Net income attributable to NextEra Energy Partners of $5 million. NextEra Energy Partners also reported first-quarter 2016 adjusted EBITDA of $141 million. For the first quarter of 2016, cash available for distribution (CAFD) before debt service payments was $112 million and after debt service payments was $38 million, slightly better than management's expectations. Principal payments during the quarter, along with interest payments, reflect timing of semi-annual debt service for some projects.
NextEra Energy Partners' management uses adjusted EBITDA and CAFD, which are non-GAAP financial measures, internally for financial planning, analysis of performance and reporting of results to the board of directors of its general partner. NextEra Energy Partners also uses these measures when communicating its financial results and earnings outlook to analysts and investors. The attachments to this news release include a reconciliation of historical adjusted EBITDA and CAFD to net income, which is the most directly comparable GAAP measure.
"NextEra Energy Partners' strong first-quarter financial results reflect the substantial growth we've had in the portfolio over the last year, as well as excellent operating performance during the quarter," said Jim Robo, chairman and chief executive officer. "Since the partnership�s IPO in mid-2014, we have more than doubled the size of the portfolio, and, during the quarter, we added approximately 300 megawatts of contracted renewable energy projects through the acquisition of the Seiling I & II Wind Energy Centers from our sponsor, NextEra Energy Resources. This acquisition is yet another example of the strong and highly visible runway for future growth that we believe is core to the NextEra Energy Partners value proposition. We also successfully prefunded the majority of the financing needed for the acquisition of the Seiling I & II Wind Energy Centers through a registered underwritten equity issuance. With this acquisition, NextEra Energy Partners has significant flexibility for the balance of the year and remains well-positioned to achieve our distribution per unit growth expectations. We continue to view NextEra Energy Partners as the premier YieldCo in our industry with a best-in-class sponsor, an average contract life of 19 years and, on average, a strong investment-grade counterparty credit rating."
During the quarter, NextEra Energy Partners completed its previously announced acquisition of the Seiling I & II Wind Energy Centers, a combined 299.2-megawatt (MW) wind generation site in Dewey and Woodward counties, Okla., from a subsidiary of its sponsor, NextEra Energy Resources, LLC. The acquisition of these assets expanded NextEra Energy Partners' portfolio of contracted renewable energy projects to approximately 2,509 MW.
NextEra Energy Partners acquired the assets for a total consideration of approximately $323 million, plus $3 million of working capital (subject to post-closing adjustments), and the assumption of approximately $257 million in liabilities associated with the tax equity financing.
Concurrent with the announcement of the acquisition, NextEra Energy Partners sold to Morgan Stanley, as the underwriter, 9,700,000 newly issued common units representing limited partner interests in NextEra Energy Partners, subject to customary conditions. The full block of issued shares was purchased by the underwriter at the time of issuance. The underwriter also purchased the full over-allotment from NextEra Energy Partners of 1,455,000 additional common units. Total net proceeds from the offering were approximately $287 million.
The partnership used the net proceeds of the registered underwritten offering to fund the majority of the purchase price for the acquisition of the Seiling I & II Wind Energy Centers. The remainder of the purchase price was funded through a draw under a subsidiary of NextEra Energy Partners' revolving credit facility.
Increases quarterly distribution
On April 27, 2016, the board of directors of the general partner of NextEra Energy Partners declared a quarterly distribution of $0.31875 per common unit (corresponding to an annualized rate of $1.275 per common unit) to the unitholders of NextEra Energy Partners. The distribution increased approximately 55 percent on an annualized basis from the first quarter of 2015. The distribution will be payable on May 13, 2016, to unitholders of record as of May 6, 2016.
Outlook
From a base of its fourth-quarter 2015 distribution per common unit at an annualized rate of $1.23, NextEra Energy Partners continues to expect 12 to 15 percent per year growth in limited partner distributions through 2020. The partnership expects the annualized rate of the fourth-quarter 2016 distribution, which is payable in February 2017, to be in the range of $1.38 to $1.41 per common unit.
NextEra Energy Partners continues to expect a Dec. 31, 2016, run rate for adjusted EBITDA of $640 million to $760 million and CAFD of $210 million to $290 million, reflecting calendar year 2017 expectations for the forecasted portfolio at year-end Dec. 31, 2016. These expectations are net of expected IDR fees, as these fees are expected to be treated as an operating expense.
Adjusted EBITDA, CAFD and limited partner distribution expectations assume, among other things, normal weather and operating conditions, public policy support for wind and solar development and construction, market demand and transmission expansion support for wind and solar development, market demand for pipeline capacity and access to capital at reasonable cost and terms. Please see the accompanying cautionary statements for a list of the risk factors that may affect future results. Adjusted EBITDA and CAFD do not represent substitutes for net income, as prepared in accordance with GAAP. The adjusted EBITDA and CAFD run rate expectations have not been reconciled to GAAP net income because NextEra Energy Partners did not prepare estimates of the effect of the acquisitions on certain GAAP line items that would be necessary to provide a forward-looking estimate of GAAP net income, and the information necessary to provide such a forward-looking estimate is not available without unreasonable effort.
