Wolfe Research 2017 Power & Gas Leaders Conference John Ketchum Chief Financial Officer September 26, 2017
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 differ are discussed in the Appendix herein and in NextEra Energy’s and NextEra Energy Partners’ SEC filings. Non-GAAP Financial Information This presentation refers to certain financial measures that were not prepared in accordance with U.S. generally accepted accounting principles. Reconciliations of historical non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the Appendix herein. Other See Appendix for definition of Adjusted EBITDA and CAFD expectations. 2
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 solar • ~4 Bcf total natural gas pipeline capacity – Seven natural gas pipelines – ~542 miles • Wind assets – ~3 Bcf of contracted capacity • Solar assets • Pipeline assets Solid distribution growth through accretive acquisitions 3 1) Portfolio as of June 30, 2017; excludes non-economic ownership interest in equity method investments
Since the IPO, NEP has grown distributions by more than 100% and delivered total unitholder return of 85% Annualized Total Unitholder Return LP Distributions (1) NEP vs. Indices $1.52 100% 85% 90% 80% 70% 60% 50% 40% 40% 33% 30% $0.75 20% 10% 0% -10% (2) NEP S&P 500 S&P 500 Utilities Index 1) Annualized basis; refer to distributions payable on the NextEra Energy Partners Investor Relations website 2) Reflects total unitholder return, assuming dividend reinvestment, as of September 20, 2017 since the IPO dated June 27, 2014 based on the IPO price of $25 Note: All other data is total shareholder return, assuming dividend reinvestment, as of August 25, 2017 since June 27, 4 2014. Source: Bloomberg
NEP’s value proposition is built upon four core strengths NextEra Energy Partners’ Core Strengths High-Quality Portfolio Financial Strength and Flexibility Issuer Credit ~3 GW Rating (3) Year-end 2017E >90% 18-Yr A3 Renewables Ba1/BB/BB+ ~1.2x Capacity of Project Debt Remaining Counterparty supports 4x-5x & Tax Equity Coverage ~4 Bcf Contract Life (1) Credit (1,2) Is Amortizing Ratio (4) Holdco debt / project Pipeline Capacity CAFD Tax-Advantaged Structure Opportunities For Growth ≥8 years Clean energy Treated as C-Corp assets at Organic ≥15 years for U.S federal tax Potential return of Energy 3rd Party purposes with capital treatment Not expected to prospects for Resources , for distributions to Form 1099 pay significant Texas Pipelines acquisitions the extent of including future U.S. federal taxes and Repowerings for investors investor’s tax development (vs K1) basis 1) Weighted on calendar year 2018 Cash Available for Distribution (CAFD) expectations for portfolio as of June 30, 2017 Moody’s Rating related to firm contract counterparties 2) Moody’s, Standard & Poor’s, and Fitch ratings, respectively 3) 4) Assumes calendar year 2018 expectations for forecasted portfolio as of 12/31/17, divided by the product of annualized LP distributions of $1.58-1.62 and 156 MM outstanding units, plus distributions made to the Series A Preferred Units Note: As of June 30, 2017, except otherwise noted; should not be construed as tax advice 5
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 and Repowerings Including Future Development 6
Existing Energy Resources’ portfolio alone could provide one potential path to 12% - 15% growth per year through 2022 Energy Resources’ Renewable Portfolio Since NEP’s IPO GW 14 ~5 GW ~13 GW 12 ~10 GW ~2 GW 10 8 6 4 2 - (1) Renewables Portfolio MW Sold to NEP MW Placed Current Portfolio after IPO since IPO in Service Energy Resources’ renewable portfolio is larger today than it was after NEP’s IPO 7 1) As of June 30, 2017
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 40 37 Avg: 36 GW 35 35 35 32 30 30 26 25 24 GW GW 25 25 Avg: 22 GW 20 20 13 15 15 10 10 5 5 0 0 MAKE BNEF IHS Make ABB/Ventyx BNEF IHS GTM ABB/Ventyx Roughly 60 GW of combined wind and solar are projected to be added in the U.S. through 2020 1) Sources: Bloomberg New Energy Finance; IHS Markit. The use of this content was authorized in advance. Any further use or redistribution of this content is strictly prohibited without written permission by IHS Markit; MAKE; ABB EPM Advisors Spring 2017 North American Reference Case; GTM Research U.S. Solar Market Insight Report, Q2 2017 8
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 New Combined Existing Coal Existing Nuclear Cycle Gas Excludes Tax Credits Wind and solar combined with storage to firm and shape production is expected to compete economically with other generation in the next decade Energy Resources’ estimate 1) 9 2) Represents operating cost per kWh including fuel
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 growth opportunities at the TX $190-$210 pipelines – $300 MM - $350 MM investment $145-$155 at ~6x Adjusted EBITDA multiple • Additionally, NEP currently $300-$350 has ~650 MW of wind assets investment that may be potential at ~6x repowering candidates EBITDA – Received convertible investment tax credit and are past their five- year recapture period 2017 YE Run-Rate Potential Run- – In early stage evaluation to 2017 CAFD 2020 Run-Rate CAFD (1) EBITDA Rate EBITDA determine viability NEP will continue to explore organic expansion opportunities 1) Reflects calendar year 2018 Texas Pipelines expectations for portfolio as of 12/31/17 10
There is a large addressable renewables market in which NEP can compete Third-Party Opportunities Yieldcos & MLP Trading Yields (2,3) Potential Addressable Market (1) ~$1,570 B NEP trades at a competitive yield compared to other Yieldcos and Total Midstream Market high growth MLPs ~31% ~$480 B MLPs ~$680 B Renewable Generation Market ~7% ~$46 B Yieldcos NEP 1) Source: Bloomberg New Energy Finance, National Energy Board, Bloomberg market data as of June 30, 2017; Enterprise Value, Market size assumes U.S. and Canadian renewable capacity valued at $2,000/kW 2) Current trading yield calculated as last dividend annualized divided by current stock price as of June 30, 2017 11 3) Comprised of Yieldco peers and AMZ Index constituents
We have implemented certain governance changes at NEP in order to enhance LP unitholder rights Enhancing Unitholder Governance Rights Prior Structure New Structure • New BOD at NEP LP • BOD at NEP GP Board of • Three Directors appointed by GP (NEE) • NEE appointed all Directors Directors • Four Directors to be elected by LP unitholders • (BOD) NEP GP BOD oversees management of NEP • NEP LP BOD oversees management of NEP • NEP CEO nominates and NEP LP BOD approves a slate of four Directors to stand for election annually Nomination • NEE nominates all Directors Process • LP Unitholders with 10% voting interest given proxy access rights to nominate up to two Directors • NEE and LP unitholders with more than 5% voting power limited to 5% of votes for Directors Voting • • LP unitholders do not elect First annual meeting of unitholders to elect Process directors directors will be held on December 21, 2017 • LP unitholders elect the majority of the NEP LP BOD Governance changes give LP unitholders the ability to elect a majority of NEP’s board 12
NEP’s credit ratings increase financing flexibility and debt capacity due to greater market access Corporate Credit Rating and Debt Capacity • NEP corporate credit ratings: High-Yield Term Loan B Moody’s Debt S&P Fitch Revolving Credit Ba1 BB BB+ Facility Convertible Stable Stable Stable Preferred Bank Optimal Capital Structure Term for Distribution Growth Loans • Credit profile should Convertible support HoldCo debt of 4.0x Debt PAYGO Tax Project to 5.0x project distributions Equity Financing/ Equity Refinancing New Opportunities Utilized Products NEP continues to analyze and evaluate new opportunities for financing its long-term growth 13
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