Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Edison Electric Institute Conference 2016
52 slides from Nextera Energy's conference presentation, November 2016
Slide 1: Edison Electric Institute Conference
Edison Electric Institute Conference Phoenix, Arizona November 6-9, 2016
Slide 2: Cautionary Statements And Risk Factors That May Affect Future Results
Cautionary Statements And Risk Factors That May Affect Future Results This presentation includes 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: Table of Contents
Table of Contents • NextEra Energy, Inc. Overview (NYSE: NEE) Slide 4 • Florida Power & Light Slide 10 • NextEra Energy Resources Slide 17 • NextEra Energy Partners, LP (NYSE: NEP) Slide 26 • Financial Review Slide 34 • Appendix Slide 36 3
Slide 4: NextEra Energy is comprised of two strong businesses supported by a common platform
NextEra Energy is comprised of two strong businesses supported by a common platform • $60 B market capitalization(1) • 46 GW in operation(2,3) • $88 B in total assets(3) • Partnership with • One of the largest electric • The world leader in utilities in the nation by electricity generated from retai
Slide 5: Built on a foundation of best-in-class operational excellence and financial strength
Built on a foundation of best-in-class operational excellence and financial strength, and focused on clean generation Cost and Reliability Generation Profile 2015 Utility & Corporate Benchmarks 2015 NextEra Energy Fuel Mix MWhs(3) Nuclear Wind Industry ~$23 FL Avg ~133 Good 25% 17% FPL ~$14 FPL ~61
Slide 6: We have a long-term track record of delivering value to shareholders
We have a long-term track record of delivering value to shareholders Adjusted Earnings Per Share(1) Total Shareholder Return(2) $5.71 2% 1.4% 70% 65% $5.30 $4.97 0.7% 1% 60% $4.30 $4.39 $4.57 53% $3.84 $4.05 0% 50% $3.49 (1%) 39% $3.04 40% $2.63 (2%) 30% (3%) (4%) 20% (5%) 10% (4.8%) (6%) 0% One Yea
Slide 7: Proposed transactions with EFH, TTHC and OMI to own 100% of Oncor
NextEra Energy has announced proposed transactions with EFH, TTHC and OMI that would result in NextEra Energy owning 100% of Oncor Oncor Transaction Overview • On September 19th, received U.S. Bankruptcy Court approval for EFH to enter into merger agreements – Achieved additional creditor support fo
Slide 8: Our growth strategy has led to real change in relative position
Over a sustained period of time, our growth strategy has led to real change in relative position Top 20 Global Utility Equity Market Capitalization(1) As of 6/1/2001 ($ MM) As of 10/31/2016 ($ MM) Rank Market Cap Rank Market Cap 1 $38,574 1 $59,810 NextEra Energy 2 $38,185 2 $55,134 3 $34,476 3 $50,
Slide 9: NextEra Energy is the premier YieldCo sponsor in the sector
We believe the strength of NextEra Energy (NEE) makes it the premier YieldCo sponsor in the sector NextEra Energy: Partnership with NEP • Characteristics of a premier sponsor: NEE – Scale, financial strength and experience – Strong development track record – Incentives properly aligned with Yiel
Slide 10: 10
10
Slide 11: Florida Power & Light is one of the best utility franchises in the U.S.
Florida Power & Light is one of the best utility franchises in the U.S. Florida Power & Light • One of the largest U.S. electric utilities • Vertically integrated, retail rate-regulated • 4.8 MM customer accounts • 26.6 GW in operation • $11.7 B in(1)operating revenues • $45 B in total assets (1) As
Slide 12: Our core focus at FPL has been consistent for many years
Our core focus at FPL has been consistent for many years Areas of Focus • Unyielding commitment to Superior Customer Value Delivery customer value proposition • Focus on efficiency and Strong Financial Virtuous Circle Customer best-in-class cost Position Satisfaction performance Constructive • One o
Slide 13: Florida's economic growth remains solid
Florida’s economic growth remains solid Florida Economy Florida Unemployment(1) Florida Consumer Sentiment(2) 12% 100 90 10% 80 Sep-16 8% 70 60 6% Sep-16 50 40 4% 30 2% 20 10 0% 0 Jan-07 Jul-08 Jan-10 Jul-11 Jan-13 Jul-14 Jan-16 Jan-07 Jul-08 Jan-10 Jul-11 Jan-13 Jul-14 Jan-16 Florida Case-Shiller A
Slide 14: Our value delivery is founded on a low cost position and best-in-class operations
Our value delivery is founded on a low cost position and best- in-class operations Operational Cost Effectiveness(1) $100.00 Good Adjusted Regressed Top Decile $/Retail MWh Log/Log FPL ~$14 $10.00 1,000,000 10,000,000 100,000,000 1,000,000,000 Retail MWh (1) FERC Form 1, 2015. Excludes pensions and
Slide 15: FPL remains focused on delivering outstanding customer value
FPL remains focused on delivering outstanding customer value and deploying capital productively Year-to-Date 2016 Highlights • Outstanding customer value and execution – Ranked highest in customer satisfaction among large utilities in the southern U.S. by J.D. Power • Continued solid progress on maj
Slide 16: Proposed settlement agreement in 2016 base rate proceeding
Proposed settlement agreement in 2016 base rate proceeding FPL Base Rate Request Proposed Settlement • Key elements of proposed settlement effective January 2017 through December 2020: – Retail base revenue increases according to the following schedule: $400 MM beginning January 2017 $211 MM beginni
Slide 17: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 18: Energy Resources is a diversified clean energy company
Energy Resources is a diversified clean energy company whose skills and assets are well aligned to drive growth Energy Resources Skills and Capabilities Generation Portfolio(1) • Largest, most successful developer of renewables in North America – Consistent strategy to build, own and operate environ
Slide 19: Energy Resources' growth is driven by its best-in-class development skills
Energy Resources’ growth is driven by its best-in-class development skills NextEra Energy Resources Development Skills Wind and Solar Portfolio(1) 18,000 Customer Wind Relationships Engineering/ Regulatory 12,000 Solar Construction MW Management 6,000 0 Best-In-Class Integrated 2002 2004 2006 2008 2
Slide 20: Outstanding opportunity set for new renewables growth
We continue to have an outstanding opportunity set for new renewables growth Energy Resources Development Program(1) • 2015 – 2016 renewables development program on track – ~1.5 GW brought into service in 2015 – ~2.5 GW on track for 2016 delivery • 2017 – 2018 development program: Signed & Additiona
Slide 21: Renewables development opportunities have never been stronger
Energy Resources’ renewables development opportunities have never been stronger Drivers for Renewables • Certainty of U.S. Federal Tax incentives for renewables • Improvements in wind and solar technology and declining cost trends • Evaluating repowering opportunities across our fleet • State regula
Slide 22: U.S. Federal tax incentives for renewables extended into the next decade
U.S. Federal tax incentives for completed 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(1) During 20
Slide 23: Renewable projects are increasingly price competitive with conventional generation
Renewable projects are increasingly price competitive with conventional generation Levelized Cost of Levelized Cost of Electricity from Wind(1) Electricity from Solar(2) (Including Production Tax Credits) (Including Investment Tax Credits) $70 $160 $60 $120 $50 $/MWh $/MWh $55- $146 $40 $65 $80 $36-
Slide 24: Battery storage has the potential to be a game-changer
While still in its infancy, battery storage has the potential to be a game-changer for the renewable energy industry and for peaking capacity and T&D referral applications on the grid Storage Technology • Storage is a natural extension of Lithium Ion Battery our development business and Cost Curve a
Slide 25: Expanding into the gas pipeline business
We have leveraged our skills and capabilities from gas infrastructure activities to expand into the gas pipeline business Gas Pipeline Assets Sabal Trail and Florida Mountain Valley Pipeline Texas Pipelines(1) Southeast Connection • Energy Resources expects • Energy Resources expects • NEP completed
Slide 26: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 27: NextEra Energy Partners is focused on investing in clean energy assets
NextEra Energy Partners (NEP) is focused on investing in clean energy assets with stable cash flows NEP Overview • NEP is a growth-oriented partnership formed by NextEra Energy, Inc. (NEE) to: – Acquire contracted clean energy projects with stable, long-term cash flows from NEE and the market – Take
Slide 28: The NEP portfolio is diversified by geography and asset mix
The NEP portfolio is diversified by geography and asset mix NEP Asset Portfolio(1,2) • Wind assets: – 17 projects – ~2,346 MW • Solar assets: – 5 projects – ~442 MW • Pipeline assets: – Seven natural gas pipelines – ~3 Bcf of contracted and ~4 Bcf total capacity (1) Consolidated projects as of Octob
Slide 29: NEP has diversified its high-quality asset base
NEP has diversified its high-quality asset base while maintaining the long contract life, minimal commodity risk, and largely investment-grade counterparty mix of its portfolio NEP Portfolio Characteristics Counterparty Credit(1,2) Contract Life(2) A2 A3 21 Years 19 Years IPO Current IPO Current Ass
Slide 30: Accretive acquisitions have supported growth in CAFD and LP distributions
Accretive acquisitions funded by access to both equity and debt have supported significant growth in cash available for distribution (CAFD) and LP distributions NEP Portfolio Additions Renewables Capacity Pipeline Assets 2,788 MW ~4 Bcf 990 MW 0 IPO Current (1) IPO Current Run-Rate CAFD(2) Annualize
Slide 31: Targeting long-term capital structure with Holdco leverage of approximately 3.5x
Currently targeting a long-term capital structure utilizing Holdco leverage of approximately 3.5x project distributions after debt service HoldCo Debt Capacity $1,150-$1,250 $700 $MM $450-$550 3.5x $46-$51 $20-$25 $330-$360 $260 $10-$20 Estimated Corporate IDR Fees(2) HoldCo Cash HoldCo Current Rema
Slide 32: NEP to grow LP distributions by 12-15% annually through 2020
After the acceleration of growth in 2015, our current expectations are for NEP to grow LP distributions by 12-15% annually through 2020 NEP LP Distributions Long-Term Growth Outlook(1) $2.17-$2.47 $2.50 $2.00 $1.50 $1.38-$1.41 $1.23 $1.00 $0.50 $0.00 2015 2016 2017 2018 2019 2020 12% Growth 15% Grow
Slide 33: NEP Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners’ Adjusted EBITDA and CAFD Expectations(1,2) Adjusted EBITDA CAFD 12/31/16 Run Rate(3) $670 - $760 MM $230 - $290 MM 12/31/17 Run Rate(4) $875 - $975 MM $310 - $340 MM Unit Distributions 2016 $1.38 - $1.41 annualized rate by year end(5) 2016 - 2020 12% - 15% average annual gro
Slide 34: Financial Review
NEXT@ra ANANCIAL REVIEW
Slide 35: NextEra Energy's Adjusted Earnings Per Share Expectations
NextEra Energy’s Adjusted Earnings Per Share Expectations(1) 2016 $5.85 - $6.35 $6.60 - $7.10 2018 (6% - 8% CAGR off a 2014 base)(2) (1) See Appendix for definition of Adjusted Earnings expectations (2) If approved, the company’s announced transactions with EFH, TTHC and OMI, which would result in N
Slide 36: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z 36
Slide 37: NextEra Energy Resources
NEX Tera ENERGY &
Slide 38: Contracted Renewables Development Program
Contracted Renewables Development Program(1,2) Wind Location MW COD Solar Location MW COD Breckinridge OK 98 2015 Shafter CA 20 2015 Goshen Ontario 102 2015 Adelanto I & II CA 27 2015 East Durham Ontario 22 2015 McCoy Solar CA 250 2016 Cedar Point JV Ontario 50 2015 Blythe CA 110 2016 Golden Hills C
Slide 39: Reconciliation of Earnings Per Share to Adjusted Earnings Per Share
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share 39
Slide 40: Definitional information
Definitional information NextEra Energy, Inc. 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 on securities held in NextEra Energ
Slide 41: 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 42: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) inability or failure by NextEra Energy Resources to manage properly or hedge effectively the commodity risk within its portfolio; potential volatility of NextEra Energy's results of operations caused by sales of power on th
Slide 43: Forward Looking Statements
Forward Looking Statements Forward-looking statements also include, but are not limited to, statements about the anticipated benefits of the proposed transactions involving NEE, EFH, TTHC, OMI and Oncor, including future financial or operating results of NEE or Oncor, NEE’s, EFH’s or Oncor’s plans,
Slide 44: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 45: Expected Cash Available for Distribution (December 31, 2016 Run Rate)
Expected Cash Available for Distribution(1) (December 31, 2016 Run Rate CAFD) $750-$840(2) ($10-$20) ($40-$60) $670-$760 ($250-$270)(3) ($155-$205)(4) $ MM ($25-$30)(5) ($3-$8) $230-$290(6) Project-Level Corporate IDR Fees Adjusted Debt Service Pre-Tax Tax Non-Cash Maintenance Estimated Adjusted Exp
Slide 46: Expected Cash Available for Distribution (December 31, 2017 Run Rate)
Expected Cash Available for Distribution(1) (December 31, 2017 Run Rate CAFD) $1,000-$1,100(2) ($15-$25) ($90-$110) $875-$975 ($280-$310)(3) ($260-$290)(4) $ MM ($30-$35)(5) ($1-$5) $310-$340(6) Project-Level Corporate IDR Fees Adjusted Debt Service Pre-Tax Tax Non-Cash Maintenance Estimated Adjuste
Slide 47: NEP's tax shield creates the need for 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 8%-12% makes
Slide 48: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA and CAFD Expectations This presentation refers to adjusted EBITDA and CAFD expectations. NEP’s adjusted EBITDA expectations represent projected (a) revenue less (b) fuel expense, less (c) project operating expenses, less (d) corpo
Slide 49: 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 50: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP may incur significant costs and liabilities as a result of pipeline integrity management program testing and any necessary pipeline repair or preventative or remedial measures; The Texas pipelines’ operations could incu
Slide 51: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Acquisitions of existing clean energy projects involve numerous risks; Renewable energy procurement is subject to U.S. state and Canadian provincial regulations, with relatively irregular, infrequent and often competitive p
Slide 52: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Holders of NEP's common units have limited voting rights and are not entitled to elect NEP's general partner or NEP GP’s directors; NEP's partnership agreement restricts the remedies available to holders of NEP's common uni
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