Slide 1: Earnings Conference Call Fourth Quarter and Full Year 2017
Earnings Conference Call Fourth Quarter and Full Year 2017 January 26, 2018
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: Opening Remarks
NextEra Energy’s strong 2017 results set the foundation for continued growth going forward Opening Remarks • Tax reform provides an unprecedented opportunity to benefit FPL customers – Allows FPL to recover ~$1.3 B in Hurricane Irma restoration costs during current settlement agreement with no custo
Slide 4: Increasing financial expectations and extending long-term growth outlook
We are increasing the range of our financial expectations and extending our long-term growth outlook NextEra Energy’s Adjusted Earnings Per Share Expectations • Expect 2018 adjusted EPS to $9.20 - increase by ~$0.45 as a result of $9.75 $8.55 - $9.05 tax reform $8.00 - $7.45 - $7.95 $8.50 – $7.70 mi
Slide 5: NextEra Energy delivered strong financial results in 2017
NextEra Energy delivered strong financial results in 2017 NextEra Energy 2017 Highlights • NEE achieved 8.2% year-over-year adjusted EPS growth in 2017 • Outstanding execution and customer value proposition at FPL – Regulatory capital employed growth of ~10.3% year-over-year – Excellent progress on
Slide 6: FPL's full-year contribution to adjusted EPS increased 38 cents
FPL’s full-year contribution to adjusted EPS increased 38 cents Florida Power & Light Results(1) Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $371 $0.79 $344 $0.73 $1,880 $3.98 GAAP: $1,727 $3.71 2016 2017 2016 2017 2016 2017 2016 2017 Adjusted: $394 $1,930 $4.09 $371 $0.84 $
Slide 7: Tax reform provides immediate benefit to FPL customers
Tax reform provides immediate benefit to FPL customers FPL Tax Reform Impacts(1) • Utilized available reserve amortization to offset nearly all of ~$1.3 B expensing of Hurricane Irma cost recovery regulatory asset – $50 MM after-tax net impact is excluded from adjusted earnings • Expect to restore r
Slide 8: Continued investment was the primary driver of growth at FPL
Continued investment in the business was the primary driver of growth at FPL Florida Power & Light Adjusted EPS Contribution Drivers Adjusted EPS Growth Regulatory Capital Employed(1) Fourth Full $B Quarter Year 40.0 $37.6 FPL – 2016 EPS $0.79 $3.71 $34.1 35.0 Drivers: 30.0 New investments $0.11 $0.
Slide 9: Florida's economy remains healthy
Florida’s economy remains healthy Customer Characteristics & Florida Economy Retail kWh Sales Customer Growth(1,2) (Change vs. prior-year quarter) (Change vs. prior-year quarter) Fourth Full Quarter Year 100 Customer Growth & Mix 0.3% 0.6% 80 55.3 + Usage Change Due to Weather 1.2% 1.7% UKU Impact #
Slide 10: Energy Resources' 2017 adjusted EPS increased 28 cents
Energy Resources’ 2017 adjusted EPS increased 28 cents over the prior year Energy Resources Results(1) Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $1,894 $4.00 $2,963 $6.27 GAAP: $1,125 $2.41 $360 $0.77 2016 2017 2016 2017 2016 2017 2016 2017 Adjusted: $230 $1,230 $2.61 $0.4
Slide 11: Energy Resources is favorably impacted by tax reform
Energy Resources is favorably impacted by tax reform Energy Resources Tax Reform Impacts(1) • Reduction in the corporate federal income tax rate for Energy Resources is significantly accretive to earnings • $1.925 B excess deferred tax liability provided an income tax benefit during the quarter – Ex
Slide 12: Energy Resources' adjusted EPS growth driven by new investments
Energy Resources’ adjusted EPS growth was driven by contributions from new investments Energy Resources Full Year 2017 Adjusted EPS(1) Contribution Drivers $3.50 $0.77 ($0.11) ($0.16) $3.00 ($0.03) ($0.19) $2.61 $2.50 $2.33 $2.00 $0.67 Renewables $0.10 Gas pipelines $1.50 $1.00 $0.50 $0.00 2016 New
Slide 13: Record year for new wind and solar origination
Energy Resources had a record year for new wind and solar origination Energy Resources Development Program(1) • Added ~2,700 MW of new renewables projects to backlog • Announced ~700 MW of additional repowering opportunities • Commissioned ~2,150 MW of wind and solar projects, including ~1,600 MW of
Slide 14: NextEra Energy's adjusted EPS increased 8.2% year-over-year
NextEra Energy’s adjusted EPS increased 8.2% year-over-year NextEra Energy EPS Summary(1) Fourth Quarter EPS Full Year EPS GAAP 2016 2017 Change GAAP 2016 2017 Change FPL $0.79 $0.73 ($0.06) FPL $3.71 $3.98 $0.27 Energy Resources $0.77 $4.00 $3.23 Energy Resources $2.41 $6.27 $3.86 Corporate and Oth
Slide 15: NextEra Energy Adjusted Earnings Per Share Expectations
NextEra Energy Adjusted Earnings Per Share Expectations(1) 2018 $7.45 - $7.95 2019 $8.00 - $8.50 2020 $8.55 - $9.05 2021 $9.20 - $9.75 Long-Term Growth 6% - 8% CAGR through 2021 off Rate $7.70 2018 midpoint 1) See Appendix for definition of Adjusted Earnings expectations 15
Slide 16: NextEra Energy Partners 2017 Highlights
NextEra Energy Partners continued its strong execution against its strategic and growth initiatives NextEra Energy Partners 2017 Highlights • Grew distributions per unit by 15% from prior-year comparable period • Achieved full year adjusted EBITDA growth of 16% and CAFD growth of 11% • NEP year-end
Slide 17: NEP's full year results driven by portfolio additions
NEP’s full year results were driven by portfolio additions over the last year NextEra Energy Partners – Full Year Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $800 $134 ($1) ($24) ($5) $300 $743 $50 ($6) ($24) $639 $4 $246 $250 $600 $222 $200 $400 $150 $100 $200 $50 $0 $0 2016 New Existing IDR Othe
Slide 18: Federal tax rate reduction effect on NEP's tax credits and CAFD
The federal income tax rate reduction changes the pre-tax value of NEP’s tax credits, but has no effect on CAFD NextEra Energy Partners Adjusted EBITDA and CAFD Expectations(1) Pre-Tax Reform Post-Tax Reform Adjusted Adjusted EBITDA EBITDA CAFD 12/31/17 Run Rate(2) $875 – $975 MM $830 – $930 MM $310
Slide 19: Q&A Session
Q&A Session NExTera’ NexTera energy” ENERGY & PARTNERS 2 19
Slide 20: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS 2 20
Slide 21: NExTera’
NExTera’ ENERGY @
Slide 22: Tax reform resulted in impacts to 2017 financial statements
Tax reform resulted in impacts to NextEra Energy’s 2017 financial statements 2017 Tax Reform Impacts(1) ($ in millions) Income Tax Benefit Regulatory (Expense)(2) Liability(3) • FPL Impacts – Revaluation of deferred income tax liabilities $4,465 – After-tax impact of Irma shortfall and other ($50) •
Slide 23: FPL's strategy has resulted in the lowest customer bills
FPL’s strategy has resulted in the lowest customer bills among the Top 10 Investor Owned Utilities by Market Cap Average Monthly Residential Bill for Top 10 IOUs by Market Cap(1) $300 $258.36 $250 $237.15 $200 $159.53 $168.33 $150 $141.25 $120.75 $131.28 $116.39 $102.62 $111.19 $100 $50 $0 FPL(2) A
Slide 24: NextEra Energy's credit metrics remain on track
NextEra Energy’s credit metrics remain on track Credit Metrics Actual Actual Target S&P A- Range 2016 2017(1) 2018 FFO/Debt 23%-35% 28% 27% 28% Debt/EBITDA 2.5x-3.5x 3.0x 3.0x 3.0x Actual Actual Target Moody’s Baa Range 2016 2017(1) 2018 CFO Pre-WC/Debt 13%-22% 21% 21% 23% CFO-Div/Debt 9%-17% 16% 16
Slide 25: Potential drivers of variability to consolidated adjusted EPS
Potential drivers of variability to consolidated adjusted EPS 2018 Potential Sources of Variability(1) Florida Power & Light • Wholesale (primarily volume) ± $0.02 - $0.03 • Timing of investment ± $0.02 - $0.03 NextEra Energy Resources • Natural gas prices (± $1/MMBtu change) ± $0.01 - $0.02 • Wind
Slide 26: Energy Resources' 2017 Adjusted EBITDA by Asset Category
Energy Resources’ 2017 Adjusted EBITDA by Asset Category(1,2) 2017 Expectations 2017 Actual 2017 EBITDA as of Q3 2016(3) EBITDA Primary Driver of Delta Restated(4) Contracted Renewables $2,350 - $2,450 $ 2,330 Wind Resource $ 2,171 Contracted Nuclear $370 - $390 $ 410 Favorable EFOR $ 410 Contracted
Slide 27: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1)(2) 2016 2017 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR Location MW Oct Nov Dec QTR YTD MW QTR MW QTR MW QTR MW Oct Nov Dec QTR YTD Midwest 3,039 96% 101% 121% 106% 100% 3,039 101% 3,039 104% 3,039 83% 3,189 116% 102% 105% 107% 100% West 3,117 99% 103% 104% 102
Slide 28: Percentage of PTCs allocated to tax equity investors has grown
The percentage of PTCs allocated to tax equity investors has continued to grow Wind Production Summary (2) (2) (2) 2011 2012 2013 2014 2015 2016 2017 (1) Effective Capacity (MW) 8,386 8,887 10,117 10,374 11,653 12,636 13,986 Wind Production (TWh) 24.6 25.8 29.2 32.0 33.8 38.8 44.2 Implied Average Ca
Slide 29: Contracted Renewables Development Program
Contracted Renewables Development Program(1) Wind Location MW Solar Location MW 2017: 2017: Oliver III ND 99 Whitney Point CA 20 Golden Hills North CA 46 Marshall MN 62 Bluff Point IN 120 Westside CA 20 Cottonwood NE 90 TOTAL 2017 Wind: 355 Distributed Generation Various 97 Total 2017 Solar: 199 201
Slide 30: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) 1) Includes NextEra Energy’s share of contracts at consolidated projects and equity method investees 2) Removal of the hedge mark to market and settlements related to asset sales 30
Slide 31: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges – Summary of Activity ($ millions) 4th Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance (3) Description 9/30/17 Realized Prices (Loss) Other 12/31/17 Pretax Amounts Gross Generation Related: Natural gas related positions
Slide 32: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges – Summary of Forward Maturity ($ millions) (1) Gain / (Loss) Asset / (Liability) Balance Total Description 12/31/17 2018 2019 2020 2021 2022 - 2047 2018 - 2047 Pretax gross amounts Natural gas related positions $ 783.5 $ (121.6) $ (95.6) $ (86.0) $ (90.9) $ (389.4) $ (783.5) Ga
Slide 33: Reconciliation of Adjusted Earnings to GAAP Net Income (Q4 2017)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended December 31, 2017) Florida Power Energy Corporate & (millions, except per share amounts) & Light Resources Other NextEra Energy, Inc. Net Income (Loss) Attributable to NextEra Energy, Inc.
Slide 34: Reconciliation of Adjusted Earnings to GAAP Net Income (Q4 2016)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended December 31, 2016) Florida Power Energy Corporate & (millions, except per share amounts) & Light Resources Other NextEra Energy, Inc. Net Income (Loss) Attributable to NextEra Energy, Inc.
Slide 35: Reconciliation of Adjusted Earnings to GAAP Net Income (FY 2017)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Twelve Months Ended December 31, 2017) Florida Power Energy Corporate & (millions, except per share amounts) & Light Resources Other NextEra Energy, Inc. Net Income (Loss) Attributable to NextEra Energy, Inc
Slide 36: Reconciliation of Adjusted Earnings to GAAP Net Income (FY 2016)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Twelve Months Ended December 31, 2016) Florida Power Energy Corporate & (millions, except per share amounts) & Light Resources Other NextEra Energy, Inc. Net Income (Loss) Attributable to NextEra Energy, Inc
Slide 37: Reconciliation of Adjusted Earnings to GAAP Net Income (2005-2017)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. 2005 2017 CAGR Earnings Per Share (assuming dilution) Attributable to NextEra Energy, Inc. $ 2.34 $ 11.38 14.09% Adjustments - pretax: Net losses (gains) associated with non-qualifying hedges 0.47 0.46 Loss(i
Slide 38: Reconciliation of GAAP Operating Cash Flow to Adjusted Operating Cash Flow
Reconciliation of NextEra Energy, Inc. GAAP Operating Cash Flow to Adjusted Operating Cash Flow Tw elve Months Tw elve Months Ended December 31, Ended December 31, (millions) 2016 2017 Inc/(Dec) Grow th Cash flow s from operations $ 6,293 $ 6,413 $ 120 1.9% FPL clause recoveries (94) (82) Acquisitio
Slide 39: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings Expectations This presentation refers to adjusted earnings per share expectations. Adjusted earnings expectations exclude the effect of non- qualifying hedges, the effects of tax reform, net effect of gains related to the investment in
Slide 40: 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 41: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) effect of reductions in the liquidity of energy markets on NextEra Energy's ability to manage operational risks; effectiveness of NextEra Energy's and FPL's risk management tools associated with their hedging and trading pr
Slide 42: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 43: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q4 2017 2017 Net income (loss) $ (56) $ 109 Add back: Depreciation and amortization 57 226 Interest expense 44 199 Income taxes 114 167 Tax credits 70 213 Benefits associated with differential membe
Slide 44: NEP Wind Production Index
NEP Wind Production Index(1) 2016 2017 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR Location MW Oct Nov Dec QTR YTD MW QTR MW QTR MW QTR MW Oct Nov Dec QTR YTD West 659 104% 101% 112% 106% 102% 659 90% 909 92% 909 85% 909 116% 100% 90% 102% 93% Texas 250 120% 82% 91% 98% 92% 250 89% 250 91% 250 82% 500 1
Slide 45: NEP's holdco leverage target consistent with credit ratings
NEP’s holdco leverage to project distributions metric target of 4.0x – 5.0x is consistent with its strong mid– to high–BB credit ratings Credit Metrics(1) BB Target Target (2) S&P Range YE 2017 YE 2018 Holdco Debt/EBITDA 4.0x - 5.0x 3.0x - 4.0x 4.0x - 5.0x Ba1 Target Target (3) Moody's Range YE 2017
Slide 46: Expected Cash Available for Distribution (12/31/17 Run Rate)
Expected Cash Available for Distribution(1) (December 31, 2017 Run Rate CAFD) $915-$1,015 ($15-$25) ($60-$70) $830-$930 ($240-$290) ($225-$275) $ MM ($30-$35) ($3-$8) $310-$340 Project-Level Corporate IDR Fees Adjusted Debt Pre-Tax Non-Cash Maintenance Estimated Adjusted Expenses EBITDA Service (2)
Slide 47: Expected Cash Available for Distribution (12/31/18 Run Rate)
Expected Cash Available for Distribution(1) (December 31, 2018 Run Rate CAFD) $1,100-$1,250 ($20-$30) ($75-$85) $1,000-$1,150 ($240-$320) ($330-$410) ($30-$35) ($5-$15) $360-$400 Project-Level Corporate IDR Fees Adjusted Debt Pre-Tax Non-Cash Maintenance Estimated Adjusted Expenses EBITDA Service (2
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.) A change in the jurisdictional characterization of some of the Texas pipeline entities' assets, or a change in law or regulatory policy, could result in increased regulation of these assets, which could have a material adve
Slide 51: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The natural gas pipeline industry is highly competitive, and increased competitive pressure could adversely affect NEP's business; NEP may not be able to access sources of capital on commercially reasonable terms, which wou
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 currently cannot remove NEP GP without NEE’s consent; NEE’s interest in NEP GP and the control of NEP GP may be transferred to a third party without unitholder consent; The IDR fee may be assig