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(a)	Third party investors own noncontrolling Class B interests in the NEP subsidiaries that own these projects. See Note 2 - Noncontrolling Interests and Note 11 - Equity.

(b)	NEP owns these wind projects together with third-party investors with differential membership interests. See Note 2 - Noncontrolling Interests and Note 10.

(c)	These projects are encumbered by liens against their assets securing various financings.

(d)	NEP has indirect approximately 50% equity method investments in Desert Sunlight and Rosmar and an indirect controlling 50% interest in Silver State South. See Note 2 - Investments in Unconsolidated Entities and Noncontrolling Interests.

(e)	MWs reflect NEP's net ownership interest in plant capacity based on respective ownership interests as discussed in (d).

(f)	In addition, NEP owns an approximately 50% non-economic ownership interest in three NEER solar projects with a total generating capacity of 277 MW. All equity in earnings of these non-economic ownership interests is allocated to net income attributable to noncontrolling interests. See Note 2 - Investments in Unconsolidated Entities.

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(a)	NEP's ownership interests in the pipelines are pledged as collateral securing various financings. Additionally, third party investors own noncontrolling Class B interests in the respective NEP subsidiaries that have ownership interests in these pipelines. See Note 2 - Noncontrolling Interests and Note 11 - Equity.

(b)	Reflects NEP's net ownership interest in pipeline capacity based on respective ownership interests as discussed in (c) and (d).

(c)	A subsidiary of Pemex owns a 10% interest in the NET Mexico pipeline.

(d)

Through its ownership interest in Meade Pipeline Co, LLC, NEP has an indirect equity method investment in the Central Penn Line (CPL), which represents an approximately 39% aggregate ownership interest in the CPL, and a 40% interest in an expansion project that is expected to add an estimated 0.2 Bcf per day of natural gas capacity through the addition of compression at new and existing stations scheduled for commercial operation by mid-2022, subject to receipt of certain regulatory approvals. See Note 3.

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(a)	Project must be placed in service no more than four years after the year in which construction of the project began to qualify for the PTC or ITC.

(b)	Percentage of the full PTC available for wind projects that begin construction during the applicable year.

(c)	Percentage of eligible project costs that can be claimed as ITC by wind projects that begin construction during the applicable year.

(d)	Percentage of eligible project costs that can be claimed as ITC by solar projects that begin construction during the applicable year. ITC is limited to 10% for solar projects not placed in service before January 1, 2024.

•	Focus on contracted clean energy projects. NEP intends to focus on long-term contracted clean energy projects with newer and more reliable technology, lower operating costs and relatively stable cash flows, subject to seasonal variances, consistent with the characteristics of its portfolio.

•	Focus on North America. NEP intends to focus its investments in North America, where it believes industry trends present significant opportunities to acquire contracted clean energy projects in diverse regions and favorable locations. By focusing on North America, NEP believes it will be able to take advantage of NEE’s long-standing industry relationships, knowledge and experience.

•

Maintain a sound capital structure and financial flexibility. NEP and its subsidiaries have various financing structures in place including limited-recourse project-level financings, the sale of differential membership interests and equity interests in certain subsidiaries, preferred units, convertible senior unsecured notes and senior unsecured notes, as well as revolving credit facilities and term loans. NEP believes its cash flow profile, its credit rating, the long-term nature of its contracts and its ability to raise capital provide flexibility for optimizing its capital structure and increasing distributions. NEP intends to continually evaluate opportunities to finance future acquisitions or refinance its existing debt and seeks to limit recourse, optimize leverage, hedge exposure, extend maturities and increase cash distributions to common unitholders over the long term.

•

Take advantage of NEER’s operational excellence to maintain the value of the projects in NEP's portfolio. At the direction of the board, NEER provides O&M, administrative and management services to NEP's projects pursuant to the MSA and other agreements. Through these agreements, NEP benefits from the operational expertise that NEER currently provides across its entire portfolio. NEP expects that these services will maximize the operational efficiencies of its portfolio.

•

Grow NEP's business and cash distributions through selective acquisitions of operating projects or projects under construction. NEP intends to grow primarily through the acquisition of projects that have similar characteristics to the renewable energy projects and pipelines in its portfolio. NEP intends to focus on acquiring projects in operation, maintaining a disciplined investment approach and taking advantage of opportunities to acquire additional projects from NEER and third parties in the future, which it believes will enable it to increase cash distributions to its common unitholders over the long term.

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•	the FERC, which oversees the acquisition and disposition of generation, transmission and other facilities, transmission of electricity and natural gas in interstate commerce and wholesale purchases and sales of electric energy, among other things;

•	the NERC, which, through its regional entities, establishes and enforces mandatory reliability standards, subject to approval by the FERC, to ensure the reliability of the U.S. electric transmission and generation system and to prevent major system blackouts;

•	the Environmental Protection Agency (EPA), which has the responsibility to maintain and enforce national standards under a variety of environmental laws. The EPA also works with industries and all levels of government, including federal and state governments, in a wide variety of voluntary pollution prevention programs and energy conservation efforts;

•	various agencies in Texas and Pennsylvania, which oversee safety, environmental and certain aspects of rates and transportation related to the pipeline projects; and

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•	the Pipeline and Hazardous Materials Safety Administration and the Texas Railroad Commission's Pipeline Safety Division, which, among other things, oversee the safety of natural gas pipelines.

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•	breakdown or failure of, or damage to, turbines, blades, blade attachments, solar panels, mirrors and other equipment, which could reduce a project’s energy output or result in personal injury or loss of life;

•	catastrophic events, such as fires, earthquakes, severe weather, tornadoes, ice or hail storms, other meteorological conditions, landslides and other similar events beyond NEP's control, which could severely damage or destroy all or a part of a project, reduce its energy output or result in personal injury or loss of life;

•	technical performance below expected levels, including, but not limited to, the failure of wind turbines, solar panels, mirrors and other equipment to produce energy as expected due to incorrect measures of expected performance provided by equipment suppliers;

•	increases in the cost of operating the projects, including, but not limited to, costs relating to labor, equipment, insurance and real estate taxes;

•	operator or contractor error or failure to perform;

•	serial design or manufacturing defects, which may not be covered by warranty;

•	extended events, including, but not limited to, force majeure, under certain PPAs that may give rise to a termination right of the customer under such a PPA (renewable energy counterparty);

•	failure to comply with permits and the inability to renew or replace permits that have expired or terminated;

•	the inability to operate within limitations that may be imposed by current or future governmental permits;

•	replacements for failed equipment, which may need to meet new interconnection standards or require system impact studies and compliance that may be difficult or expensive to achieve;

•	land use, environmental or other regulatory requirements;

•	disputes with the BLM, other owners of land on which NEP's projects are located or adjacent landowners;

•	changes in law, including, but not limited to, changes in governmental permit requirements, corporate income tax laws, regulations and policies and international trade laws, regulations, agreements, treaties and policies;

•	government or utility exercise of eminent domain power or similar events; and

•	existence of liens, encumbrances and other imperfections in title affecting real estate interests.

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•	the protection of wildlife, including, but not limited to, migratory birds, bats and threatened and endangered species, such as desert tortoises, or protected species, such as eagles, and other protected plants or animals whose presence or movements often cannot be anticipated or controlled;

•	the storage, handling, use and transportation of natural gas as well as other hazardous or toxic substances and other regulated substances, materials, and/or chemicals;

•	air emissions, water quality, releases of hazardous materials into the environment and the prevention of and responses to releases of hazardous materials into soil and groundwater;

•

federal, state or local land use, zoning, building and transportation laws and requirements, which may mandate conformance with sound levels, radar and communications interference, hazards to aviation or navigation, or other potential nuisances, such as the flickering effect, caused when rotating wind turbine blades periodically cast shadows through openings, such as the windows of neighboring properties, which is known as shadow flicker;

•	the presence or discovery of archaeological, religious or cultural resources at or near NEP's projects or pipelines; and

•	the protection of workers’ health and safety.

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•	delays in obtaining, or the inability to obtain, necessary permits and licenses;

•	delays and increased costs related to the interconnection of new projects to the transmission system;

•	the inability to acquire or maintain land use and access rights;

•	the failure to receive contracted third-party services;

•	interruptions to dispatch at the projects;

•	supply interruptions, including as a result of changes in international trade laws, regulations, agreements, treaties or policies of the U.S. or other countries in which NEP's suppliers are located;

•	work stoppages;

•	labor disputes;

•	weather interferences;

•	unforeseen engineering, environmental and geological problems, including, but not limited to, discoveries of contamination, protected plant or animal species or habitat, archaeological or cultural resources or other environment-related factors;

•	unanticipated cost overruns in excess of budgeted contingencies; and

•	failure of contracting parties to perform under contracts.

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•	Specified events beyond NEP's control or the control of a customer may temporarily or permanently excuse the customer from its obligation to accept and pay for delivery of energy generated by a project. These events could include, among other things, a system emergency, transmission failure or curtailment, adverse weather conditions or labor disputes.

•

Since Pemex, an autonomous state entity controlled by the government of Mexico, makes payments with respect to natural gas transportation agreements, NEP is subject to the risk that Pemex may attempt to unilaterally change or terminate its contract with NEP, whether as a result of legislative, regulatory, political or other activities, including changes in international trade laws, regulations, agreements, treaties or policies of the U.S. or other countries.

•	Certain of NEP’s customers, including PG&E, have been impacted by wildfires in California and have been or could be subject to significant liability in excess of their insurance coverage which could be expected to have a significant impact on their financial condition.

•

The ability of NEP's customers to fulfill their contractual obligations to NEP depends on their financial condition. NEP is exposed to the credit risk of its customers over an extended period of time due to the long-term nature of NEP's contracts with them. These customers could become subject to insolvency or liquidation proceedings or otherwise suffer a deterioration of their financial condition when they have not yet paid for services delivered, any of which could result in underpayment or nonpayment under such agreements.

•	A default or failure by NEP to satisfy minimum energy or natural gas delivery requirements or mechanical availability levels under NEP's agreements could result in damage payments to the applicable customer or termination of the applicable agreement.

•	whether the PPA counterparty has a continued need for energy at the time of the agreement’s expiration, which could be affected by, among other things, the presence or absence of governmental incentives or mandates, prevailing market prices, and the availability of other energy sources;

•	the amount of commercial natural gas supply available to its pipelines' systems and changing natural gas supply flow patterns in North America;

•	the satisfactory performance of NEP's obligations under such PPAs, natural gas transportation agreements or other customer contracts;

•	the regulatory environment applicable to NEP's contract counterparties at the time;

•	macroeconomic factors present at the time, such as population, business trends, international trade laws, regulations, agreements, treaties or policies of the U.S. or other countries and related energy demand; and

•	the effects of regulation on the contracting practices of NEP's contract counterparties.

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•	competing bids for a project from companies that may have substantially greater purchasing power, capital or other resources or a greater willingness to accept lower returns or more risk than NEP does;

•	NEP's failure to agree to favorable financial or legal terms with sellers with respect to any proposed acquisitions;

•	fewer acquisition opportunities than NEP expects, which could result from, among other things, available projects having less desirable economic returns or higher risk profiles than NEP believes suitable for its acquisition strategy and future growth;

•	NEP's failure to successfully complete construction of and finance projects, to the extent that it decides to acquire projects that are not yet operational or to otherwise pursue construction activities with respect to new projects;

•	NEP's inability to obtain regulatory approvals or other necessary consents to consummate an acquisition; and

•	the presence or potential presence of:

•	pollution, contamination or other wastes at the project site;

•	protected plant or animal species;

•	archaeological or cultural resources;

•	wind waking or solar shadowing effects caused by neighboring activities, which reduce potential energy production by decreasing wind speeds or reducing available insolation;

•	land use restrictions and other environment-related siting factors; and

•	local opposition to wind and solar projects and pipeline projects in certain markets due to concerns about noise, health, environmental or other alleged impacts of such projects.

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•	incur or guarantee additional debt;

•	make distributions on or redeem or repurchase common units;

•	make certain investments and acquisitions;

•	incur certain liens or permit them to exist;

•	enter into certain types of transactions with affiliates;

•	merge or consolidate with another company; and

•	transfer, sell or otherwise dispose of projects.

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•	failure to comply with the covenants in the agreements governing these obligations could result in an event of default under those agreements, which could be difficult to cure, result in bankruptcy or, with respect to subsidiary debt, result in loss of NEP OpCo's ownership interest in one or more of its subsidiaries or in some or all of their assets as a result of foreclosure;

•	NEP's subsidiaries’ debt service obligations require them to dedicate a substantial portion of their cash flow to pay principal and interest on their debt, thereby reducing their cash available for distribution to NEP;

•	NEP's subsidiaries’ substantial indebtedness could limit NEP's ability to fund operations of any projects acquired in the future and NEP's financial flexibility, which could reduce its ability to plan for and react to unexpected opportunities or challenges;

•	NEP's subsidiaries’ substantial debt service obligations make NEP vulnerable to adverse changes in general economic, credit markets, capital markets, industry, competitive conditions and government regulation that could place NEP at a disadvantage compared to competitors with less debt; and

•	NEP's subsidiaries’ substantial indebtedness could limit NEP's ability to obtain financing for working capital, including, but not limited to, collateral postings, capital expenditures, debt service requirements, acquisitions and general partnership or other purposes.

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•	NEP is able to identify attractive acquisition candidates;

•	NEP is able to negotiate acceptable purchase agreements;

•	NEP is able to obtain financing for these acquisitions on economically acceptable terms; and

•	NEP is outbid by competitors.

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•	No agreement requires NEE or its affiliates to pursue a business strategy that favors NEP or uses NEP's projects or dictates what markets to pursue or grow.

•	NEE and its affiliates are not limited in their ability to compete with NEP, and neither NEP GP nor its affiliates have any obligation to present business opportunities to NEP.

•	So long as the officers of NEP are officers of NEE or its affiliates, they will also devote significant time to the business of NEE or its affiliates and will be compensated by NEE or its affiliates.

•	The board may cause NEP to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make a payment of the IDR fee.

•

NEP's partnership agreement replaces the fiduciary duties that would otherwise be owed by NEP GP and the directors and officers of NEP with contractual standards governing their duties and limits NEP GP’s and such directors’ and officers' liabilities and the remedies available to NEP's unitholders for actions that, without these limitations, might constitute breaches of fiduciary duty under applicable Delaware law.

•	Except in limited circumstances, the board has the power and authority to conduct NEP's business without the approval of NEP GP or NEP's unitholders.

•	Actions taken by the board may affect the amount of cash available to pay distributions to NEP's unitholders.

•	NEP GP has limited liability regarding NEP's contractual and other obligations.

•	The board controls the exercise of the rights of NEP against NEE and its affiliates, and the enforcement of the obligations that NEE and its affiliates owe to NEP.

•	NEP may choose not to retain counsel, independent accountants or other advisors separate from those retained by NEP GP or NEE to perform services for NEP or for the holders of common units.

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•	NEE Management defaults in the performance or observance of any material term, condition or covenant contained therein in a manner that results in material harm to NEP or its affiliates and the default continues unremedied for a period of 90 days after written notice thereof is given to NEE Management;

•	NEE Management engages in any act of fraud, misappropriation of funds or embezzlement that results in material harm to NEP or its affiliates;

•	NEE Management is reckless in the performance of its duties under the agreement and such recklessness results in material harm to NEP or its affiliates;

•	upon the happening of certain events relating to the bankruptcy or insolvency of NEP or certain of its affiliates; or

•

NEE Management intentionally or willfully takes any action that materially conflicts with or directly contravenes any resolution or other determination of the board relating to certain significant activities of NEP, such action has caused, or would reasonably be expected to cause, material harm to NEP and its subsidiaries, and such action continues unremedied for a period of 90 days after written notice thereof is given to NEE Management.

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•	the amount of power generated from its projects and the amount of natural gas transported in its pipelines, and the prices received therefor;

•	its operating costs;

•	payment of interest and principal amortization, which depends on the amount of its indebtedness and the interest payable thereon;

•	the ability of NEP OpCo’s subsidiaries to distribute cash under their respective financing agreements;

•	the completion of any ongoing construction activities on time and on budget;

•	its capital expenditures; and

•	if NEP OpCo acquires a project prior to its COD, timely completion of future construction projects.

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•	availability of borrowings under its subsidiaries' credit facility to pay distributions;

•	the costs of acquisitions, if any;

•	fluctuations in its working capital needs;

•	timing and collectability of receivables;

•	restrictions on distributions contained in its subsidiaries' credit facility and other financing documents;

•	prevailing economic conditions;

•	access to credit or capital markets; and

•	the amount of cash reserves established by NEP OpCo GP, NEP OpCo’s general partner, for the proper conduct of its business.

•	appointment of three directors of NEP;

•	how to exercise voting rights with respect to the units NEP GP or its affiliates own in NEP OpCo and NEP;

•	whether to exchange NEP OpCo common units owned by NEE Equity for NEP common units or, with the approval of the conflicts committee, to have NEP OpCo redeem NEP OpCo common units owned by NEE Equity for cash; and

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•	whether to consent to, among other things, NEP’s participation in certain activities or lines of business, the sale of all or substantially all of the assets of NEP, any merger, consolidation or conversion of NEP, dissolution of NEP, or an amendment to NEP OpCo’s partnership agreement.

•	whenever NEP GP or the board, or any director or any committee of the board (including, but not limited to, the conflicts committee), makes a determination or takes, or declines to take, any other action in its respective capacity, they are required to act in good faith;

•	NEP GP will not have any liability to NEP or its unitholders for decisions made in its capacity as a general partner so long as such decisions are made in good faith;

•

NEP GP and its officers and directors and the officers and directors of NEP will not be liable for monetary damages to NEP or NEP's limited partners resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining such persons acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and

•	NEP GP and its affiliates and NEP’s directors will not be in breach of their obligations under NEP’s partnership agreement (including, but not limited to, any duties to NEP or its unitholders) if a transaction with an affiliate or the resolution of a conflict of interest is:

•	approved by the conflicts committee of the board, although the board is not obligated to seek such approval;

•	approved by the vote of a majority of the outstanding common units, excluding any common units owned by NEP GP and its affiliates if the conflict involves NEP GP or any of its affiliates;

•	determined by the board to be on terms no less favorable to NEP than those generally being provided to or available from unrelated third parties; or

•	determined by the board to be fair and reasonable to NEP, taking into account the totality of the relationships among the parties involved, including, but not limited to, other transactions that may be particularly favorable or advantageous to NEP.

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•	NEP's existing unitholders’ proportionate ownership interest in NEP will decrease;

•	the amount of cash distributions per common unit may decrease;

•	because the IDR fee is based on a percentage of total available cash, the IDR fee will increase if total available cash increases even if the per unit distribution on common units remains the same;

•	the relative voting strength of each previously outstanding unit may be diminished; and

•	the market price of the common units may decline.

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•	NEP was conducting business in a state but had not complied with that particular state ’s partnership statute; or

•	the unitholder’s right to act with other unitholders to remove or replace NEP GP, to approve some amendments to NEP's partnership agreement or to take other actions under NEP's partnership agreement constitute “control” of NEP's business.

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•	an existing unitholder’s proportionate ownership interest in NEP will decrease;

•	the amount of cash available for distribution on each common unit may decrease;

•	the relative voting strength of each previously outstanding common unit will be diminished; and

•	the market price of NEP's common units may decline.

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(a)

The year ended December 31, 2019 reflects higher losses related to NEP's derivative instruments (see Note 7 - Financial Statement Impact of Derivative Instruments). The year ended December 31, 2018 reflects a gain of approximately $153 million (see Note 2 - Disposal of Canadian Holdings). The year ended December 31, 2017 reflects an income tax charge of approximately $100 million, all of which was attributable to NEP, related to tax reform (see Note 5). The year ended December 31, 2016 reflects a favorable fair value adjustment of approximately $189 million.

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•	when required by its subsidiaries’ financings;

•	when its subsidiaries’ financings otherwise permit distributions to be made to NEP OpCo;

•	when funds are required to be returned to NEP OpCo; or

•	when otherwise demanded by NEP OpCo.

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(a)	Excludes credit facilities discussed below due to restrictions on the use of the borrowings. See Note 11 - Debt.

(b)	In February 2020, an additional $50 million was borrowed under the NEP OpCo credit facility and the maturity date was extended until 2025.

(c)	Excludes current restricted cash of approximately $3 million and $8 million at December 31, 2019 and 2018, respectively. See Note 2 - Restricted Cash.

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(a)	Includes principal, interest, fees on credit facilities and interest rate swaps. Variable rate interest was computed using December 31, 2019 rates. Such amounts reflect scheduled payments under the financing agreements for debt in default as the lenders have not issued any acceleration notices. See Note 11 - Debt.

(b)	Primarily reflects commitments related to construction activities (see Note 15 - Development, Engineering and Construction Commitments), lease payment obligations (see Note 14) and payments related to the acquisition of certain development rights.

(c)	Represents expected cash payments adjusted for inflation for estimated costs to perform asset retirement activities.

(d)	Represents minimum fees under the MSA and CSCS agreement. See Note 13.

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(a)	A security rating is not a recommendation to buy, sell or hold securities and should be evaluated independently of any other rating. The rating is subject to revision or withdrawal at any time by the assigning rating organization.

(b)	The outlook indicated by each of Moody's, S&P and Fitch is stable.

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•	We tested the effectiveness of controls over purchase accounting, including NEP’s review of the third-party specialist’s valuation report.

•	We tested the effectiveness of NEP’s controls over the accounting and reporting for the transaction and the Class B

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•	We read the joint venture agreement to evaluate the business purpose of the transaction.

•	We used our firm specialist resources to assist in auditing management’s conclusions through an accounting consultation. The accounting consultation included evaluation of the terms of the agreement to determine the appropriateness of the accounting conclusions reached regarding the application of HLBV accounting.

•	We tested the initial recording of the NCI balance related to the Class B Investor and the income allocation to the Class B Investor for the period.

•	We evaluated the competency of the third party specialist engaged by NEP to perform the valuation. We read and tested the third party valuation report.

•	We assessed the reasonableness of management’s future cash flows by comparing the projections to historical results and similar companies acquired in previous years.

•	We evaluated whether the estimated future cash flows were consistent with evidence obtained in other areas of the audit.

•	With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate, including testing the source information underlying the determination of the discount rate, testing the mathematical accuracy of the calculation, and developing a range of independent estimates and comparing those to the discount rate selected by management.

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(a)	Includes related party revenues of approximately $8 million, $4 million and $9 million for 2019, 2018 and 2017, respectively.

(b)

Includes operations and maintenance (O&M) expenses related to renewable energy projects of approximately $182 million, $128 million and $132 million and O&M expenses related to the Texas pipelines of $47 million, $45 million and $44 million for 2019, 2018 and 2017, respectively. Total O&M expenses presented includes related party amounts of approximately $116 million, $97 million and $88 million for 2019, 2018 and 2017, respectively.

(c)	For 2017, net income attributable to noncontrolling interests includes the pre-acquisition net income of the common control acquisitions. See Note 2 - Basis of Presentation.

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(a)	For 2017, comprehensive income attributable to noncontrolling interests includes the pre-acquisition comprehensive income of the common control acquisitions. See Note 2 - Basis of Presentation.

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NextEra Energy Partners, LP (NEP) was formed as a Delaware limited partnership on March 6, 2014 as an indirect wholly owned subsidiary of NextEra Energy, Inc. (NEE), a Florida corporation. NEP was formed to be a growth-oriented limited partnership that would acquire, manage and own contracted clean energy projects with stable long-term cash flows.

On July 1, 2014, NEP completed its initial public offering (IPO). NEP used the proceeds from the IPO to purchase common units of NextEra Energy Operating Partners, LP (NEP OpCo) from NextEra Energy Equity Partners, LP (NEE Equity), a limited partnership formed under the laws of the State of Delaware and an indirect wholly owned subsidiary of NEE, and to purchase NEP OpCo common units from NEP OpCo.

NEP OpCo is a limited partnership with a general partner and limited partners. NEP consolidates the results of NEP OpCo and its subsidiaries because of its controlling interest in the general partner of NEP OpCo. At December 31, 2019, NEP owned an approximately 39.2% limited partner interest in NEP OpCo's common units and NEE Equity owned a noncontrolling 60.8% limited partner interest in NEP OpCo's common units.

Basis of Presentation - NEP’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S., or GAAP. The consolidated financial statements include NEP’s accounts and operations and those of its subsidiaries in which NEP has a controlling interest. The acquisitions from NEER in 2017 described in Note 3 (the common control acquisitions) were a transfer of assets between entities under common control, which required them to be accounted for as if the transfers occurred since the inception of common control, with prior periods retrospectively adjusted to furnish comparative information. Accordingly, the consolidated financial statements were retrospectively adjusted to include the historical results of the common control acquisitions prior to their respective acquisition dates. Adjustments related to the historical results of the common control acquisitions were attributable to noncontrolling interests for all periods prior to the date the project was acquired by NEP.

All intercompany transactions have been eliminated in consolidation. Certain amounts included in prior years' consolidated financial statements have been reclassified to conform to the current year's presentation. The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Disposal of Canadian Holdings - In June 2018, a subsidiary of NEP completed the sale of NextEra Energy Canada Partners Holdings, ULC and subsidiaries (Canadian Holdings) for cash proceeds of approximately CAD $740 million (USD $563 million at June 29, 2018), subject to post-closing working capital adjustments of approximately $1 million. In addition, the purchaser assumed approximately $676 million of existing debt. Canadian Holdings owned four wind generation facilities and two solar generation facilities located in Ontario, Canada with a generating capacity totaling approximately 396 megawatts (MW). NEP recognized a gain of approximately $153 million ($201 million after tax). Income before income taxes associated with Canadian Holdings, excluding the financial statement impacts resulting from the sale in 2018, was approximately $47 million and $68 million for the years ended December 31, 2018 and 2017, respectively.

Revenue Recognition - Revenue is generated primarily from various non-affiliated parties under long-term power purchase agreements, and prior to the sale of Canadian Holdings in 2018, Feed-in-Tariff agreements and Renewable Energy Standard Offer Program agreements (collectively, PPAs), and natural gas transportation agreements. Revenue is recognized as energy and any related renewable energy attributes are delivered, which is when revenue is earned based on energy delivered at rates stipulated in the respective PPAs, or natural gas transportation services are performed. See Note 4.

In 2019, 2018 and 2017, approximately $125 million, $234 million and $275 million, respectively, of NEP's consolidated revenues were attributable to foreign countries, primarily related to its contract with a Mexican counterparty and, prior to the sale of Canadian Holdings in 2018, its Canadian operations.

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Income Taxes - NEP recognizes in income its applicable ownership share of U.S. income taxes due to the disregarded tax status of substantially all of the U.S. projects under NEP OpCo. Prior to the sale of Canadian Holdings, NEP's former Canadian subsidiaries were all Canadian taxpayers, and therefore NEP recognized in income all of the Canadian taxes. Net income or loss attributable to noncontrolling interests includes minimal U.S. taxes and, prior to the sale, NEER's applicable ownership share of Canadian taxes.

For periods through December 31, 2017, when NEP acquired a NEER project, income taxes were calculated on the predecessor method using the separate return method applied to the group of renewable energy projects acquired. As a result of the governance changes discussed in Note 3, beginning in January 2018, acquisitions from NEER are no longer treated as common control acquisitions, and income taxes are calculated on the successor method under which taxes are calculated for NEP as a single taxpaying corporation for U.S. federal and state income taxes (based on its election to be taxed as a corporation).

Foreign Operations and Currency Translation - NEP’s reporting currency is the U.S. dollar. Prior to the disposal of Canadian Holdings, the functional currency for the Canadian project companies was the Canadian dollar because Canada was the primary economic environment in which they conducted their Canadian operations. The assets and liabilities of the Canadian project companies were translated to U.S. dollars at exchange rates at the balance sheet date. The income and expenses of the Canadian project companies were translated to U.S. dollars at exchange rates in effect during each respective period. The translation adjustment was recorded in accumulated other comprehensive income (loss) (AOCI).

Equity - Equity reflects the financial position of the parties with an ownership interest in the consolidated financial statements. NextEra Energy Partners GP, Inc. has a total equity interest in NEP of $10,000 at December 31, 2019 and 2018.

Limited partners' equity in common units at December 31, 2019 and 2018 reflects the investment of NEP common unitholders, changes to net income attributable to NEP, distributions of available cash to common unitholders and other contributions from or distributions to NEP common unitholders. Accumulated other comprehensive loss at December 31, 2019 and 2018 reflects comprehensive income (loss) attributable to NEP.

Noncontrolling Interests - Noncontrolling interests represents the portion of net assets in consolidated entities that are not owned by NEP and are reported as a component of equity on NEP’s consolidated balance sheets. At December 31, 2019, NEE Equity's 60.8% noncontrolling interest in NEP OpCo, a non-affiliated party's 10% interest in one of the Texas pipelines, NEER's approximately 50% noncontrolling ownership interest in Silver State, the interests related to differential membership interests discussed below and the Class B noncontrolling ownership interests discussed below are reflected as noncontrolling interests on NEP's consolidated balance sheets.

Prior to being acquired by NEP, certain subsidiaries of NEER sold Class B membership interests in entities that have ownership interests in 20 wind projects (differential membership interests) to third-party investors. Although the third-party investors own equity interests in the wind projects, NEP retains a controlling interest in the entities as of December 31, 2019 and therefore presents the differential membership interests as noncontrolling interests. The third-party investors are allocated earnings, tax attributes and cash flows in accordance with the respective limited liability company agreements. Those economics are allocated primarily to the third-party investors until they receive a targeted return (the flip date) and thereafter to NEP. NEP has the unilateral right to call the third-party interests at specified amounts if and when the flip date occurs. Pursuant to previous accounting guidance, prior to 2018, the proceeds received on the sale of the differential membership interests were deferred and recorded as a liability on NEP's consolidated balance sheets. The deferred amount was being recognized in benefits associated with differential membership interests - net in NEP's consolidated statements of income (loss) as the third-party investors received their portion of the economic attributes. NEP operates and manages the 20 wind projects, and consolidates the entities that directly and indirectly own the 20 wind projects.

During 2018 and 2019, subsidiaries of NEP sold Class B noncontrolling membership interests in NEP Renewables, LLC (NEP Renewables), NEP Renewables II, LLC (NEP Renewables II), NextEra Energy Partners Pipelines, LLC (NEP Pipelines) and South Texas Midstream, LLC (STX Midstream) (collectively, Class B noncontrolling ownership interests). See Note 11 - Equity. The NEP subsidiaries selling the Class B noncontrolling ownership interests retain controlling interests in the related entities as of December 31, 2019 and therefore NEP presents the Class B noncontrolling ownership interests as noncontrolling interests.

For the differential membership interests and Class B noncontrolling interests, NEP has determined the allocation of economics between the controlling party and third-party investor should not follow the respective ownership percentages for each investment but rather the hypothetical liquidation of book value (HLBV) method based on the governing provisions in each respective limited liability company agreement. Under the HLBV method, the amounts of income and loss attributable to the noncontrolling interests reflects changes in the amount the owners would hypothetically receive at each balance sheet date under the respective liquidation provisions, assuming the net assets of these entities were liquidated at the recorded amounts, after taking into account any capital transactions, such as contributions and distributions, between the entities and the owners. At the point in time that the third-party, in hypothetical liquidation, would achieve its targeted return, NEP attributes the additional hypothetical proceeds to the differential membership interests based on the call price.

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For the noncontrolling interests, other than the differential membership interests and the Class B noncontrolling interests, net income (loss) is allocated based on the respective ownership percentages. Thus, the impact of the net income (loss) attributable to the Class B noncontrolling ownership interests and the differential membership interests are allocated to NEE Equity's noncontrolling ownership interest and the net income attributable to NEP based on their respective ownership percentage of NEP OpCo. Distributions related to the noncontrolling interests, other than the differential membership interests and Class B noncontrolling interests, are reflected as Partners/Members' distributions in NEP's consolidated statements of cash flows. Details of the activity in noncontrolling interests for the years ended December 31, 2019 and 2018 are below:

		Class B Noncontrolling Ownership Interests				Differential Membership Interests				Noncontrolling Ownership Interests in NEP OpCo, Silver State and Texas pipeline				Total Noncontrolling Interests
		(millions)
Balances, December 31, 2017		$	—			$	—			$	34			$	34
Sale of Class B noncontrolling interest - net		750				—				—				750
Acquisition of subsidiaries with differential membership interests		—				941				—				941
Related party note receivable		—				—				31				31
Net income (loss) attributable to noncontrolling interests(a)		1				(370		)		444				75
Other comprehensive income		—				—				12				12
Related party contributions		—				—				4				4
Related party distributions		—				—				(204		)		(204		)
Changes in non-economic ownership interests		—				—				(7		)		(7		)
Differential membership investment contributions, net of distributions		—				35				—				35
Disposal of Canadian Holdings		—				—				105				105
Adoption of accounting standards update		—				1,413				3				1,416
Balances, December 31, 2018		751				2,019				422				3,192
Sales of Class B noncontrolling interests - net		1,788				—				—				1,788
Acquisition of subsidiary with noncontrolling interests		—				—				462				462
Related party note receivable		—				—				2				2
Net income (loss) attributable to noncontrolling interests		112				(257		)		(188		)		(333		)
Other comprehensive loss		—				—				(2		)		(2		)
Related party contributions		—				—				23				23
Related party distributions		—				—				(249		)		(249		)
Changes in non-economic ownership interests		—				—				(12		)		(12		)
Differential membership investment contributions, net of distributions		—				36				—				36
Payments to Class B noncontrolling interest investors		(23		)		—				—				(23		)
Other		—				—				(1		)		(1		)
Balances, December 31, 2019		$	2,628			$	1,798			$	457			$	4,883

____________________

(a)	Net loss attributable to differential membership interests includes approximately $231 million ($211 million after tax) related to the reduction of differential membership interests as a result of the change in federal corporate income tax rates effective January 1, 2018.

Property, Plant and Equipment - net - Property, plant and equipment consists primarily of development, engineering and construction costs for the renewable energy assets, equipment, land, substations, transmission lines and pipeline facilities. Property, plant and equipment, excluding land and perpetual rights-of-way, is recorded at cost and depreciated on a straight-line basis over the estimated useful lives ranging from three to 50 years, commencing on the date the assets are placed in service or acquired. See Note 8. Maintenance and repairs of property, plant and equipment are charged to O&M expense as incurred.

Property, plant and equipment - net on NEP's consolidated balance sheets includes construction work in progress which reflects construction materials, other equipment, third-party engineering costs, capitalized interest and other costs directly associated with the development and construction of the various projects. Upon commencement of plant or pipeline operations, costs associated with construction work in progress are transferred to the appropriate category in property, plant and equipment - net.

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Convertible investment tax credits (CITCs) of approximately $703 million at both December 31, 2019 and 2018, are recorded as a reduction in property, plant and equipment - net on NEP's consolidated balance sheets and are amortized as a corresponding reduction to depreciation expense over the estimated life of the related asset. At December 31, 2019, other receivables on NEP's consolidated balance sheets includes a CITC receivable of approximately $124 million associated with one of its solar projects. At December 31, 2019, corresponding liabilities of approximately $100 million and $12 million related to the CITC payments required to be paid to the third party who constructed the project are reflected as accounts payable and accrued expenses and other current liabilities, respectively, and $12 million of CITC payments to be paid to NEER are reflected as current due to related parties on NEP's consolidated balance sheets.

Cash and Cash Equivalents - Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less. NEP primarily holds such investments in money market funds.

Accounts Receivable and Allowance for Doubtful Accounts - Accounts receivable are reported at the invoiced or estimated amount adjusted for any write-offs and any estimated allowance for doubtful accounts on NEP's consolidated balance sheets. The allowance for doubtful accounts is reviewed periodically based on amounts past due and significance. There was no allowance for doubtful accounts recorded at December 31, 2019 and 2018.

Restricted Cash - At December 31, 2019 and 2018, NEP had approximately $3 million and $8 million, respectively, of restricted cash included in other current assets and, in 2018, approximately $11 million of restricted cash included in other non-current assets on NEP's consolidated balance sheets. Restricted cash at December 31, 2019 is primarily related to collateral deposits from a counterparty and, at December 31, 2018, is primarily related to amounts held by certain subsidiaries to pay for certain capital or operating expenditures, as well as to fund required equity contributions pursuant to restrictions contained in the subsidiaries' debt agreements. Restricted cash reported as current assets are recorded as such based on the anticipated use of these funds.

Concentration of Credit Risk - Financial instruments which potentially subject NEP to concentrations of credit risk consist primarily of accounts receivable and derivative instruments. Accounts receivable are comprised primarily of amounts due from various non-affiliated parties who are counterparties to the PPAs or natural gas transportation agreements. The majority of NEP's counterparties are in the energy industry, and this concentration may impact the overall exposure to credit risk, either positively or negatively, in that the counterparties may be similarly affected by changes in economic, industry or other conditions. If any of these customers’ receivable balances should be deemed uncollectible, it could have a material adverse effect on NEP’s consolidated results of operations and financial condition. Substantially all amounts due from such counterparties at December 31, 2019 have been collected.

During 2019, NEP derived approximately 16% and 15% of its consolidated revenue from its contracts with Pacific Gas and Electric Company (PG&E) and Mex Gas Supply S.L., respectively. See Note 15 - PG&E Bankruptcy.

Inventories - Spare parts inventories are carried at the lower of weighted-average cost and net realizable value and are included in other current assets on NEP’s consolidated balance sheets. Spare parts inventories were approximately $20 million and $19 million at December 31, 2019 and 2018, respectively.

Impairment of Long-Lived Assets and Finite-Lived Intangible Assets - Long-lived assets that are held and used and finite-lived intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is required to be recognized if the carrying value of the asset exceeds the undiscounted future net cash flows associated with that asset. The impairment loss to be recognized is the amount by which the carrying value of the asset exceeds the asset's fair value. In most instances, the fair value is determined by discounting estimated future cash flows using an appropriate interest rate. During the years ended December 31, 2019 and 2018, no impairment adjustments were necessary.

Business Combinations - For projects acquired in a business combination, NEP allocates the cost of the acquisition to assets acquired and liabilities assumed based on fair values as of the acquisition date. Goodwill acquired in connection with business combinations represents the excess of consideration over the fair value of net assets acquired. Certain assumptions and estimates are employed in determining the fair value of assets acquired and evaluating the fair value of liabilities assumed. See Note 3.

Goodwill and Indefinite-Lived Intangible Assets - Goodwill and indefinite-lived intangible assets are assessed for impairment at least annually by applying a fair value-based analysis. NEP completed the annual impairment test for goodwill and indefinite-lived intangibles using an assessment date of October 1 and determined, based on the results, that no goodwill impairment charge was required. As a result of the sale of Canadian Holdings discussed above, goodwill was reduced by approximately $44 million during 2018.

Intangible Asset - Customer Relationships - At December 31, 2019 and 2018, NEP's consolidated balance sheets reflect intangible asset - customer relationships related to the acquisition of the Texas pipelines in 2015. Intangible asset - customer relationships are amortized on a straight-line basis over the estimated useful life of approximately 40 years. For each of the years ended December 31, 2019, 2018 and 2017, amortization expense was approximately $17 million and is expected to be approximately $17 million in each of the next five years.

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Intangible Asset - PPAs - At December 31, 2019 and 2018, NEP's consolidated balance sheets reflect intangible asset - PPAs primarily related to the acquisitions from NEER in 2019 and 2018 (see Note 3). Intangible asset - PPAs are amortized into operating revenues on a straight-line basis over the remaining contract terms of the related PPAs, which approximates the period giving rise to the value. At December 31, 2019, amortization of the intangible asset - PPAs is expected to be approximately $103 million in each of the next five years.

Derivative Instruments and Hedging Activities - Derivative instruments, when required to be marked to market, are recorded on NEP’s consolidated balance sheets as either an asset or a liability measured at fair value. See Note 7.

Fair Value Measurements - NEP uses several different valuation techniques to measure the fair value of assets and liabilities relying primarily on the market approach of using prices and other market information for identical or comparable assets and liabilities for those assets and liabilities that are measured on a recurring basis. Certain financial instruments may be valued using multiple inputs including discount rates, counterparty credit ratings and credit enhancements. NEP’s assessment of the significance of any particular input to the fair value measurement requires judgment and may affect the fair value measurement of its assets and liabilities and the placement of those assets and liabilities within the fair value hierarchy levels. See Note 6.

Long-term Debt Costs - NEP recognizes interest expense using the effective interest method over the life of the related debt. Certain of NEP’s debt obligations include escalating interest rates that are incorporated into the effective interest rate for the related debt. Deferred interest includes interest expense recognized in excess of the interest payments accrued for the related debt’s stated interest payments and is recorded in other non-current liabilities on NEP’s consolidated balance sheets. Debt issuance costs include fees and costs incurred to obtain long-term debt and are amortized over the life of the related debt using the effective interest rate established at debt issuance. NEP incurred approximately $42 million of debt issuance costs during the year ended December 31, 2019. The amortization of debt issuance costs totaled approximately $11 million, $12 million and $11 million for the years ended December 31, 2019, 2018 and 2017, respectively, and is included in interest expense in NEP’s consolidated statements of income (loss). In addition, NEP wrote-off approximately $22 million of debt issuance costs during 2019 due to the retirement of the related debt. See Note 11 - Debt.

Asset Retirement Obligations - Asset retirement obligations are those for which a legal obligation exists under laws, statutes, and written or oral contracts, including obligations arising under the doctrine of promissory estoppel, and for which the timing or method of settlement may be conditioned on a future event.

NEP accounts for asset retirement obligations and conditional asset retirement obligations (collectively, AROs) under accounting guidance that requires a liability for the fair value of an ARO to be recognized in the period in which it is incurred if it can be reasonably estimated, with the offsetting associated asset retirement costs capitalized as part of the carrying amount of the long-lived asset. The asset retirement cost is subsequently allocated to expense using a systematic and rational method over the asset’s estimated useful life. Changes in the ARO resulting from the passage of time are recognized as an increase in the carrying amount of the liability and as accretion expense, which is included in depreciation and amortization expense in NEP’s consolidated statements of income (loss). Changes resulting from revisions to the timing or amount of the original estimate of cash flows are recognized as an increase or a decrease in the asset retirement cost, or income when the asset retirement cost is depleted.

NEP recorded accretion expense of approximately $6 million, $4 million and $4 million in the years ended December 31, 2019, 2018 and 2017. Additional AROs were established amounting to approximately $38 million in 2019 and $24 million in 2018 related to the acquisitions from NEER (see Note 3), partly offset by a decrease in 2018 of $13 million related to the sale of Canadian Holdings.

Investments in Unconsolidated Entities - NEP accounts for the investments in its unconsolidated entities under the equity method. NEP’s share of earnings (losses) in the unconsolidated entities is included in equity in earnings of equity method investees and equity in earnings (losses) of non-economic ownership interests in NEP's consolidated statements of income (loss). NEP records losses of the unconsolidated entities only to the extent of its investment unless there is an obligation to provide further financial support for the investee. All equity in earnings (losses) of the non-economic ownership interests is allocated to net income attributable to noncontrolling interests. See Note 9 and Note 10.

Variable Interest Entities (VIEs) - An entity is considered to be a VIE when its total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, or its equity investors, as a group, lack the characteristics of having a controlling financial interest. A reporting company is required to consolidate a VIE as its primary beneficiary when it has both the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. NEP evaluates whether an entity is a VIE whenever reconsideration events as defined by the accounting guidance occur. See Note 10.

Leases - NEP determines if an arrangement is a lease at inception. NEP recognizes a right-of-use (ROU) asset and a lease liability for operating leases by recognizing and measuring leases at the commencement date based on the present value of lease payments over the lease term. NEP has elected not to apply the recognition requirements to short-term leases and not to separate nonlease

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components from associated lease components for substantially all classes of underlying assets. ROU assets are included primarily in noncurrent other assets and lease liabilities are included in current and noncurrent other liabilities on NEP's consolidated balance sheets. Operating lease expense is included in O&M expense and amortization expense is included in depreciation and amortization expense in NEP’s consolidated statements of income (loss). See Note 14.

In May 2017, an indirect subsidiary of NEP completed the acquisition from NEER of Golden West Wind Holdings, LLC for approximately $238 million, plus working capital of $4 million and the assumption of $184 million in existing liabilities related to differential membership interests. Golden West Wind Holdings, LLC indirectly owns an approximately 249 MW wind generation facility located in Colorado.

In November 2017, a subsidiary of NEP completed the acquisition from NEER of (1) Javelina Wind Funding, LLC, which indirectly owns an approximately 250 MW wind generation facility located in Texas; (2) Nokota Wind Holdings, LLC, which indirectly owns two wind generation facilities with a combined generating capacity of 299 MW located in North Dakota; and (3) an additional indirect approximately 26% interest in Desert Sunlight Investment Holdings, LLC (Desert Sunlight), for approximately $812 million, plus working capital of $20 million and the assumption of $459 million in existing liabilities related to differential membership interests. NEER retained an interest in Desert Sunlight which owns two project entities, that together make up the Desert Sunlight Solar Energy Center, a 550 MW solar generation plant located in California, and remains the managing member.

The acquisitions from NEER in 2017 discussed above are collectively referred to as the common control acquisitions. The common control acquisitions were transfers of assets between entities under common control, which require them to be accounted for as if the transfers occurred since the inception of common control, with prior periods retrospectively adjusted to furnish comparative information. Accordingly, NEP's consolidated financial statements were retrospectively adjusted to include the historical results and financial position of the common control acquisitions prior to their respective acquisition dates.

In 2017, NEP and NEP GP implemented governance changes that, among other things, enhanced NEP unitholder governance rights. The new governance structure established a NEP board of directors whereby NEP unitholders have the ability to nominate and elect board members, subject to certain limitations and requirements, which elected board members commenced service in January 2018. As a result of these governance changes, beginning in January 2018, acquisitions from NEER are no longer treated as common control acquisitions.

In December 2018, a subsidiary of NEP completed the acquisition from NEER of NEP Renewables, which owns (1) Breckinridge Wind Class A Holdings, LLC, which indirectly owns an approximately 98 MW wind generation facility located in Oklahoma, (2) Carousel Wind Holdings, LLC, which indirectly owns an approximately 150 MW wind generation facility located in Colorado, (3) Monarch Wind Holdings, LLC, which indirectly owns two wind generation facilities with a combined generating capacity of approximately 450 MW located in Texas and Oklahoma, (4) Mountain View Solar Holdings, LLC, which indirectly owns a 20 MW solar generation facility located in Nevada, (5) Pacific Plains Wind Class A Holdings, LLC, which indirectly owns three wind generation facilities with a combined generating capacity of approximately 255 MW, located in Indiana, Nebraska and California and (6) Palomino Wind Holdings, LLC, which indirectly owns three wind generation facilities located in Kansas with a combined generating capacity of approximately 415 MW. The purchase price included approximately $1,275 million in cash consideration plus working capital of $29 million, and included the assumption of approximately $941 million in existing noncontrolling interests related to differential membership interests and $38 million of existing debt. NEP incurred approximately $1 million in acquisition-related costs during the year ended December 31, 2018 which are reflected in other - net in NEP's consolidated statements of income (loss).

Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed on December 20, 2018 based on their estimated fair value. All fair value measurements of assets acquired and liabilities assumed, including the noncontrolling interests, were based on significant estimates and assumptions, including Level 3 (unobservable) inputs, which require judgment. Estimates and assumptions include the projected timing and amount of future cash flows, discount rates reflecting risk inherent in future cash flows and future market prices. The amount by which the total net identifiable assets at fair value exceeded the total consideration transferred is reflected in other - net in NEP's consolidated statements of income (loss) during the year ended December 31, 2018.

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The following table summarizes the amounts recognized by NEP for the estimated fair value of assets acquired and liabilities assumed for the acquisition of NEP Renewables:

	As of December 20, 2018
	(millions)
Total consideration transferred	$	1,304
Identifiable assets acquired and liabilities assumed
Cash	$	17
Accounts receivable and prepaid expenses	25
Property, plant and equipment - net	1,675
Intangible assets – PPAs	610
Other non-current assets	13
Accounts payable, accrued expenses and other current liabilities	(13		)
Long-term debt, including current portion	(37		)
Other non-current liabilities	(38		)
Noncontrolling interests at fair value	(941		)
Total net identifiable assets, at fair value	$	1,311

The amounts of the NEP Renewables' revenues, operating income, net income and net income attributable to NEP included in NEP’s consolidated statements of income for the period from December 20, 2018 through December 31, 2018 were not material.

In June 2019, an indirect subsidiary of NEP completed the acquisition from NEER (June 2019 acquisition) of the following:

•	100% of the membership interests in Ashtabula Wind II, LLC, a project company that owns a 120 MW wind generation facility located in North Dakota;

•	100% of the membership interests in Garden Wind, LLC, a project company that owns a 150 MW wind generation facility (Story County II) located in Iowa;

•	100% of the membership interests in White Oak Energy Holdings, LLC, which owns 100% of the membership interests of White Oak Energy LLC, which owns a 150 MW wind generation facility located in Illinois;

•	100% of the Class C membership interests in Rosmar Holdings, LLC (Rosmar), which represents a 49.99% noncontrolling ownership interest in two solar generation facilities, Marshall and Roswell, with a total combined generating capacity of approximately 132 MW located in Minnesota and New Mexico, respectively; and

•	49.99% of the membership interests, representing a controlling ownership interest, in Silver State South Solar, LLC (Silver State), which indirectly owns a 250 MW solar generation facility located in Nevada.

 

NEER retained ownership interests in Rosmar and Silver State and remains the managing member of Rosmar. Thus, NEP's interest in Rosmar is reflected within investments in equity method investees on the consolidated balance sheets. NEER's remaining interest in Silver State is reflected within noncontrolling interests on the consolidated balance sheets (see Note 2 - Noncontrolling Interests).

 

The purchase price included approximately $1,020 million in cash consideration, plus working capital of $12 million. Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed on June 11, 2019 based on their estimated fair value. All fair value measurements of assets acquired and liabilities assumed were based on significant estimates and assumptions, including Level 3 (unobservable) inputs, which require judgment. Estimates and assumptions include the projected timing and amount of future cash flows, discount rates reflecting risk inherent in future cash flows and future market prices.

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The following table summarizes the preliminary amounts recognized by NEP for the estimated fair value of assets acquired and liabilities assumed in the June 2019 acquisition:

	As of June 11, 2019
	(millions)
Total consideration transferred	$	1,032
Identifiable assets acquired and liabilities assumed
Cash	$	4
Accounts receivable, other receivables and prepaid expenses	159
Property, plant and equipment – net	400
Intangible assets – PPAs	1,080
Goodwill	14
Other non-current assets	133
Accounts payable, accrued expenses and other current liabilities	(132		)
Other non-current liabilities	(154		)
Noncontrolling interest	(472		)
Total net identifiable assets, at fair value	$	1,032

During 2019, NEP recorded adjustments to the preliminary purchase price allocation based on a final valuation report which increased intangible assets - PPAs, goodwill and other non-current liabilities by approximately $30 million, $11 million and $1 million, respectively, and decreased property, plant and equipment - net and noncontrolling interests by $50 million and $10 million, respectively.

In November 2019, Meade Pipeline Investment, LLC (the Meade purchaser), an indirect subsidiary of NEP, completed the acquisition of all of the ownership interests in Meade Pipeline Co LLC (Meade), which owns an approximately 39.2% aggregate ownership interest in the Central Penn Line (CPL), a 185-mile natural gas pipeline that operates in Pennsylvania, and a 40% ownership interest in an expansion project of the gas pipeline. The purchase price included cash consideration of $1,280 million. NEP recorded an investment in equity method investee of approximately $1,296 million after adjusting for working capital, other closing items and direct acquisition costs. In addition, NEP expects to fund approximately $90 million of estimated future capital expenditures related to the expansion project. NEP's indirect ownership interest in Meade, including Meade's ownership interests in the CPL and the related expansion project, is reflected as investment in equity method investees. See Note 9.

Supplemental Unaudited Pro forma Results of Operations

NEP’s pro forma results of operations in the combined entity had the December 2018 acquisition of NEP Renewables been completed on January 1, 2017 are as follows:

	Years Ended December 31,
	2018				2017
	(millions)
Unaudited pro forma results of operations:
Pro forma revenues	$	878			$	892
Pro forma operating income	$	456			$	316
Pro forma net income	$	254			$	178
Pro forma net income (loss) attributable to NEP	$	219			$	(62	)

The unaudited pro forma consolidated results of operations include adjustments to:

•	reflect the historical results of NEP Renewables beginning on January 1, 2017;

•	reflect the estimated depreciation and amortization expense based on the estimated fair value of property, plant and equipment - net and the intangible assets - PPAs;

•	reflect allocations of income to noncontrolling interests related to the financing transaction to fund the acquisition; and

•	reflect related income tax effects.

The unaudited pro forma information is not necessarily indicative of the results of operations that would have occurred had the transaction been made at the beginning of the periods presented or the future results of the consolidated operations.

Revenue is recognized when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. NEP's operating revenues are

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generated primarily from various non-affiliated parties under PPAs and natural gas transportation agreements. NEP's operating revenues from contracts with customers are partly offset by the amortization of intangible assets - PPAs. Revenue is recognized as energy and any related renewable energy attributes are delivered, based on rates stipulated in the respective PPAs, or natural gas transportation services are performed. NEP believes that the obligation to deliver energy and provide the natural gas transportation services is satisfied over time as the customer simultaneously receives and consumes benefits provided by NEP. In addition, NEP believes that the obligation to deliver renewable energy attributes is satisfied at multiple points in time, with the control of the renewable energy attribute being transferred at the same time the related energy is delivered. Included in NEP’s operating revenues for the years ended December 31, 2019 and 2018 is revenue from contracts with customers for renewable energy sales of approximately $624 million and $513 million, respectively, and revenue from contracts with customers for natural gas transportation services of $207 million and $215 million, respectively. NEP's accounts receivable are primarily associated with revenues earned from contracts with customers. Receivables represent unconditional rights to consideration and reflect the differences in timing of revenue recognition and cash collections. For substantially all of NEP's receivables, regardless of the type of revenue transaction from which the receivable originated, customer and counterparty credit risk is managed in the same manner and the terms and conditions of payment are similar.

NEP recognizes revenues as energy and any related renewable energy attributes are delivered or natural gas transportation services are performed, consistent with the amounts billed to customers based on rates stipulated in the respective PPAs. NEP considers the amount billed to represent the value of energy delivered or services provided to the customer. NEP’s customers typically receive bills monthly with payment due within 30 days.

The contracts with customers related to pipeline service revenues contain a fixed price related to firm natural gas transportation capacity with maturity dates ranging from 2020 to 2035. At December 31, 2019, NEP expects to record approximately $2.1 billion of revenues over the remaining terms of the related contracts as the capacity is provided. Revenues yet to be earned under contracts with customers to deliver energy and any related energy attributes, which have maturity dates ranging from 2030 to 2046, will vary based on the volume of energy delivered. At December 31, 2019, NEP expects to record approximately $212 million of revenues related to the fixed price components of one PPA through 2039 as the energy is delivered.

On December 22, 2017, the Tax Cuts and Jobs Act (tax reform) was signed into law which, among other things, reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result, NEP performed an analysis to preliminarily revalue its deferred income taxes and included an estimate of changes in the balances in NEP's December 31, 2017 financial statements. At December 31, 2017, the revaluation reduced NEP’s net deferred income tax assets by approximately $100 million, which decreased NEP’s 2017 net income and net income attributable to NEP. At December 31, 2018, NEP had completed the accounting for all of the enactment-date income tax effects of tax reform resulting in no material adjustments in 2018 to the initial provisional amounts recorded. The U.S. Department of Treasury has also released proposed regulations related to the business interest expense limitations and foreign tax credits associated with tax reform. These proposed regulations are not final and are subject to change in the regulatory review process.

The components of income (loss) before income taxes are as follows:

	Years Ended December 31,
	2019				2018				2017
	(millions)
U.S.	$	(430	)		$	62			$	213
Foreign	—				211				68
Income (loss) before income taxes	$	(430	)		$	273			$	281

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The components of income tax expense (benefit) are as follows:

	Years Ended December 31,
	2019				2018				2017
	(millions)
Federal:
Current	$	—			$	4			$	—
Deferred	(20		)		47				143
Total federal	(20		)		51				143
State:
Current	—				(21		)		—
Deferred	(6		)		33				8
Total state	(6		)		12				8
Foreign:
Current	—				—				5
Deferred	—				(57		)		11
Total foreign	—				(57		)		16
Total income tax expense (benefit)	$	(26	)		$	6			$	167

A reconciliation of U.S. federal income tax at the statutory rate to the actual income taxes is as follows:

	Years Ended December 31,
	2019				2018				2017
	(millions)
Income tax expense (benefit) at U.S. statutory rate of 21%, 21% and 35%, respectively	$	(90	)		$	57			$	98
Increases (reductions) resulting from:
Taxes attributable to noncontrolling interests	70				(17		)		(32		)
Tax reform impact on differential membership interests	—				17				—
State income taxes, net of federal tax benefit	(5		)		10				6
Tax credits	(2		)		(1		)		(1		)
Valuation allowance	—				—				(1		)
Effect of flow through entities and foreign tax differential	—				3				(7		)
U.S. taxes on foreign earnings	—				3				7
Impact of tax reform	—				—				100
Adjustments associated with Canadian assets	—				(67		)		—
Other	1				1				(3		)
Income tax expense (benefit)	$	(26	)		$	6			$	167

The effective tax rate was approximately 6%, 2% and 59% for the years ended December 31, 2019, 2018 and 2017, respectively.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered. NEP believes that it is more likely than not that the deferred tax assets at December 31, 2019 shown in the table below, net of the valuation allowances, will be realized due to sufficient future income.

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The income tax effects of temporary differences giving rise to NEP's deferred income tax liabilities and assets are as follows:

	December 31,
	2019				2018
	(millions)
Deferred tax liabilities:
Investment in partnership(a)	$	(98	)		$	(133	)
Total deferred tax liabilities	(98		)		(133		)
Deferred tax asset:
Net operating loss	256				228
Tax credit carryforwards	6				3
Valuation allowance	(2		)		(2		)
Total deferred tax asset	260				229
Net deferred tax asset	$	162			$	96

____________________

(a) At December 31, 2019, includes a deferred tax asset of approximately $17 million of interest limitation carryforward with an indefinite expiration period.

Deferred tax assets and liabilities included on NEP's consolidated balance sheets are as follows:

	December 31,
	2019				2018
	(millions)
Deferred income taxes - assets	$	172			$	108
Other non-current liabilities	(10		)		(12		)
Net deferred income taxes	$	162			$	96

The components of deferred tax assets, before valuation allowance, relating to net operating loss carryforwards and tax credit carryforwards at December 31, 2019 are as follows:

	Amount				Expiration Dates
	(millions)
Net operating loss carryforwards:
Federal	$	233			2034 - 2037
State	23				2034 - 2039
Total net operating loss carryforwards	$	256		(a)
Tax credit carryforwards	$	6			2020 - 2039

____________________

(a) Includes approximately $79 million of net operating loss carryforwards with an indefinite expiration period.

The open tax years in all jurisdictions are 2014 through 2018.

The fair value of assets and liabilities are determined using either unadjusted quoted prices in active markets (Level 1) or pricing inputs that are observable (Level 2) whenever that information is available and using unobservable inputs (Level 3) to estimate fair value only when relevant observable inputs are not available. NEP uses several different valuation techniques to measure the fair value of assets and liabilities, relying primarily on the market approach of using prices and other market information for identical and/or comparable assets and liabilities for those assets and liabilities that are measured at fair value on a recurring basis. Certain financial instruments may be valued using multiple inputs including discount rates, counterparty credit ratings and credit enhancements. NEP’s assessment of the significance of any particular input to the fair value measurement requires judgment and may affect the placement of those assets and liabilities within the fair value hierarchy levels. Non-performance risk, including the consideration of a credit valuation adjustment, is also considered in the determination of fair value for all assets and liabilities measured at fair value. Transfers between fair value hierarchy levels occur at the beginning of the period in which the transfer occurred.

Cash Equivalents and Restricted Cash Equivalents - The fair value of money market funds that are included in cash and cash equivalents, other current assets and other non-current assets on NEP's consolidated balance sheets is estimated using a market approach based on current observable market prices.

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Interest Rate Contracts - NEP estimates the fair value of its derivatives using an income approach based on a discounted cash flows valuation technique utilizing the net amount of estimated future cash inflows and outflows related to the agreements. The primary inputs used in the fair value measurements include the contractual terms of the derivative agreements, current interest rates and credit profiles. The significant inputs for the resulting fair value measurement are market-observable inputs and the measurements are reported as Level 2 in the fair value hierarchy.

NEP’s financial assets and liabilities and other fair value measurements made on a recurring basis by fair value hierarchy level are as follows:

	December 31, 2019												December 31, 2018
	Level 1				Level 2				Total				Level 1				Level 2				Total
	(millions)
Assets:
Cash equivalents	$	16			$	—			$	16			$	71			$	—			$	71
Restricted cash equivalents(a)	—				—				—				12				—				12
Interest rate contracts	—				9				9				—				24				24
Total assets	$	16			$	9			$	25			$	83			$	24			$	107
Liabilities:
Interest rate contracts	$	—			$	427			$	427			$	—			$	116			$	116
Total liabilities	$	—			$	427			$	427			$	—			$	116			$	116

____________________

(a)	At December 31, 2018, approximately $9 million of restricted cash equivalents are included in other non-current assets on NEP's consolidated balance sheets.

Financial Instruments Recorded at Other than Fair Value - The carrying amounts and estimated fair values of other financial instruments recorded at other than fair value are as follows:

	December 31, 2019								December 31, 2018
	Carrying Value				Fair Value				Carrying Value				Fair Value
	(millions)
Long-term debt, including current maturities(a)	$	4,144			$	4,235			$	3,435			$	3,301

____________________

(a)

At December 31, 2019 and December 31, 2018, approximately $4,211 million and $2,826 million respectively, of the fair value is estimated using a market approach based on quoted market prices for the same or similar issues (Level 2); the balance is estimated using an income approach utilizing a discounted cash flow valuation technique, considering the current credit profile of the debtor (Level 3).

NEP uses derivative instruments (primarily interest rate swaps) to manage the interest rate cash flow risk associated with outstanding and expected future debt issuances and borrowings. NEP records all derivative instruments that are required to be marked to market as either assets or liabilities on its consolidated balance sheets and measures them at fair value each reporting period. NEP does not utilize hedge accounting for its derivatives. All changes in the derivatives' fair value are recognized in interest expense in NEP's consolidated statements of income (loss). At December 31, 2019 and 2018, the net notional amounts of the interest rate contracts were approximately $6,859 million and $7,056 million, respectively.

During 2019, NEP reclassified approximately $6 million from AOCI to interest expense primarily because the related future transactions being hedged were no longer going to occur. At December 31, 2019, NEP's AOCI does not include any amounts related to discontinued cash flow hedges. Cash flows from the interest rate swap contracts are reported in cash flows from operating activities in NEP's consolidated statements of cash flows.

Prior to the sale of Canadian Holdings, NEP entered into certain foreign currency exchange contracts to economically hedge its cash flows from foreign currency rate fluctuations. During 2018 and 2017, NEP recorded approximately $13 million of gains and $4 million of losses, respectively, related to the foreign currency contracts in other - net in NEP's consolidated statements of income (loss).

Fair Value of Derivative Instruments - The tables below present NEP's gross derivative positions, based on the total fair value of each derivative instrument, at December 31, 2019 and 2018, as required by disclosure rules, as well as the location of the net derivative positions, based on the expected timing of future payments, on NEP's consolidated balance sheets.

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	December 31, 2019
		Gross Basis								Net Basis
		Assets				Liabilities				Assets				Liabilities
	(millions)
Interest rate contracts		$	9			$	427			$	—			$	418
Net fair value by balance sheet line item:
Other current assets										$	—
Other non-current assets										—
Other current liabilities														$	1
Derivatives														417
Total derivatives										$	—			$	418

	December 31, 2018
		Gross Basis								Net Basis
		Assets				Liabilities				Assets				Liabilities
	(millions)
Interest rate contracts		$	24			$	116			$	13			$	105
Net fair value by balance sheet line item:
Other current assets										$	7
Other non-current assets										6
Other current liabilities														$	1
Derivatives														104
Total derivatives										$	13			$	105

Financial Statement Impact of Derivative Instruments - Gains (losses) related to NEP's interest rate contracts are recorded in NEP's consolidated financial statements as follows:

	Years Ended December 31,
	2019				2018				2017
	(millions)
Interest rate contracts:
Gains (losses) reclassified from AOCI to interest expense	$	5			$	(3	)		$	(7	)
Losses recognized in interest expense	$	(373	)		$	(58	)		$	(14	)

Credit-Risk-Related Contingent Features - Certain of NEP's derivative instruments contain credit-related cross-default and material adverse change triggers, none of which contain requirements to maintain certain credit ratings or financial ratios. At December 31, 2019 and 2018, the aggregate fair value of NEP's derivative instruments with contingent risk features that were in a liability position was approximately $420 million and $108 million, respectively.

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Property, plant and equipment consists of the following at December 31:

	2019				2018				Range of Useful Lives (in years)
	(millions)
Power-generation assets(a)	$	6,553			$	6,262			3 - 35
Pipeline assets, including temporary rights-of-way	813				810				25 - 50
Land improvements and buildings	385				362				7 - 35
Land, including perpetual rights-of-way	60				60
Construction work in progress	80				5
Other depreciable assets	279				237				3 - 35
Property, plant and equipment, gross	8,170				7,736
Accumulated depreciation	(1,200		)		(966		)
Property, plant and equipment - net	$	6,970			$	6,770

^{___________________________} 

(a)	Approximately 87% of power generation assets represent machinery and equipment used to generate electricity with a 35-year depreciable life.

Depreciation expense for the years ended December 31, 2019, 2018 and 2017 was approximately $236 million, $199 million and $204 million, respectively. A number of NEP's generation and pipeline facilities are encumbered by liens securing various financings. The net book value of NEP's assets serving as collateral was approximately $3.6 billion at December 31, 2019.

At December 31, 2019, investments in equity method investees primarily includes the approximately 50% ownership interest in Desert Sunlight's solar projects, approximately 50% ownership interest in Rosmar, and the ownership interest in Meade, including Meade's ownership interest in the CPL and related expansion project described in Note 3. NEP is not the primary beneficiary and therefore does not consolidate these entities because it does not control any of the ongoing activities of these entities, was not involved in the initial design of these entities and does not have controlling interests in these entities.

Summarized information for these equity method investees is as follows:

	2019				2018				2017
	(millions)
Revenues	$	213			$	208			$	207
Operating income	$	124			$	129			$	127
Net income(a)	$	67			$	84			$	80

________________________

(a) Includes the earnings from equity method investee related to Meade's ownership interest in CPL and the related expansion subsequent to the Meade acquisition in November 2019.

	December 31, 2019				December 31, 2018
	(millions)
Current assets	$	211			$	133
Non-current assets(a)	$	2,853			$	1,298
Current liabilities(b)	$	545			$	561
Non-current liabilities	$	497			$	459
NEP's share of underlying equity in the equity method investees	$	1,668			$	206
Difference between investment carrying amounts and underlying equity in net assets(c)	(15		)		8
NEP's investment carrying amounts	$	1,653			$	214

________________________

(a)	For 2019, includes the equity method investment related to Meade's ownership interests in the CPL and the related expansion project.

(b)	At December 31, 2019 and 2018, approximately $479 million and $503 million, respectively, of long-term debt is reflected as current liabilities as a result of being notified by the lender of an event of default under the related financing agreement. See Note 15 - PG&E Bankruptcy.

(c)	Substantially all of the difference between the investment carrying amount and the underlying equity in net assets is being amortized over the life of the related projects.

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NEP has identified NEP OpCo, a limited partnership with a general partner and limited partners, as a VIE. NEP has consolidated the results of NEP OpCo and its subsidiaries because of its controlling interest in the general partner of NEP OpCo. At December 31, 2019, NEP owned an approximately 39.2% limited partner interest in NEP OpCo and NEE Equity owned a noncontrolling 60.8% limited partner interest in NEP OpCo. The assets and liabilities of NEP OpCo as well as the operations of NEP OpCo represent substantially all of NEP's assets and liabilities and its operations.

In addition, at December 31, 2019, NEP OpCo consolidated 12 VIEs related to certain subsidiaries which have sold differential membership interests (see Note 2 - Noncontrolling Interests) in entities which own and operate 20 wind electric generation facilities. These entities are considered VIEs because the holders of the differential membership interests do not have substantive rights over the significant activities of these entities. The assets, primarily property, plant and equipment - net, and liabilities, primarily asset retirement obligation and non-current due to related party, of the VIEs, totaled approximately $4,814 million and $122 million, respectively, at December 31, 2019, and $4,937 million and $132 million, respectively, at December 31, 2018.

At December 31, 2019, NEP OpCo also consolidated four VIEs related to the sales of noncontrolling Class B interests in certain NEP subsidiaries. See Note 2 - Noncontrolling Interests and Note 11 - Equity. These entities are considered VIEs because the holders of the noncontrolling Class B interests do not have substantive rights over the significant activities of the entities. The assets, primarily property, plant and equipment - net and intangible assets - PPAs, and the liabilities, primarily long-term debt, other long-term liabilities and asset retirement obligation, of the VIEs totaled approximately $7,900 million and $1,448 million, respectively, at December 31, 2019. The assets, primarily property, plant and equipment - net, and the liabilities, primarily long-term debt and asset retirement obligation, of the VIEs totaled approximately $2,339 million and $89 million, respectively, at December 31, 2018. Certain of these VIEs include three other VIEs related to NEP's ownership interests in Rosmar, Silver State and Meade (see Note 3). In addition, certain of these VIEs contain entities which have sold differential membership interests and approximately $2,122 million and $2,183 million of assets and $53 million and $55 million of liabilities are also included in the disclosure of the VIEs related to differential membership interests at December 31, 2019 and 2018, respectively.

NEP has an indirect equity method investment in three NEER solar projects with a total generating capacity of 277 MW. Through a series of transactions, a subsidiary of NEP issued 1,000,000 NEP OpCo Class B Units, Series 1 and 1,000,000 NEP OpCo Class B Units, Series 2, to NEER for approximately 50% of the ownership interests in the three solar projects (non-economic ownership interests). NEER, as holder of the NEP OpCo Class B Units, will retain 100% of the economic rights in the projects to which the respective Class B Units relate, including the right to all distributions paid by the project subsidiaries that own the projects to NEP OpCo. NEER has agreed to indemnify NEP against all risks relating to NEP’s ownership of the projects until NEER offers to sell economic interests to NEP and NEP accepts such offer, if NEP chooses to do so. NEER has also agreed to continue to manage the operation of the projects at its own cost, and to contribute to the projects any capital necessary for the operation of the projects, until NEER offers to sell economic interests to NEP and NEP accepts such offer. At December 31, 2019 and 2018, NEP's equity method investment related to the non-economic ownership interests of approximately $11 million and $20 million, respectively, is reflected as other non-current assets and, at December 31, 2019, $7 million is reflected as other non-current liabilities on NEP's consolidated balance sheets. All equity in earnings of the non-economic ownership interests is allocated to net income attributable to noncontrolling interests. NEP is not the primary beneficiary and therefore does not consolidate these entities because it does not control any of the ongoing activities of these entities, was not involved in the initial design of these entities and does not have a controlling interest in these entities.

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Debt - NEP’s long-term debt agreements require monthly, quarterly or semi-annual payments of interest. Principal payments on the senior secured limited-recourse debt is primarily due monthly or semi-annually. The carrying value of NEP’s long-term debt consists of the following:

			December 31,
			2019							2018
	Maturity Date		Balance				Weighted-Average Interest Rate			Balance				Weighted-Average Interest Rate
			(millions)							(millions)
NEP:
Senior unsecured convertible notes - fixed(a)	2020		$	300			1.50	%		$	300			1.50	%
NEP OpCo:
Senior unsecured notes - fixed(b)	2024 - 2027		2,300				4.23	%		$	1,100			4.38	%
Revolving credit facility - variable(a)(c)	2024		510				3.35	%		—
Project level:
Senior secured limited-recourse debt - fixed	2033		25				4.52	%		985				5.16	%
Senior secured limited-recourse debt - variable(c)(d)	2026 - 2032		859				3.38	%		269				4.43	%
Bank loan(c)	2023		205				3.46	%		200				4.76	%
Non-recourse notes payable - fixed			—							20				6.30	%
Limited-recourse term loan - variable(c)(d)			—							604				4.93	%
Unamortized debt issuance costs			(55		)					(45		)
Unamortized premium			—							2
Total long-term debt			4,144							3,435
Less current portion of long-term debt(e)			12							707
Long-term debt, excluding current portion			$	4,132						$	2,728

________________________

(a)	See additional discussion of the convertible notes and the NEP OpCo credit facility below.

(b)	The NEP OpCo senior unsecured notes are absolutely and unconditionally guaranteed, on a senior unsecured basis, by NEP and a subsidiary of NEP OpCo.

(c)	Variable rate is based on an underlying index plus a margin.

(d)	Interest rate contracts, primarily swaps, have been entered into for a majority of these debt issuances. See Note 7.

(e)	At December 31, 2018, included approximately $641 million of principal with final maturity dates ranging from 2033 - 2038, net of the related unamortized debt issuance costs, which was reclassified to current debt as a result of events of default under the related financing agreements. See Note 15 - PG&E Bankruptcy.

Minimum annual maturities of long-term debt are approximately $312 million, $12 million, $14 million, $220 million and $1,776 million for 2020, 2021, 2022, 2023 and 2024, respectively.

NEP OpCo and its direct subsidiary (loan parties) are parties to a variable rate, senior secured revolving credit facility (NEP OpCo credit facility). At December 31, 2019, the NEP OpCo credit facility provided up to $1.25 billion of revolving credit loans and included borrowing capacity of up to $400 million for letters of credit and incremental commitments to increase the NEP OpCo credit facility to up to $2.0 billion in the aggregate, subject to certain conditions. Borrowings under the NEP OpCo credit facility can be used by the loan parties to fund working capital and expansion projects, to make acquisitions and for general business purposes. The NEP OpCo credit facility is subject to a facility fee ranging from 0.20% to 0.35% per annum depending on NEP OpCo's leverage ratio (as defined in the NEP OpCo credit facility). At December 31, 2019, approximately $122 million of letters of credit were issued under the NEP OpCo credit facility primarily related to debt service reserves and as security for certain financing agreements of NEP OpCo's subsidiaries. In February 2020, the loan parties extended the maturity date of the NEP OpCo credit facility to 2025 and borrowed $50 million under the NEP OpCo credit facility.

At December 31, 2019, the Meade purchaser and Pipeline Investment Holdings, LLC (Meade Holdings) are parties to a credit agreement (Meade credit agreement) which provides up to $915 million under three limited-recourse senior secured variable rate term loans maturing in 2026 to finance a portion of the Meade acquisition and the expansion (see Note 3). Approximately $816 million was borrowed simultaneously with the closing of the Meade acquisition and the remaining amount available under the credit agreement is expected to be borrowed regularly through the completion of the expansion. At December 31, 2019, approximately $90 million remains available under the Meade credit agreement.

In addition, at December 31, 2019, South Texas Midstream Holdings, LLC (STX Holdings) is party to a credit agreement which provides up to $270 million under a revolving credit facility (STX Holdings revolving credit facility). Proceeds from any borrowings under the STX Holdings revolving credit facility are available exclusively to fund the cash portion of NEP's repurchase, if any, of the Class B noncontrolling interests related to STX Midstream (see discussion below), subject to certain limitations.

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The long-term debt agreements listed above contain default and related acceleration provisions relating to the failure to make required payments or to observe other covenants in the respective financing agreements and related documents including financial covenants primarily related to debt service coverage ratios, as well as a maximum leverage ratio and a minimum interest coverage ratio. Additionally, under the NEP OpCo credit facility, NEP OpCo and its direct subsidiary are required to comply with certain financial covenants on a quarterly basis and NEP OpCo's ability to pay cash distributions is subject to certain other restrictions. All borrowings under the NEP OpCo credit facility and the NEP OpCo senior unsecured notes are guaranteed by NEP OpCo and NEP.

The NEP OpCo credit facility contains various covenants and restrictive provisions that limit NEP OpCo’s ability to, among other things:

•incur or guarantee additional debt;

•make distributions on or redeem or repurchase common units;

•make certain investments and acquisitions;

•incur certain liens or permit them to exist;

•enter into certain types of transactions with affiliates;

•merge or consolidate with another company; and

•transfer, sell or otherwise dispose of projects.

The long-term debt agreements listed above all contain provisions which, under certain conditions, restrict the payment of dividends and other distributions. At December 31, 2019, NEP and its subsidiaries were in compliance with all financial debt covenants under their respective financing agreements except as discussed in Note 15 - PG&E Bankruptcy.

The $300 million senior unsecured convertible notes (convertible notes) are unsecured obligations of NEP and are absolutely and unconditionally guaranteed, on a senior unsecured basis, by NEP OpCo. A holder may convert all or a portion of its notes into NEP common units and cash in lieu of any fractional common unit at the conversion rate. At December 31, 2019, the conversion rate, subject to certain adjustments, was 18.9170 NEP common units per $1,000 principal amount of the convertible notes, which rate is equivalent to a conversion price of approximately $52.8625 per NEP common unit. Upon the occurrence of a fundamental change (as defined in the related indenture), holders of the convertible notes may require NEP to repurchase all or a portion of their convertible notes for cash in an amount equal to the principal amount of the convertible notes to be repurchased, plus accrued and unpaid interest, if any. The convertible notes are not redeemable at NEP’s option prior to maturity.

NEP entered into a capped call transaction (capped call) in connection with the issuance of the convertible notes. Under the capped call, NEP purchased capped call options with a strike price of $52.8625 and a cap price of $63.4350. The capped call was purchased for approximately $12 million, which was recorded as a reduction to common units equity on NEP's consolidated balance sheets. If, upon conversion of the convertible notes, the price per NEP common unit during the relevant settlement period is above the strike price, there would generally be a payment to NEP (if NEP elects to cash settle) or an offset of potential dilution to NEP's common units (if NEP elects to settle in NEP common units).

Equity - In November 2017, NEP issued and sold 14,021,561 Series A convertible preferred units representing limited partner interests in NEP (preferred units) for an aggregate purchase price of approximately $550 million. NEP contributed the proceeds to NEP OpCo in exchange for an equivalent number of a new series of NEP OpCo preferred units with economically equivalent rights to the preferred units. In both July 2019 and November 2019, NEP converted approximately 4,673,852 Series A convertible preferred units into NEP common units on a one-for-one basis.

The preferred units are a class of securities that rank senior to the common units representing limited partner interests in NEP. The preferred units will vote on an as-converted basis with the common units and have certain class voting rights with respect to amendments that adversely affect their distribution, liquidation or conversion rights, their ranking or certain other protections under the NEP partnership agreement.

Holders of the preferred units will receive cumulative quarterly distributions equal to $0.4413 per unit for quarters ending on or before November 15, 2020, which was prorated for the fourth quarter of 2017 and which may be paid, at NEP’s election, in cash, in kind or a combination thereof. For quarters ending after November 15, 2020, holders will receive cumulative quarterly distributions equal to the greater of $0.4413 per unit and the amount that the preferred units would have received if they had converted into common units at the then-applicable conversion rate (defined below), and NEP may elect to pay up to 1/9th of the subsequent distribution period amounts in kind. The quarterly distribution amount and portion of the distribution that may be paid in kind will be prorated for the fourth quarter of 2020. If NEP fails to pay a distribution during a subsequent distribution period, NEP would be unable to pay any distributions on or redeem or repurchase any junior securities, including the common units, prior to paying the unpaid cash component of the quarterly distribution, including any previously accrued and unpaid cash distributions. 

Each holder of preferred units (together with its affiliates) may elect to convert all or any portion of its preferred units into common units initially on a one-for-one basis, subject to customary adjustments and an adjustment for any distributions that have accrued but have not been paid when due (the conversion rate), at any time after June 20, 2019, subject to certain conditions. NEP may

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elect to convert all or a portion of the preferred units into common units based on the conversion rate at any time after November 15, 2018 if certain conditions, including specific common unit price and trading volume conditions, are met and subject to certain maximum conversion amounts prior to November 2020 under the purchase agreement. In addition, certain change of control events, as specified in the NEP partnership agreement, will result in, or provide holders of the preferred units with the right to elect, conversion of preferred units to common units (or substantially equivalent securities of a surviving entity) or redemption of the preferred units, with such redemption to be paid in cash or common units at NEP's discretion. Beginning January 1, 2021, NEP will give the purchasers certain rights to require NEP, under certain circumstances, to initiate underwritten offerings for the common units that are issuable upon conversion of the preferred units.

During 2019, 2018 and 2017, NEP distributed approximately $115 million, $94 million and $81 million, respectively, to its common unitholders. In addition, NEP paid approximately $35 million in distributions to its common unitholders and $2 million in distributions to its preferred unitholders in February 2020.

During 2019 and 2018, subsidiaries of NEP sold Class B noncontrolling membership interests in NEP Renewables, NEP Renewables II, NEP Pipelines and STX Midstream as described below:

	NEP Renewables		NEP Renewables II		NEP Pipelines		STX Midstream
Underlying projects/pipelines	Renewable energy projects with a combined generating capacity of approximately 1,388 MW		Renewable energy projects with a combined net generating capacity of approximately 611 MW		Equity method interest in a natural gas pipeline located in Pennsylvania		Seven natural gas pipeline assets located in Texas
Date of sale	December 21, 2018		June 11, 2019		November 13, 2019		December 4, 2019
Gross proceeds	$750 million		$900 million		$168 million		$750 million
Initial allocation of distributable cash to Class B investor	15%		5%		1%		12.5%
Period for initial allocation	3 years		6 years		6 years		4 years
Period for initial allocation if minimum buyouts have not occurred	n/a		4.5 years		5 years		3.5 years
Allocation of distributable cash to Class B investor after initial allocation period	80%		99%		99%		75%(a)
Date buyout period begins	December 21, 2021		December 11, 2022		May 13, 2023		December 4, 2022
Buyout right timing	One time during year 4		Periodically, and for partial interests between years 3.5 and 6(b)		Periodically, and for partial interests between years 3.5 and 6.5(b)		Periodically, and for partial interests between years 3 and 7(b)
Percentage of buyout price that can be paid in NEP non-voting common units at current market price(c)	70%		70%		100%		70%
Date registration rights begin	January 1, 2025		January 1, 2025		Date of first buyout notice		January 1, 2023

________________

(a)	Increases to 95% if NEP has not exercised its entire buyout right by December 4, 2025.

(b)	The buyout right is subject to certain limitations, including NEP being able to purchase a maximum of the Class B units at certain anniversaries specified in the agreement.

(c)	The NEP non-voting common units will have the right to receive pro rata quarterly cash distributions and rights to convert, subject to certain limitation, the NEP non-voting common units into NEP common units on a one-for-one basis. The specified percentage of the buyout price for the Class B noncontrolling interests in STX Midstream are payable in NEP common units.

In 2015, NEP established an at-the-market equity issuance program (ATM program) pursuant to which NEP could issue, from time to time, up to $150 million of its common units, giving NEP the flexibility to issue new units when the price is acceptable. In July 2018, NEP implemented a $150 million ATM program which replaced its prior program. During the year ended December 31, 2018, NEP issued approximately 1.8 million common units under the ATM program for gross proceeds of approximately $86 million. During the years ended December 31, 2019 and 2017, NEP did not issue any common units under the ATM program. Fees related to the ATM program totaled approximately $1 million in 2018.

Earnings Per Unit - Diluted earnings per unit are based on the weighted-average number of common units and potential common units outstanding during the period, including the dilutive effect of the convertible notes and preferred units. The dilutive effect of the convertible notes and preferred units is computed using the if-converted method.

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The reconciliation of NEP's basic and diluted earnings (loss) per unit is as follows:

		Years Ended December 31,
		2019				2018				2017
	(millions, except per unit data)
Numerator:
Net income (loss) attributable to NEP – basic		$	(88	)		$	167			$	(64	)
Adjustments for convertible notes and preferred units(a)		—				50				—
Net income (loss) attributable to NEP used to compute diluted earnings per unit		$	(88	)		$	217			$	(64	)
Denominator:
Weighted-average number of common units outstanding – basic		58.8				54.9				54.2
Effect of dilutive convertible notes and preferred units(a)		—				19.7				—
Weighted-average number of common units outstanding and assumed conversions		58.8				74.6				54.2
Earnings (loss) per unit attributable to NEP:
Basic		$	(1.51	)		$	3.05			$	(1.18	)
Assuming dilution		$	(1.51	)		$	2.91			$	(1.18	)

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(a) Due to the net losses incurred during the years ended December 31, 2019 and 2017, the weighted-average number of common units issuable pursuant to the convertible notes and preferred units totaling approximately 17.0 million and 3.6 million, respectively, were not included in the calculation of diluted earnings per unit due to their antidilutive effect.

	Accumulated Other Comprehensive Income (Loss)
	Net Unrealized Gains (Losses) on Cash Flow Hedges					Net Unrealized Gains (Losses) on Foreign Currency Translation					Other Comprehensive Income (Loss) Related to Equity Method Investee					Total
	(millions)
Balances, December 31, 2016	$	(4		)		$	(105		)		$	(35		)		$	(144		)
Other comprehensive income before reclassification	—					7					—					7
Amounts reclassified from AOCI to interest expense	5					—					—					5
Other comprehensive income related to equity method investee	—					—					5					5
Net other comprehensive income	5					7					5					17
Balances, December 31, 2017	1					(98			)		(30			)		(127			)
Other comprehensive income before reclassification	—					(6			)		—					(6			)
Amounts reclassified from AOCI to interest expense	2					—					—					2
Other comprehensive income related to equity method investee	—					—					6					6
Net other comprehensive income (loss)	2					(6			)		6					2
Impact of disposal of Canadian Holdings	3					104					—					107
Balances, December 31, 2018	6					—					(24			)		(18			)
Amounts reclassified from AOCI to interest expense	(6			)		—					—					(6			)
Other comprehensive income related to equity method investee	—					—					2					2
Net other comprehensive income (loss)	(6			)		—					2					(4			)
Balances, December 31, 2019	$	—				$	—				$	(22		)		$	(22		)
AOCI attributable to noncontrolling interest	$	—				$	—				$	(14		)		$	(14		)
AOCI attributable to NextEra Energy Partners, December 31, 2019	$	—				$	—				$	(8		)		$	(8		)

Each project entered into O&M and administrative services agreements (ASAs) with subsidiaries of NEER whereby the projects pay a certain annual fee plus actual costs incurred in connection with certain O&M and administrative services performed under these agreements. These services are reflected as operations and maintenance in NEP's consolidated statements of income (loss). Additionally, a NEP subsidiary pays an affiliate for transmission services which are reflected as operations and maintenance in NEP's consolidated statements of income (loss). Certain projects have also entered into various types of agreements including those related to shared facilities and transmission lines, transmission line easements, technical support and construction coordination with subsidiaries of NEER whereby certain fees or cost reimbursements are paid to, or received by, certain subsidiaries of NEER.

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Management Services Agreement (MSA) - Under the MSA, an indirect wholly owned subsidiary of NEE provides operational, management and administrative services to NEP, including managing NEP’s day-to-day affairs and providing individuals to act as NEP’s executive officers and directors, in addition to those services that are provided under the existing O&M agreements and ASAs described above between NEER subsidiaries and NEP subsidiaries. NEP OpCo pays NEE an annual management fee equal to the greater of 1% of the sum of NEP OpCo’s net income plus interest expense, income tax expense and depreciation and amortization expense less certain non-cash, non-recurring items for the most recently ended fiscal year and $4 million (as adjusted for inflation beginning in 2016), which is paid in quarterly installments with an additional payment each January to the extent 1% of the sum of NEP OpCo’s net income plus interest expense, income tax expense and depreciation and amortization expense less certain non-cash, non-recurring items for the preceding fiscal year exceeds $4 million (as adjusted for inflation beginning in 2016). NEP OpCo also makes certain payments to NEE based on the achievement by NEP OpCo of certain target quarterly distribution levels to its unitholders. NEP’s O&M expenses for the years ended December 31, 2019, 2018 and 2017 include approximately $93 million, $78 million and $67 million, respectively, related to the MSA.

Cash Sweep and Credit Support Agreement (CSCS agreement) - NEP OpCo is a party to the CSCS agreement with NEER under which NEER and certain of its affiliates provide credit support in the form of letters of credit and guarantees to satisfy NEP’s subsidiaries’ contractual obligations. NEP OpCo pays NEER an annual credit support fee based on the level and cost of the credit support provided, payable in quarterly installments. NEP’s O&M expenses for the years ended December 31, 2019, 2018 and 2017 include approximately $6 million, $4 million and $4 million, respectively, related to the CSCS agreement.

NEER and certain of its affiliates may withdraw funds (Project Sweeps) received by NEP OpCo under the CSCS agreement, or its subsidiaries in connection with certain long-term debt agreements, and hold those funds in accounts belonging to NEER or its affiliates to the extent the funds are not required to pay project costs or otherwise required to be maintained by NEP's subsidiaries. NEER and its affiliates may keep the funds until the financing agreements permit distributions to be made, or, in the case of NEP OpCo, until such funds are required to make distributions or to pay expenses or other operating costs or NEP OpCo otherwise demands the return of such funds. If NEER or its affiliates fail to return withdrawn funds when required by NEP's subsidiaries’ financing agreements, the lenders will be entitled to draw on any credit support provided by NEER or its affiliates in the amount of such withdrawn funds. If NEER or one of its affiliates realizes any earnings on the withdrawn funds prior to the return of such funds, it will be permitted to retain those earnings. At December 31, 2019 and 2018, the cash sweep amounts held in accounts belonging to NEER or its affiliates were approximately $12 million and $66 million, respectively, and are included in due from related parties on NEP’s consolidated balance sheets.

Guarantees and Letters of Credit Entered into by Related Parties - Certain PPAs include requirements of the project entities to meet certain performance obligations. NextEra Energy Capital Holdings, Inc. (NEECH) or NEER has provided letters of credit or guarantees for certain of these performance obligations and payment of any obligations from the transactions contemplated by the PPAs. In addition, certain financing agreements require cash and cash equivalents to be reserved for various purposes. In accordance with the terms of these financing agreements, guarantees from NEECH have been substituted in place of these cash and cash equivalents reserve requirements. Also, under certain financing agreements, indemnifications have been provided by NEECH. In addition, certain interconnection agreements and site certificates require letters of credit or a surety bond to secure certain payment or restoration obligations related to those agreements. NEECH also guarantees the Project Sweep amounts held in accounts belonging to NEER as described above. At December 31, 2019, NEECH or NEER guaranteed or provided indemnifications, letters of credit or surety bonds totaling approximately $658 million related to these obligations. Agreements related to the sale of differential membership interests require NEER to guarantee payments due by the VIEs and the indemnifications to the VIEs' respective investors. At December 31, 2019, NEER guaranteed a total of approximately $11 million related to these obligations.

Due to Related Party - Non-current amounts due to related party on NEP's consolidated balance sheets primarily represent amounts owed by certain of NEP's wind projects to NEER to refund NEER for certain transmission costs paid on behalf of the wind projects. Amounts will be paid to NEER as the wind projects receive payments from third parties for related notes receivable recorded in other non-current assets on NEP’s consolidated balance sheets.

Transportation and Fuel Management Agreements - A subsidiary of NEP assigned to a subsidiary of NEER certain gas commodity agreements in exchange for entering into transportation agreements and a fuel management agreement whereby the benefits of the gas commodity agreements (net of transportation paid to the NEP subsidiary) are passed back to the NEP subsidiary. During the years ended December 31, 2019, 2018 and 2017, NEP recognized approximately $7 million, $7 million and $9 million, respectively, in revenues related to the transportation and fuel management agreements.

Related Party Note Receivable - As part of the 2016 acquisition from NEER of Seiling Wind Investments, LLC, a subsidiary of NEP acquired an approximately $25 million receivable from a subsidiary of NEER (Seiling related party note receivable) relating to operational performance issues at this facility. The Seiling related party note receivable is intended to compensate NEP for the operational performance issues and is supported in full by compensation expected from an equipment vendor under an undertaking the vendor has with NEER. This receivable bears interest at 7.1% per annum, is payable by NEER in equal semi-annual installments and matures in December 2035. During each of the years ended December 31, 2019, 2018 and 2017, NEP received payments of approximately $2 million. The Seiling related party note receivable, interest and related payments are reflected in noncontrolling interests on NEP's consolidated financial statements.

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NEP has operating leases primarily related to land use agreements for certain of its renewable energy projects. At December 31, 2019 and 2018, NEP had recorded ROU assets of approximately $43 million and $24 million, respectively, and $41 million and $24 million of operating lease liabilities, respectively. NEP’s operating lease liabilities were calculated based on a weighted average discount rate of 4.52% and 4.46% based on the incremental borrowing rate at the lease commencement date and have a weighted-average remaining lease term of 25 years and 25 years, at December 31, 2019 and 2018, respectively. Lease payments under the land use agreements, which convey exclusive use of the land during the arrangement, are either fixed based on the terms of the related lease agreement or variable primarily based on the amount of generation at the renewable energy project. NEP’s operating leases with fixed payments have expiration dates ranging from 2022 to 2046. NEP recognized approximately $3 million, $2 million, and $2 million in 2019, 2018 and 2017, respectively, of operating lease costs associated with its ROU assets and which are included in O&M expenses in NEP’s consolidated statements of income (loss). In addition, approximately $7 million, $5 million and $5 million was recorded related to variable lease costs in 2019, 2018 and 2017, respectively. Short-term lease expense, which is included in O&M expenses, was not material to NEP’s consolidated statements of income (loss) for the periods presented. At December 31, 2019, NEP's lease agreements call for fixed payments of approximately $3 million annually over the next five years and $56 million thereafter.

Development, Engineering and Construction Commitments - At December 31, 2019, indirect subsidiaries of NEP had several engineering, procurement and construction contracts and a funding commitment related to the repowering of certain wind facilities and expansion projects at certain pipelines. Those contracts have varying payment terms and some include performance obligations that allow the NEP subsidiaries to receive liquidated damages if the contractor does not perform. As of December 31, 2019, the NEP subsidiaries had purchased approximately $54 million under these contracts, of which $36 million was purchased from NEER. Such costs primarily have been capitalized in property, plant and equipment - net on the consolidated balance sheets. As of December 31, 2019, the NEP subsidiaries have remaining commitments under these contracts of approximately $278 million.

PG&E Bankruptcy - During 2019, approximately $1 million of net income attributable to NEP relates to PPAs that the Genesis, Desert Sunlight and Shafter solar projects have with PG&E. On January 29, 2019, PG&E filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. While PG&E or other stakeholders in the bankruptcy proceeding could seek to reject some or all of the PPAs, PG&E's proposed plan of reorganization, which is the only plan of reorganization that is progressing through the PG&E bankruptcy proceeding as of February 18, 2020, specifies that PG&E would assume all of the PPAs. PG&E’s Chapter 11 filing, or related events, caused events of default under the financings for the Genesis and Shafter projects, which, among other things, blocked the distribution of cash generated by those projects.

At December 31, 2018, the debt outstanding under the Genesis and Shafter financings totaled approximately $682 million, of which $641 million with scheduled final maturity dates ranging from 2033 to 2038 was reclassified into current debt on NEP's consolidated balance sheets. An indirect subsidiary of NEP repaid or redeemed all of the outstanding principal under the Genesis financings during 2019. At December 31, 2019, the debt outstanding under the Shafter financing totaled approximately $25 million, substantially all of which was classified as long-term debt as a result of a default waiver obtained in April 2019 that extends to April 2021.

Based on the estimated future cash flows related to the Genesis, Shafter and Desert Sunlight solar projects, no impairment adjustment was recorded at December 31, 2019. NEP will continue to monitor its investments in these projects. At December 31, 2019, cumulative cash distributions of approximately $41 million from the Shafter and Desert Sunlight solar projects were not distributed as a result of the events of default under the financings that arose due to PG&E’s bankruptcy filing.

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Condensed consolidated quarterly financial information is as follows:

	March 31(a)				June 30(a)				September 30(a)				December 31(a)
	(millions, except per unit amounts)
2019
Operating revenues	$	177			$	219			$	253			$	206
Operating income	$	34			$	67			$	88			$	43
Net income (loss)	$	(121	)		$	(124	)		$	(243	)		$	83
Net income (loss) attributable to NEP	$	(22	)		$	(28	)		$	(72	)		$	34
Earnings (loss) per unit - basic	$	(0.38	)		$	(0.49	)		$	(1.21	)		$	0.53
Earnings (loss) per unit - assuming dilution	$	(0.38	)		$	(0.49	)		$	(1.21	)		$	0.50
Distributions per unit	$	0.47			$	0.48			$	0.50			$	0.52
High-low common unit sales prices	$47.98 - $39.51				$50.50 - $43.68				$53.90 - $47.45				$53.63 - $49.89
2018
Operating revenues	$	212			$	225			$	178			$	155
Operating income(b)	$	92			$	261			$	59			$	31
Net income (loss)(b)(c)	$	(19	)		$	292			$	110			$	(117	)
Net income (loss) attributable to NEP(b)(c)	$	74			$	82			$	33			$	(22	)
Earnings (loss) per unit - basic	$	1.36			$	1.51			$	0.60			$	(0.39	)
Earnings (loss) per unit - assuming dilution	$	1.22			$	1.42			$	0.58			$	(0.39	)
Distributions per unit	$	0.41			$	0.42			$	0.44			$	0.45
High-low common unit sales prices	$45.38 - $36.84				$48.75 - $38.05				$50.66 - $44.04				$49.16 - $39.35

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(a)

In the opinion of management, all adjustments, which consist of normal recurring accruals necessary to present a fair statement of the amounts shown for such periods, have been made. Results of operations for an interim period generally will not give a true indication of results for the year. Variations in operations reported on a quarterly basis primarily reflect the seasonal nature of NEP's business. The sum of the quarterly amounts may not equal the total for the year due to rounding.

(b)	Second quarter of 2018 includes the gain on the sale of Canadian Holdings. See Note 2 - Disposal of Canadian Holdings.

(c)	First quarter of 2018 reflects a reduction of differential membership interests as a result of the change in federal income tax rates effective January 1, 2018, which is included in net loss attributable to noncontrolling interests. See Note 2 - Noncontrolling Interests.

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*	Incorporated herein by reference.

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