Capitalization

9 Months Ended

Sep. 30, 2020

7. Capitalization

Debt - Significant long-term debt issuances and borrowings by subsidiaries of NEP during the nine months ended September 30, 2020 were as follows:

Date Issued/Borrowed

Debt Issuances/Borrowings

Interest
Rate

Principal
Amount

Maturity
Date

(millions)

February 2020

NEP OpCo senior secured revolving credit facility

Variable^(a)

^(b)

2025

January 2020 - September 2020

Senior secured limited-recourse debt

Variable^(a)

^(c)

2026

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

(b)At September 30, 2020, $550 million of borrowings were outstanding and approximately $114 million of letters of credit were issued under the NEP OpCo credit facility.

(c)At September 30, 2020, approximately $836 million of borrowings were outstanding under the existing credit agreement of the Meade purchaser and Pipeline Investment Holdings, LLC (Meade credit agreement).

In February 2020, NEP OpCo and its direct subsidiary (loan parties) entered into an amendment of their existing revolving credit facility. The amendments to the revolving credit facility include, among other things, an extension of the maturity from February 2024 to February 2025.

NEP OpCo and its subsidiaries' secured long-term debt agreements are secured by liens on certain assets and contain provisions which, under certain conditions, could restrict the payment of distributions or related party fee payments. At September 30, 2020, NEP and its subsidiaries were in compliance with all financial debt covenants under their financings.

Equity - On October 20, 2020, the board of directors of NEP authorized a distribution of $0.5950 per common unit payable on November 13, 2020 to its common unitholders of record on November 5, 2020.

During the three and nine months ended September 30, 2020, NEP issued 1.8 million NEP common units upon the conversion of preferred units on a one-for-one basis and issued approximately 5.7 million NEP common units upon the conversion of $300 million of senior unsecured convertible notes (convertible notes). In October 2020, NEP received approximately $30 million in cash related to the unwinding of a capped call transaction that was entered into in connection with the issuance of the

convertible notes and NEP issued approximately 1.2 million NEP common units upon the conversion of preferred units on a one-for-one basis.

Earnings (Loss) Per Unit - Diluted earnings (loss) per unit is 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.

The reconciliation of NEP's basic and diluted earnings (loss) per unit for the three and nine months ended September 30, 2020 and 2019 is as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		2020		2019
	(millions, except per unit amounts)
Numerator:
Net income (loss) attributable to NEP – basic	$	56	$	(72)	$	(119)	$	(122)
Adjustments for convertible notes and preferred units^(a)	2		—		—		—
Net income (loss) attributable to NEP used to compute diluted earnings (loss) per unit	$	58	$	(72)	$	(119)	$	(122)
Denominator:
Weighted-average number of common units outstanding – basic	67.7		59.9		66.2		57.4
Effect of dilutive convertible notes and preferred units^(a)	8.2		—		—		—
Weighted-average number of common units outstanding and assumed conversions	75.9		59.9		66.2		57.4
Earnings (loss) per unit attributable to NEP:
Basic	$	0.83	$	(1.21)	$	(1.80)	$	(2.12)
Assuming dilution	$	0.76	$	(1.21)	$	(1.80)	$	(2.12)

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(a)Due to the net losses incurred during the nine months ended September 30, 2020 and the three and nine months ended September 30, 2019, the weighted-average number of common units issuable pursuant to the convertible notes and preferred units totaling approximately 9.6 million, 15.9 million and 18.4 million, respectively, were not included in the calculation of diluted loss per unit due to their antidilutive effect.