NEXTERA ENERGY PARTNERS, LP (NEP)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 results were solid: net income attributable to NEP was $70M and EPS was $0.75 vs. a loss of $(0.17) in Q1 2023; operating revenues rose to $257M from $245M; Adjusted EBITDA was $462M and CAFD was $164M .
• Guidance reaffirmed: 5%–8% LP distribution growth with a 6% target through at least 2026, payout ratio mid-90s, no acquisition needed in 2024, and no growth equity until 2027; YE 2024 run‑rate expectations remain Adjusted EBITDA $1.9–$2.1B and CAFD $730–$820M; expected annualized Q4’24 distribution $3.73/unit (payable Feb 2025) .
• Operational drivers: new projects (+$32M EBITDA, +$7M CAFD) and IDR fee suspension (+$39M EBITDA/CAFD) offset weaker wind resource (97% of LTA vs. 102% last year; −$37M EBITDA) and the Texas pipeline divestiture (−$44M EBITDA; −$38M CAFD) .
• Strategic updates: announced another ~100 MW of wind repowers (bringing announced to ~1,085 MW toward a ~1.3 GW target) and declared a $0.8925 quarterly distribution (+6% YoY annualized) .

What Went Well and What Went Wrong

What Went Well

• Reaffirmed distribution growth and run-rate outlook with no 2024 acquisitions required and no growth equity until 2027; management reiterated expected annualized Q4’24 distribution of $3.73/unit .
• Positive cash metrics: Q1 2024 Adjusted EBITDA of $462M (up vs. $447M in Q1 2023) and CAFD of $164M (vs. $156M in Q1 2023) .
• Strategic repowers: announced an additional ~100 MW of wind repowers, bringing announced repowers to ~1,085 MW through 2026, advancing toward the ~1.3 GW target .
  • Quote (Ketchum): “NextEra Energy Partners…does not expect to need an acquisition this year to achieve a 6% targeted growth rate; and…does not expect to require growth equity until 2027.”

What Went Wrong

• Wind resource headwind: existing projects’ Adjusted EBITDA declined ~$37M YoY; wind resource ~97% of LTA vs. ~102% in Q1 2023; Genesis Solar had a planned outage .
• Portfolio mix impact: Texas pipeline divestiture reduced Adjusted EBITDA by ~$44M and CAFD by ~$38M in the quarter .
• Mix shift challenges: wind origination has been comparatively softer vs. strong solar/storage, requiring careful return management across technologies (management still expects attractive returns and overall backlog execution) .

Financial Results

Headline P&L and Cash Metrics – Quarter-over-Quarter Trend

Year-over-Year – Q1 2024 vs Q1 2023

Q1 2024 Adjusted EBITDA/CAFD YoY Bridge (Selected Drivers)

Distributions

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “NextEra Energy Partners…does not expect to need an acquisition this year to achieve a 6% targeted growth rate; and…does not expect to require growth equity until 2027.”
• “First quarter adjusted EBITDA was $462 million and cash available for distribution was $164 million.”
• “NextEra Energy Partners expects run rate contributions…at Dec. 31, 2024, to be in the range of $1.9 billion to $2.1 billion and $730 million to $820 million, respectively.”
• On trade risk: “We expect that any trade actions…will be very manageable…we don’t expect any…to result in delivery stoppages…U.S. domestic solar panel industry is…stronger…capacity…about 50 GW by 2026.”
• On data centers: “We see about a 15% CAGR through the end of the decade for data center demand…nobody is better positioned to capitalize…than NextEra.”

Q&A Highlights

• Solar trade policy risk: Management expects potential AD/CVD actions to be manageable with no delivery stoppages; diversified suppliers, contractual protections, and growing domestic capacity reduce risk; minimal exposure to bifacial exemption removal through Feb 2026 .
• Data center demand/returns: Significant multi-year opportunity; deep relationships with hyperscalers; renewables + storage and siting tools are differentiators; management remains skeptical on near-term SMR timing for load needs .
• NEP financing alternatives: Private capital raises under evaluation to address longer-dated CEPFs; update timing uncertain; operational plan supports distribution growth without acquisitions in 2024 .
• Mix/returns: Solar/storage strong; wind softer near term but still attractive in certain regions; returns mid-teens for solar and >20% for wind/storage targeted .
• Tax credit transferability: Agreement to transfer ~$1B in 2024; part of diversified funding tools .

Estimates Context

• S&P Global consensus for Q1 2024 EPS and revenue was unavailable via our data connector for NEP; therefore, we cannot determine a quantitative beat/miss vs. Street for this quarter. If needed, we can supplement with external estimate sources, but per process we anchor on S&P Global for consistency [SpgiEstimatesError indicating missing mapping].

Key Takeaways for Investors

• Distribution outlook intact: 6% target growth through at least 2026 with a mid-90s payout ratio, no 2024 acquisitions required, and no growth equity until 2027; run-rate guidance reaffirmed (Adjusted EBITDA $1.9–$2.1B; CAFD $730–$820M) .
• Cash generation resilience: Q1 Adjusted EBITDA/CAFD improved YoY despite wind resource and divestiture headwinds, supported by IDR fee suspension and new projects .
• Repowers as organic growth lever: Another ~100 MW announced (~1,085 MW now identified) supports distribution growth and attractive CAFD yields through 2026 .
• Manageable policy risk: Management expects potential solar trade actions to be navigable with diversified supply and rising U.S. capacity; minimal exposure to bifacial exemption removal .
• Structural demand themes supportive: Strong data center and broad industrial electrification demand underpin multi‑year renewables/storage origination; NEP benefits via dropdown-eligible and third‑party asset opportunities at attractive yields .
• Watch wind resource normalization: Wind resource was 97% of LTA in Q1; normalization would reduce headwinds to existing asset performance .
• Funding flexibility: Tax credit transferability (~$1B 2024 transfers) augments project finance and tax equity to support growth without near-term equity issuance at NEP .