion rate At Conversion(1) represents a 25% premium $65 Cap Price ~$63
Slide 16: NEP has further de-risked LP distributions by refinancing its HoldCo debt
NEP has further de-risked LP distributions by refinancing its existing ~$1.1 B HoldCo debt balance at attractive rates and pushing its maturity into the middle of the next decade NEP HoldCo Debt Refinancing • NEP refinanced its ~$1.1 B NEP HoldCo Debt Maturity Profile HoldCo debt balance with $ MM s
Slide 17: NEP offers a superior value proposition and is better positioned than ever
We believe NEP offers a superior value proposition and is better positioned than ever to deliver upon the expectations that we have shared Investor Total Return Potential • Opportunity to earn a total return of ~4% 16% - 19% roughly 16% - 19% per year through at least 2022 12% - 15% • Diversified po
Slide 18: Appendix
18 Appendix NexTera energy” PARTNERS 2
Slide 19: NExTera energy”
NExTera energy” PARTNERS Z
Slide 20: NEP is on-track to meet its 2017 run-rate Adjusted EBITDA and CAFD expectations
NEP is on-track to meet its 2017 run-rate Adjusted EBITDA and CAFD expectations 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) Project-Level Adjusted E
Slide 21: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA and CAFD Expectations This presentation refers to adjusted EBITDA, CAFD, and project-level CAFD expectations. NEP’s adjusted EBITDA expectations represent projected (a) revenue less (b) fuel expense, less (c) project operating exp
Slide 22: Cautionary Statement And Risk Factors That May Affect Future Results
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 23: Cautionary Statement And Risk Factors That May Affect Future Results (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) 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 adve
Slide 24: Cautionary Statement And Risk Factors That May Affect Future Results (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The natural gas pipeline industry is highly competitive, and increased competitive pressure could adversely affect NEP's business; NEP may not be able to access sources of capital on commercially reasonable terms, which wou
Slide 25: Cautionary Statement And Risk Factors That May Affect Future Results (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Holders of NEP's common 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 assig
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