NextEra Energy Partners
NextEra Energy Partners (NEP) is the yieldco sponsored by NextEra Energy (NEE). Note that NEP’s results are consolidated with NEER. However, we’re discussing them separately because NEP is traded publicly, and its operations are segregated. For more information on yieldcos and NEP, you can read Market Realist’s series, Green Yieldcos: A Primer on Tax-Efficient Investing. NRG Energy (NRG) is another power utility (XLU) that sponsors a yieldco.
3Q15 operating performance
NEP generated $103 million in revenues in 3Q15 compared to $97 million in 3Q14. The company sells electricity through long-term power purchase agreements. Since the majority of NEP’s asset base consists of wind power, operating expenses were limited to $22 million, or 21.4% of sales. Adjusted EBITDA came in at $99 million while cash available for distribution (or CAFD) came in at $15 million. The company raised its quarterly dividend to $0.27 a share, resulting in an annual rate of $1.08 a share.
NEP’s 2015 expectations remained unchanged at adjusted EBITDA of $400 million to $440 million and CAFD of $100 million to $120 million. The company expects to raise the distribution level to $1.23 a share by the end of 2015.
For 2016, NEP expects adjusted EBITDA of $540 million to $580 million and CAFD of $190 million to $220 million. For 2017, the company expects adjusted EBITDA and CAFD to scale even higher backed by investments.
Overall, the company expects distributions to grow at 12%-15% annually until 2020.