Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Day (June 2017)
192 slides from Nextera Energy's investor day presentation, Jun 22, 2017
Slide 1: Investor Conference 2017
NEXTera’ NexTera energy” ENERGY & PARTNERS 2
Slide 2: Cautionary Statements And Risk Factors That May Affect Future Results
Cautionary Statements And Risk Factors That May Affect Future Results These presentations include forward-looking statements within the meaning of the federal securities laws. Actual results could differ materially from such forward-looking statements. The factors that could cause actual results to
Slide 3: Investor Conference 2017
Investor Conference 2017 Date: June 22, 2017 Location: New York, NY Presentation Speakers Time Opening Remarks 8:30 – 8:35 am Introduction & Overview Jim Robo 8:35 – 9:15 am Florida Power & Light Eric Silagy 9:15 – 9:55 am Break 9:55 – 10:10 am NextEra Energy Resources Armando Pimentel 10:10 – 10:50
Slide 4: Introduction and Overview
INVESTOR CONFERENCE 2017 Introduction and Overview Jim Robo Chairman and CEO June 22, 2017
Slide 5: Agenda
Agenda NextEra Energy Value Proposition Growing a Multibillion Dollar Company NEP Value Proposition Improving Governance at NEP NEE Outlook 5
Slide 6: We have successfully achieved the key objectives we set at our 2015 investor conference
We have successfully achieved the key objectives we set at our 2015 investor conference 2015 Investor Conference Key Objectives and Status Deliver adjusted EPS CAGR of 5% – 7% Grow dividends at least in line with EPS Maintain the strength of our balance sheet Provide superior customer value
Slide 7: Each of our major businesses contributed to NextEra Energy's successful performance: NEE
Each of our major businesses contributed to NextEra Energy’s successful performance NEE: Key Initiatives and Status Deliver adjusted EPS CAGR of 5% – 7% • Achieved 8.1% adjusted EPS CAGR off a 2014 base through 2016 • Increased adjusted EPS expectations to 6% – 8% CAGR off a 2016 base through 2020
Slide 8: Each of our major businesses contributed to NextEra Energy's successful performance: FPL
Each of our major businesses contributed to NextEra Energy’s successful performance FPL: Key Initiatives and Status • Customer bills that are well below Provide superior customer value state and national averages • Recognized as nation’s most reliable electric utility • Award-winning customer serv
Slide 9: Each of our major businesses contributed to NextEra Energy's successful performance: Energy Resources
Each of our major businesses contributed to NextEra Energy’s successful performance Energy Resources: Key Initiatives and Status Continue to build North America’s leading • Record two-year development period (2015 – 2016) renewables business – ~4,000 MW of wind & solar brought online • Signed cont
Slide 10: NextEra Energy was the third-largest U.S. capital investor across all industries in 2016
NextEra Energy was the third-largest U.S. capital investor across all industries in 2016 2016 Top 10 U.S. Capital Investors(1) $24 $20.2 $20 $17.1 $16 $B $12 $9.6 $9.1 $8.6 $8.5 $8.4 $8.3 $8.1 $8 $7.9 $4 $0 NEE Outside of the telecommunications industry, NextEra Energy was the largest capital invest
Slide 11: NextEra Energy is the largest producer of wind and solar energy in the world
In 2016, NextEra Energy maintained its status as the largest producer of wind and solar energy in the world World’s Top Generators of Global Wind Wind and Solar Energy in 2016(1) Installations (Dec. 2016)(3) 50 175 169 44.2 40 150 33.5 125 30.2 30 24.5 100 GWh GW 82 20 19.8 19.7 19. 4 17.8 75 50 50
Slide 12: NextEra Energy has continued its long-term track record of delivering value to shareholders
NextEra Energy has continued its long-term track record of delivering value to shareholders Adjusted Earnings Per Share Total Shareholder Return(1) $6.19 20% 18% 60% $5.71 53% $5.30 16% $4.97 50% $4.30 $4.39 $4.57 43% 15% $3.84 $4.05 12% 40% $3.49 $3.04 29% $2.63 10% 30% 20% 5% 10% 0% 0% '05 '06 '07
Slide 13: NextEra Energy has outperformed all top ten power companies in adjusted EPS growth since 2005
NextEra Energy has outperformed all of the top ten power companies in adjusted EPS growth since 2005 Adjusted EPS CAGR 2005 – 2016 Top 10 Power Companies(1) by Market Cap 10% 8.1% 8% 6% Adj. EPS 4.8% 4.3% 4.1% CAGR (%) 4% 3.4% 2.8% 2.3% 1.9% 2% 1.5% 0% (2%) (1.3%) NEE 1) Top ten U.S. power companies
Slide 14: NextEra Energy is one of only two top power companies with GAAP EPS higher than adjusted EPS
NextEra Energy is one of only two of the top 10 power companies with GAAP EPS higher than adjusted EPS since 2005 Cumulative EPS Adjustments 2005 – 2016 Top 10 Power Companies(1) by Market Cap GAAP higher 5% than Cumulative 1.3% 0.8% Adjusted Adjustments EPS as % of 0% Adjusted Cumulative higher Adj
Slide 15: NextEra Energy has outperformed 81% of S&P 500 Utilities Index companies
NextEra Energy has outperformed 81% of the companies in the S&P 500 Utilities Index and 71% of the companies in the S&P 500 Index over the last ten years 10-year TSR vs. 10-year TSR vs. S&P 500 Utilities Index(1) S&P 500 Index(1) 250% 250% 228% 206% 206% 200% 195% 200% 150% 139% 150% 129% 100% 100%
Slide 16: Our growth strategy has led to real change in relative position
Over a sustained period of time, our growth strategy has led to real change in relative position Top 20 Global Utility Equity Market Capitalization(1) As of 6/1/2001 ($ MM) As of 6/15/2017 ($ MM) Rank Market Cap Rank Market Cap 1 $38,574 1 $66,418 NextEra Energy 2 $38,185 2 $60,855 3 $34,476 3 $55,1
Slide 17: Our ability to deliver results is a product of our people and culture
Our ability to deliver results is a product of our people and culture of continuous improvement Culture of Delivering Results • Recognized as the most admired company in our industry and one of the best companies in any industry – Fortune World's Most Admired Companies – Ethisphere Institute World's
Slide 18: Agenda
Agenda NextEra Energy Value Proposition Growing a Multibillion Dollar Company NEP Value Proposition Improving Governance at NEP NEE Outlook 18
Slide 19: We believe we continue to have the best organic growth platform in the industry
We believe we continue to have the best organic growth platform in the industry Growth Strategy Operational Core Strengths Excellence + Financial Strength + Visible Growth Opportunities 2015 FPL Solar(1) Skills 2014 Storage 2013 Gas Pipelines + 2012 Distributed Solar Scale 2008 NEER Gas Infrastructu
Slide 20: Our toe-in-the-water approach to growth has been very successful
Our “toe-in-the-water” approach to growth has been very successful Wind(1) FPL Solar 20 16.3 – 17.9 1,500 15 ~1,000 GW MW 1,000 10 500 5 1.7 25 0 0 2002 2018E 2009 2018E NEER Solar(1) Gas Pipelines(1) 4 $6.0 2.4 – 3.3 ~$5.2 3 GW Capital $4.0 2 Deployed $B $2.0 1 0.1 $0 0 $- 2009 2018E 2012 2018E 20
Slide 21: We are well positioned to continue this track record for the next four years
We are well positioned to continue this track record for the next four years Wholesale FPL & Service FPL Coal Retirements Energy Territory Expansion Services FPL FPL Battery FPL T&D FPL New Solar Infrastructure Generation Storage Expect $40 B - Capital FPL $44 B of capital New Wind Generation Asset
Slide 22: FPL – Areas of Focus
At FPL, we are focused on continuing to identify smart investment opportunities and improve our outstanding value proposition across the board FPL – Areas of Focus • Continue to execute on our Cost & Reliability best-in-class customer value Operational Cost(1) SAIDI(2) ($/Retail MWh) (Minutes) propo
Slide 23: Energy Resources – Areas of Focus
Energy Resources is focused on expanding the world’s leading renewables platform and developing additional pipeline and storage opportunities Energy Resources – Areas of Focus • Continue to build the world’s $ MM Adjusted Earnings(1,2) leading renewables business by $2,000 $1,650 – leveraging: $1,75
Slide 24: Project Accelerate
Project Accelerate is a company-wide initiative to reimagine everything we do, building upon the success from Project Momentum Project Accelerate Cost Savings $ MM • Bottoms-up, employee- $500 generated idea process for ~$425 ~$425 reducing costs and $400 increasing revenues ~$300 $300 • Over 2,000
Slide 25: NextEra Energy Post–2020 Snapshot
We expect opportunities for smart capital deployment to continue beyond 2020 NextEra Energy Post–2020 Snapshot Generation Nuclear Transmission and Modernization 26% Distribution Wind Solar Storage Gas Pipelines 25
Slide 26: Disruptive Industry Changes
We are well positioned to capitalize on and respond to potentially disruptive changes to our industry in the next decade Disruptive Industry Changes Potential Cost per kWh Post-2020(1) Shale (¢/kWh) Gas 3.5 - 5¢ 4 - 5¢ 3 - 4¢ 3 - 4¢ Big Data Renewables 2 - 3¢ /Storage Generation Wind Solar Gas Coal
Slide 27: Agenda
Agenda NextEra Energy Value Proposition Growing a Multibillion Dollar Company NEP Value Proposition Improving Governance at NEP NEE Outlook 27
Slide 28: NEP's success in delivering on key initiatives discussed in 2015
We are very pleased with NEP’s success in delivering on the key initiatives we discussed in 2015 NextEra Energy Partners’ 2015 Investor Conference Key Objectives and Status • Grow annualized LP distributions to at least Q4 2015 annualized distribution was $1.23 per common unit(1) $1.13 per common
Slide 29: NEP's value proposition is built upon four core strengths
NEP’s value proposition is built upon four core strengths NextEra Energy Partners’ Core Strengths High-Quality Portfolio Financial Strength and Flexibility ~3 GW Current Year-end 2017E 18-Yr A3 Renewables >90% Remaining Counterparty Capacity of Project Debt ~2.8x ~1.2x & Tax Equity HoldCo Coverage C
Slide 30: Since the IPO, NextEra Energy Partners has delivered total unitholder return of 55%
Since the IPO, NextEra Energy Partners has delivered total unitholder return of 55% Total Unitholder Return NextEra Energy Partners vs. Indices 60% 55% 50% 40% 37% 32% 30% 20% 10% 0% (1) Yieldco NEP S&P 500 S&P 500 Utilities Index Average(2) -10% -20% (14%) 1) Reflects total unitholder return, assum
Slide 31: Agenda
Agenda NextEra Energy Value Proposition Growing a Multibillion Dollar Company NEP Value Proposition Improving Governance at NEP NEE Outlook 31
Slide 32: Governance changes at NEP to enhance LP unitholder rights
We plan to implement certain governance changes at NEP in order to enhance LP unitholder rights Enhancing Unitholder Governance Rights Current Structure New Structure • BOD at NEP GP • New BOD at NEP LP Board of Directors • NEE appoints all Directors • Three Directors appointed by GP (NEE) (BOD) • F
Slide 33: Enhanced governance structure will impact both NEP and NEE
The enhanced governance structure will impact both NEP and NEE Impacts to NEP Impacts to NEE • Enhanced governance rights • Potential increased value in for LP unitholders NEE’s investment in NEP • Separate investor base with – Governance enhancements independent capital structure expected to improv
Slide 34: NEP's rating supports a HoldCo leverage target of 4.0x to 5.0x
NEP’s rating supports a HoldCo leverage target of 4.0x to 5.0x project cash available for distribution Corporate Credit Rating and Debt Capacity • Based on rating agency feedback, NEP expects to be rated in the mid- to high-BB New Opportunities category Term Loan B High- Yield Debt Convertible Revol
Slide 35: NEP agreement to issue $550 MM of convertible preferred securities
We are announcing NEP has reached an agreement to issue $550 MM of convertible preferred securities Convertible Preferred Offering(1) • NEP’s 4.50% coupon is the Coupon at Issuance 12% lowest ever for a preferred 10.75% security in the MLP or Yieldco 10% 9.5% 10.0% sector 8.5% 8.5% 8.0% 8.0% 8% • Pr
Slide 36: Clear visibility to future NEP portfolio growth
Acquisitions from Energy Resources, organic growth and third party M&A all provide NEP with clear visibility to future portfolio growth Growth Opportunities Potential Acquisition of Potential Organic Clean Energy Potential for 3rd Prospects for Assets at Energy Party Texas Pipelines Resources, Acqui
Slide 37: Agenda
Agenda NextEra Energy Value Proposition Growing a Multibillion Dollar Company NEP Value Proposition Improving Governance at NEP NEE Outlook 37
Slide 38: Excess balance sheet capacity to fund growth into the next decade
We expect to have excess balance sheet capacity to fund growth into the next decade NEE Adjusted Earnings NEE Balance Sheet Strength From Regulated Businesses(1) • We remain committed to maintaining one of the strongest balance sheets 69% in the industry • Regulated business mix expected to 67% mean
Slide 39: Opportunistic with M&A, but no transaction needed to meet growth objectives
We will remain opportunistic with M&A, but do not need to execute a transaction to meet our growth objectives Logic Constraints Implications • Strong • Scale to move • Must be operational and needle for $90 B significantly management asset company accretive skills can create value • Regulatory • Mus
Slide 40: NextEra Energy Expectations
We are well positioned to meet our financial expectations NextEra Energy Expectations Adjusted EPS Dividend Per Share Expectations Expectations $7.85 - $8.45 $4.30 - $4.60 $6.19 $3.08 2016 2020E 2015 2018E 40
Slide 41: Florida Power & Light
INVESTOR CONFERENCE 2017 Florida Power & Light Eric Silagy President and CEO June 22, 2017 41
Slide 42: Agenda
Agenda Introduction & Overview Customers & Economy O&M Productivity Capital Investments Financial Outlook 42
Slide 43: Florida Power & Light
The FPL story has remained consistent since our last investor conference Florida Power & Light • One of the largest U.S. electric utilities • Vertically-integrated, retail rate-regulated • ~4.9 MM customer accounts • ~26 GW in operation • $10.9 B(1) in operating revenues • $47.1 B in total assets 1)
Slide 44: FPL achieved the key objectives set at our 2015 investor conference
FPL successfully achieved the key objectives we set at our 2015 investor conference 2015 Investor Conference Key Objectives and Status Virtuous Circle Provide superior customer value – Low Bills (2015 & 2016 bills lowest in the state) Customer – High reliability (52% better than the Satisfaction n
Slide 45: FPL's typical customer bill is 15% lower than in 2006
FPL’s typical customer bill is 15% lower today than it was in 2006, even as many other goods and services have increased in price FPL Customer Bill(1) Comparison $108.61 FPL bill down 15% Medical Care +43% Cable & Satellite $92.14 TV Food Home +32% +28% Insurance +28% FPL 2006 FPL 2016 Change since
Slide 46: 2006 – 2016: Low Bills and High Reliability
FPL’s execution of its long-term strategy has produced excellent results for customers 2006 – 2016: Low Bills and High Reliability SAIDI: System Average (2) Avg. Customer Bill(1) Interruption Duration Index $140 $134 90 80 75 Minutes $116 $115 60 58 $120 52% better $109 $108 Good 45 than the $100 30
Slide 47: Capital investments while reducing fuel costs and achieving best-in-class O&M
Since 2006, FPL has made significant capital investments while reducing fuel costs and achieving best-in-class O&M 2006 – 2016 2006 – 2016 Capital Expenditures(1) Total Operating Expense $B $B $5 $10 $8.5 $4.2 $4.2 $8.2 $8.2 $4.1 $4 $8 $7.7 $3.7 $3.3 $6.6 $6.7 $6.0 $6.0 $5.9 $3 $2.8 $2.8 $6 $5.6 $2.
Slide 48: FPL's investments have saved customers almost $8.6 B in fuel
Since 2002, FPL's investments have saved customers almost $8.6 B due to fuel efficiency improvements 2002 – 2016 Customer Fuel Savings(1) $1,200 $9 $1,008 $8 $1,000 $7 $813 $785 $800 $6 Annual $672 $666 $643 Cumulative Savings $654 $635 $5 Savings ($ MM) $600 ($ B) $528 $545 $485 $4 $441 $400 $357 $
Slide 49: FPL has reduced CO2 emissions by ~46% since 2001
FPL’s strategy has reduced CO2 emissions by ~46% since 2001, resulting in an emissions profile that is ~30% below the national average FPL CO2 Emissions Profile(1) 1,500 U.S. Electric Power Sector 1,400 Good 1,300 1,200 Florida Power & Light Company CO2 Cape 1,100 Canaveral - Lbs./MWh Combined Desot
Slide 50: FPL continues to be recognized nationally as an industry leader
FPL continues to be recognized nationally as an industry leader Recent Customer Service Recognition • Recognized as the nation’s most reliable utility two years in a row – For a second consecutive year, FPL received the ReliabilityOneTM National Excellence Award from PA Consulting for best in the na
Slide 51: FPL's 2016 Settlement Agreement Overview
With a fair and balanced, four-year rate settlement agreement, FPL is well positioned to continue providing an exceptional customer value proposition FPL’s 2016 Settlement Agreement Overview • Effective January 2017 through December 2020 • Retail base revenue increases according to the following sch
Slide 52: Reserve Amortization Mechanism
During FPL’s settlement period, most of the variation in revenue and cost drivers is expected to be offset by the reserve amortization mechanism Reserve Amortization Mechanism • FPL is allowed to amortize up to $1.25 B of surplus depreciation and fossil dismantlement reserve during 2017 - 2020 • FPL
Slide 53: Agenda
Agenda Introduction & Overview Customers & Economy O&M Productivity Capital Investments Financial Outlook 53
Slide 54: The Florida economy continues to experience steady growth
The Florida economy continues to experience steady growth Annual Change in Florida Florida Unemployment(1) Non-Farm Employment(2) 12% (1,000s) 250 Unemployment rate 10% at or near 5% for 150 over a year 50 8% (50) 6% 4.5% (150) (250) 4% (350) Job growth of over 1.3 million private sector 2% (450) jo
Slide 55: Florida's population growth continues to surpass the U.S. rate
Florida’s population growth continues to surpass the U.S. rate and, at 21 million residents, the state is now the third most populous in America FL Population Growth(1) Atlas World Group 2016 Migration(2) 4.0% 3.5% FL is expected to continue to grow at a higher rate than the 3.0% overall U.S. 2.5% P
Slide 56: Steady customer growth partially offset by declining usage per customer
Our projected sales are a result of steady customer growth partially offset by slightly declining usage per customer Total Customers and Weather-Normalized Usage (MM) 5.5 • FPL expects weather- 5.4 normalized usage per 5.3 customer to decline roughly 5.2 5.2 MM 0.5% per year on average 5.1 • FPL exp
Slide 57: Agenda
Agenda Introduction & Overview Customers & Economy O&M Productivity Capital Investments Financial Outlook 57
Slide 58: Best-in-class O&M position saves customers nearly $2 billion per year
Compared to being average, our best-in-class O&M position saves customers nearly $2 billion per year Operational Cost Effectiveness(1) $100.00 Adjusted Regressed Top Quartile Good Top Decile $/ Retail MWh FPL 2015 = $13.84/MWh FPL 2016 = $13.54/MWh Log/Log $10.00 1,000,000 10,000,000 100,000,000 1,0
Slide 59: FPL's base O&M efficiency delivered its best performance ever in 2016
FPL’s continued focus on base O&M efficiency delivered its best performance ever in 2016 FPL – Base O&M Costs in Real 2016 Dollars(1) 4.00 3.43 3.50 3.00 2.50 Cents per kWh (Real 2016 2.00 Dollars) 1.52 1.42 1.56 1.50 1.26 1.00 0.50 0.00 1988 2000 2005 2012 2016 Project Accelerate will drive continu
Slide 60: Agenda
Agenda Introduction & Overview Customers & Economy O&M Productivity Capital Investments Financial Outlook 60
Slide 61: FPL Projected Capital Expenditures
FPL continues to identify opportunities for further investments to improve our already industry-leading customer value proposition Projected Capital Expenditures $B $6.0 $5.0 - $5.4 $5.0 $4.6 - $5.0 $4.0 - $4.4 $3.9 - $4.2 $4.0 $3.0 $2.0 $1.0 $0.0 2017E 2018E 2019E 2020E Total projected capital depl
Slide 62: FPL 2017 – 2020 Investment Initiatives
We continue to identify smart, cost-effective opportunities to deploy capital that result in customer savings and enhanced reliability FPL 2017 – 2020 Investment Initiatives Projected Recovery Opportunity Status Investment(1) Mechanism In construction and on track to 2017/2018 Solar ~$900 MM Solar B
Slide 63: FPL expects to complete eight additional 74.5 MW solar energy centers by Q1 2018
FPL expects to complete eight additional 74.5 MW solar energy centers by Q1 2018 Solar Investment • FPL is constructing eight new universal solar energy centers across the state – ~2.5 million panels Artist’s conceptual rendering – for illustration only • ~600 MW of new solar capacity FPL Horizon So
Slide 64: Solar is on track to outpace coal and oil in FPL's fuel mix by 2020
Solar is on track to outpace coal and oil in FPL’s fuel mix by 2020 Solar Investment (continued) • FPL is developing plans and evaluating potential locations throughout Florida for 2019 – 2023 – Currently secured more than 3.5 GW of potential solar sites 58 sites throughout 19 counties • FPL expects
Slide 65: Universal solar is more cost effective for customers
Universal solar continues to be a more cost effective alternative for our customers Universal vs. Distributed Generation Solar(1) Annual MWh Generated per $10 MM of Solar Capital Investment 20.0 15.2 15.0 (1,000’s) 10.4 10.0 5.0 4.7 0.0 Universal DG - C&I DG - Residential Currently, universal solar
Slide 66: Transmission and Distribution Investments
We are focused on long-term investments designed to support growth, and improve system reliability and storm resiliency Transmission and Distribution Investments • From 2017 - 2020, FPL expects Potential Impact to invest between ~$8 B – $10 B of Reliability Investments(1) in transmission and distrib
Slide 67: Storm hardening investment
FPL will continue to focus on storm resiliency through additional investment in its storm hardening program Transmission and Distribution Storm Hardening Investments • As part of its expected T&D investments, FPL expects to invest ~$3 B in storm hardening through 2020 – Continue with hardening effor
Slide 68: Smart grid technology investments
FPL expects to continue to deploy smart-grid technology to improve reliability and enhance customer service Transmission and Distribution Smart Grid Investments • From 2017 – 2020, FPL is projected to invest ~$800 MM to further deploy smart grid devices – Successfully installed over five million sma
Slide 69: Okeechobee Clean Energy Center
In order to meet growth, FPL is constructing a state-of-the-art natural gas combined cycle plant in Okeechobee County Okeechobee Clean Energy Center • State-of-the-art natural gas combined cycle facility – ~1,750 MW facility – With a heat rate of 6,133(1) BTU/kWh, expected to be among the most fuel-
Slide 70: Modernization of the Lauderdale Plant: Dania Beach Clean Energy Center
FPL has the opportunity to generate significant customer savings through the modernization of the Lauderdale Plant Dania Beach Clean Energy Center • Lauderdale Plant is a 884 MW plant located in Dania Beach, FL – Utilizes a combination of 1950s and 1990s technology • The facility would be modernized
Slide 71: Upgrades to 7FA combustion turbines
We are making additional upgrades to our 26 7FA combustion turbines that are currently in operation Compressor and Combustion Section Upgrades • Expected to reduce fuel costs for our customers by nearly $600 MM over the life of the plants • Improve emissions profile Inlet Exhaust Air Gas • Capital i
Slide 72: Acquisition of Indiantown Cogeneration coal plant
FPL projects significant customer savings through the acquisition of Indiantown Cogeneration coal plant Indiantown Cogeneration (ICL) • 330 MW coal-fired power plant located near Indiantown, FL • FPL had a long-term contract with ICL for capacity and energy through 2025 • Purchased ICL for $451 MM –
Slide 73: Shutdown of the St. Johns River Power Park
FPL has an opportunity to create customer savings and improve the environment through the shutdown of the St. Johns River Power Park St. Johns River Power Park (SJRPP) • JEA and FPL jointly own and operate the 1,252 MW coal facility in Jacksonville • On May 17, FPL reached a final agreement with JEA
Slide 74: Service territory and wholesale growth opportunities
FPL’s low rates, high reliability and excellent customer service have created potential service territory and wholesale growth opportunities Vero Beach Wholesale Opportunities • Provided Letter of Intent to • Currently have several key acquire the City of Vero Beach wholesale customers (COVB) Electr
Slide 75: FPL: Post-2020 Snapshot
FPL remains focused on delivering outstanding customer value and deploying smart capital FPL: Post-2020 Snapshot Modernizations Additional Universal Solar Additional T&D Investments Wind Nuclear 20% 26% Battery Storage Automation FPL has significant opportunities to continue investing to 75 benefit
Slide 76: Agenda
Agenda Introduction & Overview Customers & Economy O&M Productivity Capital Investments Financial Outlook 76
Slide 77: Regulatory capital employed expected to drive FPL net income growth through 2020
Regulatory capital employed is expected to drive FPL’s net income growth through 2020 Regulatory Capital Employed Net Income $B $ MM $50 $46.0 - $48.0 $2,500 $2,400 - $2,450 $40 $2,000 $34.1 $1,727 $30 $1,500 $20 $1,000 $10 $500 $0 $0 2016 2020E 2016 2020E FPL expects regulatory capital employed and
Slide 78: FPL 1,000-kWh Residential Bill
FPL’s strategy continues to result in typical residential bills below both Florida and National averages FPL 1,000-kWh Residential Bill $140 $132.87 $120 $117.67 $108.61 $102.62 $102.11 $100 Good $80 $60 $40 $20 $- FPL FPL FPL FL IOUs National 2006 2017(1) 2020E Average (2) Average (3) Jan 2017 Jan
Slide 79: NextEra Energy Resources
INVESTOR CONFERENCE 2017 NextEra Energy Resources Armando Pimentel President and CEO June 22, 2017
Slide 80: Agenda
Agenda Energy Resources Value Proposition Growing Energy Resources Portfolio Update Financial Outlook 80
Slide 81: Energy Resources' focus is to be the leading North American clean energy company
Energy Resources’ focus is to be the leading North American clean energy company Energy Resources • World leader in electricity generated from the wind and sun • ~20 GW(1) of generation in operation – ~14 GW wind – ~2 GW solar – ~3 GW nuclear – ~1 GW natural gas/oil Wind • ~8 BCF of natural gas pipe
Slide 82: Energy Resources achieved key objectives set at 2015 investor conference
Energy Resources successfully achieved the key objectives set at our 2015 investor conference 2015 Investor Conference 2015 – 2016 Key Objectives and Status Renewable Development Continue to build North America’s MW leading renewables business 3,000 – 2015 – 2016 record two-year 2,254– 2,672 devel
Slide 83: Energy Resources' best-in-class development skills
Energy Resources’ growth is driven by its best-in-class development skills Energy Resources Development Skills Wind and Solar Portfolio(1) 20,000 Customer Relationships 15,000 Engineering/ Regulatory Construction MW 10,000 Management 5,000 0 2002 2004 2006 2008 2010 2012 2014 2016 Best-In-Class Inte
Slide 84: Long track record of executing on objectives has led to significant growth
Energy Resources’ long track record of executing on its objectives has led to significant growth over time Business Growth Adjusted EBITDA(1) Adjusted Earnings(1) $ MM $ MM $4,500 $1,250 $4,079 $1,121 $4,000 $3,500 $1,000 $3,000 $2,584 $750 $685 $2,500 $1,878 $553 $2,000 $500 $1,500 $1,000 $250 $622
Slide 85: Agenda
Agenda Energy Resources Value Proposition Growing Energy Resources Portfolio Update Financial Outlook 85
Slide 86: Renewables development opportunities have never been stronger
Energy Resources’ renewables development opportunities have never been stronger Cost and Technology Improvements Best-in- Development Class Nuclear/Coal- Federal Tax Skills Construction to-Renewables Incentives Expertise Switching ~60 GW U.S. Cost of Customer Renewable Capital and Relationships Dema
Slide 87: U.S. federal tax incentives for renewables extended into the next decade
U.S. Federal tax incentives for renewables projects have been extended into the next decade Extended U.S. Federal Tax Credits Wind Production Solar Investment Tax Credit (PTC) Tax Credit (ITC) Start of Start of Construction COD Wind Construction Solar Date Deadline PTC Date ITC During 2016 12/31/202
Slide 88: Primary driver of wind demand has shifted from compliance to economics
Over time, the primary driver of wind demand has shifted from compliance to economics Wind Demand Drivers(1) Pre-2010 2010-2014 2015-2016 7% 26% 39% 74% 61% 93% Renewable Portfolio Standard Economic All of our wind development PPAs signed in 2016 were likely driven by economics 88 1) Based on Energy
Slide 89: Wind technology improvements and cost declines
With continued technology improvements and cost declines, wind is expected to be very competitive into the next decade Wind Technology Levelized Cost of Net Capacity Factor(1) Electricity from Wind (Including Production Tax Credits) $/MWh 65% $70 $55-$65 60% $60 55% $50 50% $40 $36-$42 45% $30 $21-$
Slide 90: Installed costs for solar PV systems will continue to decline
Installed costs for solar PV systems will continue to decline as technologies advance and construction techniques improve Solar Panels Required Solar PV System for 100 MWac Project(1) Cost Reduction Drivers Panels • Balance of plant costs have (000s) declined by more than 50% since 500 Incremental w
Slide 91: Solar technology improvements and cost declines
Additional technology improvements and cost declines are also expected to further improve solar economics Solar Technology PV Installed Cost(1) Levelized Cost of and Module Efficiency(2) Electricity from Solar (Including Investment Tax Credits) $/Wdc $/MWh $4.00 $3.62 22.0% $160 $140-$150 $3.50 $140
Slide 92: Demand for wind and solar expected to be robust through the decade
Demand for both wind and solar energy is expected to be robust through the end of the decade Industry Estimates of Wind & Solar Market Potential 2017 - 2020(1) Wind Additions Solar Additions 45 45 40 40 37 Avg: 36 GW 40 35 35 32 35 30 30 25 26 GW 25 GW 25 24 Avg: 22 GW 20 20 15 15 13 10 10 5 5 0 0 B
Slide 93: Energy Resources Development Program
Energy Resources’ competitive advantages position us well for continued success Energy Resources Development Program (Signed Contracts as of April 21, 2017) 2017 – 2018 2017 – 2018 2019 – 2020 2019 – 2020 2017 – 2020 Signed Current Signed Current Current Contracts Expectations(1) Contracts Expectati
Slide 94: U.S. renewables development pipeline supports long-term growth
At roughly 20 GW, Energy Resources’ current U.S. renewables development pipeline is capable of supporting long-term growth Renewable Development Longer-Term Pipeline Wind: 450-600 MW Wind: 2,200-2,500 MW Solar:1,200-1,300 MW Solar: 200-300 MW Wind: 600-800 MW Solar: 600-700 MW Wind: 2,000-2,400 MW S
Slide 95: Wind Repowering Program Update
Energy Resources expects a total wind repowering opportunity of 3.3 GW – 4.3 GW through 2020 Wind Repowering Program Update MW • Nine Texas projects totaling 2,000 ~1,600 MW and ~$1.1 B in capex approved to date 1,200-1,700 1,600 1,500 – Tax equity financing has been secured 1,200 600-1,100 • Evalua
Slide 96: Battery efficiency improvements and cost declines expand storage market
Battery efficiency improvements and cost declines are expected to expand the storage market and enable even greater renewables expansion Storage Technology Lithium-ion 4-Hour Battery Pack Cost(1) Battery Storage Adder(2) $/kWh $/MWh $1,200 $80 $71-$81 $1,000 $70 $1,000 $60 $800 $45-$55 $50 $642 $38-
Slide 97: Energy Storage
While the ancillary services market drove initial growth in storage, falling costs will focus Energy Resources’ pipeline on longer duration applications Energy Storage Project MW Duration (hrs) • Total market size of $1 B+ per New Jersey 2 0.2 Illinois 20 0.4 year by 2020 Pennsylvania Pennsylvania 1
Slide 98: Estimated Costs of Generation Resources Post-2020
The all-in cost of wind and solar will continue to compete with existing generation resources as tax credits phase down Estimated Costs of Generation Resources Post – 2020(1) (cents/kWh) 4 - 5¢ w/ storage adder 4 - 5¢ 3.5 - 5¢ 3 - 4¢ w/ storage adder 3 - 4¢ 3 - 4¢ 2 - 3¢ (2) (2) New Wind New Solar N
Slide 99: Renewables expected to gain larger market share
Renewables are expected to gain a larger percentage of market share as nuclear and coal-fired power production is displaced Electricity Production by Fuel Type(1) 2006 2016 2030E 1% 11% 10% 8% 6% 18% 37% 20% 50% 68% 34% 37% Coal & Nuclear Natural Gas Wind & Solar Other As the economics for renewable
Slide 100: Energy Resources' long-term strategy capitalizes on market disruption
Energy Resources’ long-term strategy capitalizes on market disruption Disruptive Industry Changes Long-Term Strategy Shale Gas(1) Leverage development New (1) $45 - $51 Renewables Russia 287 competitive advantages & Storage Marcellus/Utica 403 $26 - $46 $33 - $45 Expand wind & solar Australia 42
Slide 101: Agenda
Agenda Energy Resources Value Proposition Growing Energy Resources Portfolio Update Financial Outlook 101
Slide 102: Generation portfolio is diverse, clean and low-cost
Energy Resources’ generation portfolio is diverse, clean and low-cost Generation Portfolio Portfolio by Technology(1) CO2 Emissions 1,400 1,200 Wind 1,000 70% lbs/ 800 Top 50 MWh Power 600 Producer Average 400 Emissions(2) 200 Nuclear 0 Natural Solar 14% 2001 2009 2016 Top 50 Top 50 Average Average
Slide 103: Adjusted EBITDA mix has shifted away from merchant assets
Energy Resources’ adjusted EBITDA mix has meaningfully shifted away from merchant assets Business Mix by Adjusted EBITDA(1) • Growth is primarily in Strategy contracted businesses Contracted Invest and grow • Continue to consciously de-emphasize merchant Merchant Optimize • Peripheral businesses pla
Slide 104: Contracted asset portfolio expected to grow to roughly 25 GW in 2020
The contracted asset portfolio is expected to grow from ~16 GW in 2016 to roughly 25 GW in 2020 Contracted Assets Contracted Clean 2020 Capacity(1,2) Forecast Energy Capacity(1) Solar Nuclear 30.0 19% 6% 23 - 28 Natural Gas 1% 25.0 Wind 20.0 74% GW 16.0 15.0 2020 Adj. EBITDA(3) Forecast 10.0 8.1 Nuc
Slide 105: Contracted nuclear earnings expected to grow through 2020
Energy Resources’ contracted nuclear earnings are expected to grow through 2020 Contracted Nuclear • Best-in-class nuclear Point Beach & Duane performance Arnold Adj. EBITDA(1) $ MM – Consistently recognized as $500 industry leaders for operational $380- excellence $400 $400 – Best-in-class O&M cost
Slide 106: Merchant Portfolio
Energy Resources’ merchant wind portfolio is largely hedged, leaving Seabrook as our primary merchant asset Merchant Portfolio Seabrook Merchant MW 10,000 • Primary merchant asset besides repowered wind portfolio 8,000 8,780 • Delivers clean, reliable, efficient 6,000 7,536 6,960 6,732 baseload ener
Slide 107: Peripheral Businesses
Experience and knowledge from our peripheral businesses are utilized and leveraged across NextEra Energy Peripheral Businesses • Customer Supply & Trading is a Adj. EBITDA Contribution customer flow business guided by conservative risk management $ MM practices $800 $725-$775 – Very little capital w
Slide 108: Expansion into the natural gas pipeline business
We have leveraged our skills and capabilities to expand into the natural gas pipeline business Natural Gas Pipeline Assets Sabal Trail and Florida Mountain Texas Southeast Connection (FSC) Valley Pipeline (MVP) Pipelines • ~$1.5 B investment in Sabal • NextEra expects to invest • NEP completed the $
Slide 109: Natural Gas Pipeline Growth
Over the next 5 years we expect the natural gas pipeline industry to make ~$50 B in new capital investments Natural Gas Pipeline Growth Cumulative CapEx Adjusted EBITDA(1) $ MM $ MM $8,000 $600 $450- $5,800- $550 $5,400- $500 $6,000 $6,000 $5,500 $300- $400 $400 $4,000 $300 $3,200 $200 $2,000 $132 $
Slide 110: Agenda
Agenda Energy Resources Value Proposition Growing Energy Resources Portfolio Update Financial Outlook 110
Slide 111: Projected Capital Expenditure Summary
New wind, solar, and natural gas pipeline investments are expected to drive capital expenditures through 2020 Projected Capital Expenditure Summary(1,2) $7.0 $6.1 - $6.8 $5.4 - $6.2 $5.3 - $6.1 $6.0 $5.2 - $5.9 $5.0 $4.0 $ B $3.0 $2.0 $1.0 $0.0 2017E 2018E 2019E 2020E Renewables (including Repowerin
Slide 112: Adjusted EBITDA expected to grow at more than 9% CAGR
Adjusted EBITDA is expected to grow at more than a 9% CAGR from 2016 to 2020 Adjusted EBITDA(1) Walk $ MM $7,000 $50- $75- ($175)- $350- $5,600- $175- $100 $125 ($225) $6,000 $1,425- $400 $6,000 $225 Gas Customer All $1,525 (3) Wind Pipelines Infrastructure Supply & Other $5,000 Repowering Trading $
Slide 113: Adjusted earnings expected to grow at over 10% CAGR
Adjusted earnings is expected to grow at over a 10% CAGR from 2016 to 2020 Adjusted Earnings(1) Walk $ MM $2,000 $45- ($20)- $40- $1,650- $1,800 $75 ($40) $1,750 $100- $100- $60 $150 Customer All $1,600 $425- $125 Other(3) $525 Pipelines Gas Supply & $1,400 Wind Infrastructure Trading $1,200 $1,121
Slide 114: NextEra Energy Partners (NEP)
INVESTOR CONFERENCE 2017 NextEra Energy Partners (NEP) Mark Hickson Executive Vice President June 22, 2017
Slide 115: Agenda
Agenda NextEra Energy Partners Value Proposition Growing NEP Enhancing Unitholder Governance Rights Maintaining a Flexible Capital Structure Growth Outlook 115
Slide 116: NEP has delivered on the key objectives discussed in 2015
NEP has successfully delivered on the key objectives discussed in 2015 2015 Investor Conference Annualized Key Objectives and Status LP Distributions(1) Grow annualized LP distributions to at least $1.13 per common unit by the end of 2015 ‒ Q4 2015 annualized distribution was $1.41 $1.46 $1.37 $1.
Slide 117: NextEra Energy Partners' Portfolio
NextEra Energy Partners is a best-in-class diversified clean energy growth company NextEra Energy Partners’ Portfolio(1) • Stable cash flows supported by: – Long-term contracts with credit- worthy counterparties – Geographic and asset diversity • ~3,000 MW of renewables – ~2,600 MW wind – ~400 MW so
Slide 118: NEP's value proposition is built upon four core strengths
NEP’s value proposition is built upon four core strengths NextEra Energy Partners’ Core Strengths High-Quality Portfolio Financial Strength and Flexibility ~3 GW Current Year-end 2017E 18-Yr A3 Renewables >90% Remaining Counterparty Capacity of Project Debt ~2.8x ~1.2x & Tax Equity HoldCo Coverage C
Slide 119: NEP's portfolio characteristics are best-in-class
We believe NEP’s portfolio characteristics are best-in-class Portfolio Overview(1) Asset Type Mix Project Concentration (% of CAFD) (Top 5 Assets % of CAFD) 84% 28% 56% 19% 47% 44% 53% IPO 6/15/2017 IPO 6/15/2017 Wind Solar Pipelines Average Credit Rating & Diversity(2,3) Average Contract Length A2
Slide 120: Amortizing asset-level financing and coverage ratio
The amortizing nature of NEP’s asset-level financing combined with its coverage ratio reduces risks to investor distributions Financial Strength and Flexibility Asset-Level Amortization(1) Coverage Ratio(2) Non-Amortizing 9% ~1.2x ~1.1x ($20-$30) $310-$340 $285-$315 $270-$280 Amortizing 91% Run-Rate
Slide 121: Structural Tax Advantages
NEP’s structure creates tax advantages similar to MLPs Structural Tax Advantages Federal Income Earnings & Profits C-Corp for Tax Tax Shield Tax Shield Purposes • Driven by existing and • NEP distributions are • Investors receive a future NOLs treated as “return of 1099-DIV as opposed generated prim
Slide 122: Agenda
Agenda NextEra Energy Partners Value Proposition Growing NEP Enhancing Unitholder Governance Rights Maintaining a Flexible Capital Structure Growth Outlook 122
Slide 123: Asset Suitability
NEP continues to focus on investing in clean energy assets with stable cash flows Asset Suitability Long-Term Contract Clean Energy Technology Creditworthy Counterparty “NEP-Able” Asset Stable Regulatory Environment Limited or Monetized Tax Credits Strong Operations Any clean energy asse
Slide 124: Clear visibility to future NEP growth
Acquisitions from Energy Resources, organic growth and third party M&A all provide NEP with clear visibility to future growth Growth Opportunities Potential Acquisition of Potential Organic Clean Energy Potential for 3rd Prospects for Assets at Energy Party Texas Pipelines Resources, Acquisitions an
Slide 125: Energy Resources' renewable portfolio is larger today than after NEP's IPO
Energy Resources’ renewable portfolio is larger today than it was after NEP’s IPO Energy Resources’ Renewable Portfolio Since NEP’s IPO GW 14 ~5 GW ~13 GW 12 ~10 GW ~2 GW 10 8 6 4 2 - Renewables Portfolio MW Sold to NEP MW Placed Current Portfolio(1) after IPO since IPO in Service Existing Energy Re
Slide 126: Wind & Solar Market Potential 2017 – 2020
With robust renewable demand, potential NEP acquisitions are expected to increase over time Industry Estimates of Wind & Solar Market Potential 2017 – 2020(1) Wind Solar 45 45 40 40 37 Avg: 36 GW 40 35 35 32 35 30 30 25 26 GW 25 GW 25 24 Avg: 22 GW 20 20 15 15 13 10 10 5 5 0 0 BNEF IHS MAKE Make ABB
Slide 127: Organic Growth Opportunities
NEP is exploring organic growth opportunities in the form of potential pipeline expansion and repowerings Organic Growth Opportunities Texas Pipelines Expansion ($MM) • NEP is exploring expansion $190-$210 growth opportunities at the TX pipelines – $300 MM - $350 MM investment $145-$155 at ~6x Adjus
Slide 128: Third-Party Opportunities
There is a large addressable renewables market in which NEP can compete Third-Party Opportunities Potential Addressable Market (1) Yieldcos & MLP Trading Yields(2,3) ~$1,530 B Total Midstream Market NEP trades at a competitive yield compared to other Yieldcos and ~32% high growth MLPs ~$490 B MLPs ~
Slide 129: Agenda
Agenda NextEra Energy Partners Value Proposition Growing NEP Enhancing Unitholder Governance Rights Maintaining a Flexible Capital Structure Growth Outlook 129
Slide 130: Governance changes at NEP to enhance LP unitholder rights
We plan to implement certain governance changes at NEP in order to enhance LP unitholder rights Enhancing Unitholder Governance Rights Current Structure New Structure • BOD at NEP GP • New BOD at NEP LP Board of Directors • NEE appoints all Directors • Three Directors appointed by GP (NEE) (BOD) • F
Slide 131: NEP LP unitholders will have the right to elect a majority of the Board
NEP LP unitholders will have the right to elect a majority of the Board which will move from NEP GP to NEP LP Board of Director Changes NEP Organizational Structure Current Board Composition NEP GP Appoints NEE Current NEP GP Board New Board Composition New NEP GP Appoints LP Unitholders Elect NEP B
Slide 132: NEP Board Authority
The new NEP Board will have authority over NEP’s business and operations NEP Board Authority • Exclusive authority to oversee and direct operations, policies, and management oversight • Ability to review and approve: – Related-party transactions – Financings and investment decisions (acquisitions, d
Slide 133: Agenda
Agenda NextEra Energy Partners Value Proposition Growing NEP Enhancing Unitholder Governance Rights Maintaining a Flexible Capital Structure Growth Outlook 133
Slide 134: IDR Fee Modification
NEP’s overall cost of capital has benefitted as a result of the IDR fee modification we previously announced IDR Fee Modification Forward Trading & IDR Yield Expected Benefits to NEP vs. High-Growth MLPs(1) • More cash available for LP 12% unitholders 10% 9.5% • Fewer asset additions 8% 8.1% 8.5% re
Slide 135: Financing Alternatives
In addition to the IDR fee modification, we continue to analyze and evaluate new opportunities for financings Financing Alternatives New Opportunities High-Yield Term Loan B Debt Convertible Revolving Debt Credit Facility Optimal Capital Structure for Distribution Growth Convertible Bank Term Prefer
Slide 136: Mid- to high-BB credit rating and HoldCo leverage target
NEP has received preliminary indications of a strong mid- to high-BB credit rating, and will target HoldCo leverage of 4.0x - 5.0x project CAFD Corporate Credit Rating & Target Leverage Ratio • NEP expects to be rated in Hypothetical Cash Flow/Unit to the mid- to high-BB area LP Unitholders From Acq
Slide 137: $550 MM of convertible preferred securities
NEP has reached an agreement to issue $550 MM of convertible preferred securities Convertible Preferred Offering(1) • Completed with a group of Coupon at Issuance for private investors Comparable Transactions(2) • Provides a low cash cost of 10.0% 10.75% funds that is comparable to 9.5% HoldCo debt
Slide 138: Optimizing The Capital Structure
Putting it all together, the combination of our optimization efforts is expected to minimize the need for common equity Optimizing The Capital Structure Investor IDR Fee Low double-digit Investor Demand Modification ROEs on acquisitions Demand Access Access to Preferred financing Dividend Alternativ
Slide 139: Agenda
Agenda NextEra Energy Partners Value Proposition Growing NEP Enhancing Unitholder Governance Rights Maintaining a Flexible Capital Structure Growth Outlook 139
Slide 140: NEP on-track to meet 2017 run-rate Adjusted EBITDA and CAFD expectations
NEP is on-track to meet its 2017 run-rate Adjusted EBITDA and CAFD expectations Adjusted EBITDA and CAFD Expectations Adj. EBITDA CAFD ($MM) ($MM) $875-$975 $310-$340 $670-$760 $230-$290 2016 YE 2017 YE 2016 YE 2017 YE Run-Rate (1) Run-Rate (2) Run-Rate (1) Run-Rate (2) 1) Reflects calendar year 201
Slide 141: NEP expected LP distribution growth of 12% – 15% through 2022
Looking forward, we expect NEP to grow LP distributions by 12% – 15% annually through at least 2022 NextEra Energy Partners’ Long-Term Distribution per Unit Growth Expectations(1) Annual 12%-15% Growth(2) $1.58-$1.62 $1.41 Q4 2016 Q4 2017E Q4 2022E 1) Represents expected fourth quarter annualized di
Slide 142: Valuing NEP's Growth
The tenor of NEP’s distribution growth guidance relative to peers reflects our confidence in the long-term opportunity Valuing NEP’s Growth Guidance Tenor vs. High Growth MLP Peers(1) Long-Term/Terminal Value Drivers NEP • 18-year average remaining contract life(2) of NEP’s assets limits commodity p
Slide 143: Summary and Financial Outlook
INVESTOR CONFERENCE 2017 Summary and Financial Outlook John Ketchum Executive Vice President and CFO June 22, 2017
Slide 144: Agenda
Agenda NextEra Energy Partners’ Financial Outlook NEE Accounting Impacts of NEP Deconsolidation NextEra Energy Financial Outlook 144
Slide 145: NextEra Energy Partners Key Objectives
At NextEra Energy Partners, we remain focused on continuing to meet our key objectives NextEra Energy Partners Key Objectives Grow LP unit distributions at 12% – 15% per year through at least 2022(1) Deliver Adjusted EBITDA and CAFD expectations Invest in long-term contracted clean energy assets wit
Slide 146: NEP offers a superior value proposition
We believe NEP offers a superior value proposition and is better positioned than ever to deliver upon the expectations that we have shared Investor Total Return Potential • Opportunity to earn a total return of ~4% 16% - 19% roughly 16% - 19% per year through at least 2022 12% - 15% • Diversified po
Slide 147: Agenda
Agenda NextEra Energy Partners’ Financial Outlook NEE Accounting Impacts of NEP Deconsolidation NextEra Energy Financial Outlook 147
Slide 148: Practical Accounting Impacts of Deconsolidation
Due to the enhanced governance rights for LP unitholders, NextEra Energy will no longer consolidate NEP in its financial statements beginning in 2018 Practical Accounting Impacts of Deconsolidation GAAP Adjusted Earnings • NEP’s balance sheet removed from • Same as GAAP Equity NEE’s and replaced wit
Slide 149: Adjusted earnings with or without deconsolidation roughly the same
NextEra Energy’s adjusted earnings, with or without deconsolidation, are expected to be roughly the same Hypothetical Example of NextEra Energy’s Adjusted Earnings - December 31, 2018(1) With NEP Consolidated ($ MM) With NEP Deconsolidated ($ MM) GAAP Net income attributable to NEE $3,335 GAAP Net i
Slide 150: Deconsolidation removes NEP's PP&E and debt from NEE's balance sheet
Deconsolidation results in NEP’s PP&E and debt being removed from NEE’s balance sheet Hypothetical Example of NextEra Energy’s Balance Sheet - December 31, 2018(1) ($MM) With NEP Consolidated With NEP Deconsolidated(2) Change Assets Assets Total PP&E $75,000 Total PP&E $68,200 ($6,800) Investment in
Slide 151: Agenda
Agenda NextEra Energy Partners’ Financial Outlook NEE Accounting Impacts of NEP Deconsolidation NextEra Energy Financial Outlook 151
Slide 152: 2017 – 2020 Key Objectives
Our objectives for the next four years remain consistent with our long-term focus 2017 – 2020 Key Objectives Grow adjusted EPS by 6% – 8% CAGR off a 2016 base Increase dividends at 12% – 14% per year through at least 2018 off a 2015 base Maintain balance sheet strength Deliver superior customer valu
Slide 153: Adjusted EPS CAGR of 6% to 8% through 2020
We remain well positioned to achieve our adjusted EPS compound annual growth rate of 6% to 8% through 2020 NextEra Energy’s Adjusted Earnings Per Share Expectations • Remain committed to maintaining the strength of our balance sheet $7.85 - $8.45 • Expect $3 B – $5 B of excess $6.80 - balance sheet
Slide 154: NextEra's Business Mix Characteristics
Our business mix is expected to continue to shift towards more regulated and long-term contracted NextEra’s Business Mix Characteristics 2016 Adjusted Earnings from 2020E Regulated Businesses(1) 63% 67% +4% +xx% 37% 33% 0.0% Adjusted EBITDA from Regulated and Long-Term Contracted Operations(2) 13% 1
Slide 155: Quality of cash flows from Energy Resources' portfolio has improved
The quality of cash flows generated by Energy Resources’ portfolio has dramatically improved over time 2017 Energy Resources’ Pre-Tax Cash Flows(1) by Vintage Pre-2005 2005-2009 2010-Present Asset Additions Asset Additions Asset Additions 0.6% 0.2% 12% 2% 8% 86% 92% 99.2% Contracted with Investment
Slide 156: NextEra Energy's Free Cash Flow
Depending on our capital investment opportunities, we expect our free cash flow to return to a surplus position by 2020 NextEra Energy’s Free Cash Flow 2017 2018 2019 2020 Cash Flow from Operations $6.7 B - $7.1 B $7.3 B - $7.7 B $7.6 B - $8.0 B $8.1 B - $8.5 B Capital Expenditures(1) ($10.0) B - ($
Slide 157: Hypothetical Steady State Cash Flow
Even in an extreme “no growth” scenario, we would expect NEE to generate strong free cash flow Hypothetical “Steady State” Cash Flow (Based on 2018 expectations) Baseline Hypothetical Operating $7.3 B to $7.7 B Sustained $7.3 B to $7.7 B Cash Flow Capital ($10.0) B to ($11.0) B Reduce Growth Capex (
Slide 158: Commitment to preserving strong credit position
We remain committed to preserving our strong credit position, which is one of the highest among large, rate-regulated utilities NextEra Energy Ratings(1) Utility Credit Ratings(2) S&P Moody’s Fitch NextEra Energy 30% Issuer Credit Rating A- Baa1 A- Outlook Stable Stable Stable 25% Florida Power & Li
Slide 159: Credit Metrics
NextEra Energy’s credit metrics remain on track Credit Metrics Actual Actual Actual Target S&P A- Range 2014 2015 2016 2017/2018 FFO/Debt 23%-35% 25% 26% 27% 26% Debt/EBITDA 2.5x-3.5x 3.5x 3.3x 3.1x 3.1x Actual Actual Actual Target Moody’s Baa Range 2014 2015 2016 2017/2018 CFO Pre-WC/Debt 13%-22% 2
Slide 160: Financing Strategy
Our financing strategy targets matching our debt maturity profile to our assets’ lives and reducing interest rate exposure Financing Strategy • At FPL Peer Debt Profile(1) – Focus on long-dated maturities, but Average Average may selectively shorten up to meet Debt Tenor Interest Rate market demand
Slide 161: Expect to continue to grow dividends per share through at least 2018
We expect to continue to grow our dividends per share through at least 2018 at an above average rate compared to our peers NextEra Energy Dividend Per Share Expectations • Updated dividend policy in $3.48 2015 to reflect expected $2.90 $3.08 growth in DPS of 12% - 14% $2.64 per year through at least
Slide 162: NextEra Energy Value Proposition
NextEra Energy presents an attractive value proposition NextEra Energy Value Proposition • Proven track record with experienced management team 9% - 11% / year • Consistent low-risk strategy with largely regulated and long-term contracted portfolio and growth Expected • Constructive regulatory Adjus
Slide 163: Appendix
INVESTOR CONFERENCE 2017 Appendix
Slide 164: NextEra Energy
NExTera’ ENERGY @
Slide 165: Regulatory Capital Employed
FPL’s regulatory capital employed is comprised of several distinct categories of assets Regulatory Capital Employed • FPL’s adjusted retail rate base is the 2016 13-Month Average largest category of assets – Retail portion of net plant Total $34.1 B – Retail portion of net working capital Clause AFU
Slide 166: FPL's 2016 Retail Base Regulatory Capital Structure
FPL’s regulatory capital structure is comprised of more than investor sources FPL’s 2016 Retail Base Regulatory Capital Structure(1) Ratio Cost(2) Long-Term Debt 28.3% 4.57% Investor Sources Short-Term Debt 2.4% 1.74% Common Equity 45.8% 10.50% Customer Deposits 1.4% 2.10% Deferred Taxes 22.1% 0.00%
Slide 167: 2016 Net Income Composition
FPL’s net income is largely a function of equity investment and return on equity 2016 Net Income Composition Average Average Implied Investment Equity Net Income ($ B) ($ B) ($ MM) Retail Rate Base $ 29.4 $ 13.4 $ 1,548 Non-Retail Rate Base $ 1.2 $ 0.6 $ 58 Clause Investment $ 1.8 $ 0.8 $ 85 AFUDC P
Slide 168: Energy Resources Capital Expenditures
Energy Resources has invested significantly over the last decade to grow its contracted portfolio Energy Resources Capital Expenditures(1)(2) 6 $5.2 $5.6 5 $4.7 $3.9 $4.0 4 $3.0 $3.2 $3.1 $3.0 $B 3 $2.9 2 1 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Renewables Pipelines Gas Infrastructure M
Slide 169: NextEra Energy Transmission (NEET)
NextEra Energy Transmission (NEET) is pursuing new transmission investments throughout North America NextEra Energy Transmission • Independent transmission Cumulative CapEx(1) company $1,650 ($ MM) – Includes transmission utilities $1,100 and projects outside Florida $1,450- $1,050- $1,650 – Results
Slide 170: Global Banking Relationships
NextEra Energy’s lending group is large, balanced and well-diversified Global Banking Relationships Our diverse banking relationships have enabled us to secure ~$29 billion(1) in credit from over 110 banks that span four continents 1) Reflects corporate credit facilities, commitments and term loans
Slide 171: Liquidity position and credit facilities
Our large and diverse liquidity position is backstopped by the largest bank group in the industry and supports our ability to execute on our capital investment plans $12 Corporate Credit Facilities(1) by Large Regulated Peers ($ Billions) $10 $8 $6 $11.1 $9.0 $8.4 $4 $7.4 $6.2 $5.6 $2 $4.2 $4.2 $4.2
Slide 172: Reconciliation of 2016 Adjusted EBITDA to Net Income
Reconciliation of 2016 Adjusted Earnings Before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA) to Net Income ($ in millions) GAAP Adjustments Adjusted (1) Net income 2,912 (28) 2,884 Minority interest 93 0 93 (2) Interest 1,093 (181) 912 (1) Taxes 1,383 (166) 1,217 D&A 3,077 0 3,077
Slide 173: Reconciliation of Base O&M Cents per kWh to GAAP O&M
Florida Power & Light Reconciliation of Base O&M Cents per kWh to GAAP O&M Cents per kWh Actual Actual Actual Actual Actual 1988 2000 2005 2012 2016 (in millions) Base O&M (A) $1,131 $984 $1,199 $1,500 $1,376 Below The Line 5 7 7 38 66 Clause 32 77 99 269 162 Other (5) (6) 2 (34) (4) GAAP O&M (B) 1,
Slide 174: Reconciliation of Net Income to Adjusted Earnings
Reconciliation of Net Income Attributable to NextEra Energy, Inc. to Adjusted Earnings ($ millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Net Income Attributable to NextEra Energy, Inc. $ 901 $1,281 $1,312 $1,639 $1,615 $1,957 $1,923 $1,911 $1,908 $2,465 $2,752 $2,912 Adjustmen
Slide 175: Reconciliation of EPS to Adjusted EPS
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 2.34 $ 3.23 $ 3.27 $ 4.07 $ 3.97 $ 4.74 $ 4.59 $ 4.56 $ 4
Slide 176: Definitional information
Definitional information NextEra Energy, Inc. and NextEra Energy Resources, LLC. Adjusted Earnings Expectations This presentation refers to adjusted earnings per share expectations. Adjusted earnings expectations exclude the unrealized mark- to-market effect of non-qualifying hedges, net OTTI losses
Slide 177: Cautionary Statement And Risk Factors That May Affect Future Results
Cautionary Statement And Risk Factors That May Affect Future Results This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, bu
Slide 178: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) a prolonged period of low gas and oil prices could impact NextEra Energy Resources’ gas infrastructure business and cause NextEra Energy Resources to delay or cancel certain gas infrastructure projects and for certain exist
Slide 179: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP’s inability to access sources of capital on commercially reasonable terms could have an effect on its ability to consummate future acquisitions and on the value of NextEra Energy’s limited partner interest in NextEra En
Slide 180: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 181: PAYGO Tax Equity Financing
NEP’s tax shield creates the need to employ tax equity financing for projects that generate a large portion of their economics from tax credits PAYGO Tax Equity Financing • Tax equity financing is used Project Cash Flow Split(1) to monetize tax attributes • Under tax equity, an investor makes an up-
Slide 182: NEP Portfolio Overview
NEP’s portfolio is comprised of 3 GW of renewable assets plus seven natural gas pipelines with a ~18 year weighted average remaining contract life Portfolio Overview Project COD Location Net MW Technology Counterparty Credit PPA Life Ashtabula III Dec-10 ND 62 Wind N/A 18 Baldwin Dec-10 ND 102 Wind
Slide 183: NEP expects a credit rating that compares favorably to peers
NEP expects a credit rating that compares favorably to YieldCo and high-growth MLP peers YieldCo and High Growth MLP Credit Ratings(1) YieldCo Ratings High Growth MLPs Current Stand Alone Moody's S&P Fitch Moody's S&P Fitch Moody's S&P Fitch Mid to High BB Baa3 BBB- BBB- Ba1 BB - Ba3 BB- - Ba2 BB -
Slide 184: Hypothetical Cash Flow To LP Unitholders From Acquisitions
NEP’s expected mid to high BB credit rating allows for a higher leverage target, which makes future acquisitions more accretive for LP unitholders Hypothetical Cash Flow To LP Unitholders From Acquisitions Pre-IDR Fee Post-IDR Fee Higher Modification Modification Leverage Target CAFD & CAFD Acquired
Slide 185: NEP Series A Convertible Preferred Summary Terms
NEP has reached an agreement to issue $550 MM of convertible preferred securities NEP Series A Convertible Preferred Summary Terms(1) Issuer / Securities: • NextEra Energy Partners LP/ Series A Convertible Preferred Units Commitment: • $550 MM Funding Timing: • Executed Purchase Agreement on June 20
Slide 186: IDR Fee Modification (Continued)
By reducing the amount of top-tier IDRs by 50%, we expect future acquisitions to be more accretive to LP distributions IDR Fee Modification (Continued) LP ROEs are expected to increase from the high single-digits to the low double-digits on future acquisitions 1) Illustrative for new acquisition pro
Slide 187: Expected Cash Available for Distribution
NEP is on-track to meet its 2017 run-rate Adjusted EBITDA and CAFD expectations Expected Cash Available for Distribution(1) (December 31, 2017 Run Rate CAFD) $960-$1,060 ($15-$25) ($60-$70) $875-$975 ($290-$320) ($240-$280) $ MM ($30-$35) ($3-$8) $310-$340 (2) (3) (4) (5) 1) Project-Level Adjusted E
Slide 188: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA and CAFD Expectations This presentation refers to adjusted EBITDA, CAFD, and project-level CAFD expectations. NEP’s adjusted EBITDA expectations represent projected (a) revenue less (b) fuel expense, less (c) project operating exp
Slide 189: Cautionary Statement And Risk Factors That May Affect Future Results
Cautionary Statement And Risk Factors That May Affect Future Results This presentation contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra
Slide 190: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) If third-party pipelines and other facilities interconnected to the Texas pipelines become partially or fully unavailable to transport natural gas, NEP's revenues and cash available for distribution to unitholders could be
Slide 191: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP's growth strategy depends on the acquisition of projects developed by NextEra Energy, Inc. (NEE) and third parties, which face risks related to project siting, financing, construction, permitting, the environment, gover
Slide 192: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The credit and business risk profiles of NEP GP and its owner, NEE, could adversely affect any NEP credit ratings and risk profile, which could increase NEP's borrowing costs or hinder NEP's ability to raise capital; NEP's