NextEra Energy, Inc.

Good morning everyone and welcome to the NextEra Energy and NextEra Energy Partners conference call. All participants will be in a listen-only mode. Should you need assistance, please see no conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. And at this time, I'd like to turn the conference call over to Mr. Matt Roscott, Director of Investor Relations. Sir, please go ahead.

Thank you, Jamie. Good morning, everyone, and thank you for joining our fourth quarter and full year 2019 Combined Earnings Conference call for NextEra Energy and NextEra Energy Partners. With me this morning are Jim Robo, Chairman and Chief Executive Officer of NextEra Energy, Rebecca Chiava, Executive Vice President and Chief Financial Officer of NextEra Energy, John Ketchum, President and Chief Executive Officer of NextEra Energy Resources, and Mark Hickson, Executive Vice President of NextEra Energy, all of whom are also officers of NextEra Energy Partners, as well as Eric Szilagyi, President and Chief Executive Officer of Florida Power and Light Company. Jim will provide some opening remarks and will then turn the call over to Rebecca for a review of our fourth quarter and four-year results. Our executive team will then be available to answer your questions. We will be making forward-looking statements during this call, based on current expectations and assumptions, which are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today's earnings news release, in the comments made during this conference call, in the risk factors section of the accompanying presentation, or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found on our websites, NexteraEnergy.com and NexteraEnergyPartners.com. We do not undertake any duty to update any forward-looking statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. With that, I will turn the call over to Jim. Thank you, Matt, and good morning, everyone.

2019 was a terrific year for both NextEra Energy and NextEra Energy partners. NextEra Energy's performance was strong both financially and operationally, and we had outstanding execution on our initiatives to continue to drive future growth across the company. By successfully executing on our plans, NextEra Energy extended its long track record of delivering value for shareholders, with adjusted earnings per share of $8.37, up 8.7% from 2018. Over the past 15 years, we've now delivered compound annual growth and adjusted EPS of nearly 8.5%, which is the highest among all top 10 power companies who have achieved on average compound annual growth of less than 4% over the same period. Amidst this significant growth, the company has maintained one of the strongest balance sheets and credit positions in the industry. In 2019, we delivered a total shareholder return of approximately 43%. significantly outperforming both the S&P 500 and the S&P 500 Utilities Index, and continuing to outperform both indices in terms of total shareholder return on a 1, 3, 5, 7, and 10-year basis. Over the past 15 years, we have outperformed all of the other companies in the S&P Utilities Index and 85% of the companies in the S&P 500, while more than tripling the total shareholder return of both indices. Although we are proud of our long-term track record of creating shareholder value, we remain utterly focused on the future and committed to continuing that track record going forward. During 2019, FPL successfully executed on its ongoing capital plan, including placing the highly efficient Okeechobee Clean Energy Center and an additional 300 megawatts of cost-effective solar in service on time and on budget. Smart capital investments such as these help FPL improve its already best-in-class customer value proposition. Despite customer bills that were already nearly 30% below the national average and among the lowest of all 54 electric providers in the state of Florida, earlier this month, the typical FPL residential customer bill decreased by nearly $4, or roughly 4%. FPL had continued success with its cost-savings initiatives. reducing its already best-in-class dollar per retail megawatt-hour non-fuel O&M costs by more than 5% year-over-year. These ongoing cost savings, combined with the flexibility afforded by FPL's current settlement agreement, enabled FPL to avoid a customer surcharge for the roughly $260 million of storm restoration costs related to Hurricane Dorian. In addition to low bills, FPL delivered its best-ever service reliability performance in 2019. and was recognized for the fourth time in five years as being the most reliable electric utility in the nation. Finally, last quarter we were pleased that following an extensive and thorough 18-month review, the Nuclear Regulatory Commission granted Turkey Point Units 3 and 4 their second 20-year license extensions. These units are the first nuclear power plants in the United States to achieve this milestone, and this decision supports the continued production clean, zero-emission, reliable, and affordable nuclear power in Florida for many years to come. Beyond executing on its strategic initiatives, during 2019, FPL positioned itself well for continued long-term growth. Early in the year, FPL announced its groundbreaking 30x30 plan, which is one of the world's largest solar expansions. and will result in roughly 10,000 megawatts of incremental solar capacity on FPL's solar system – FPL system. This solar expansion, combined with low-cost battery storage solutions, such as the Manatee Energy Storage Center that was announced during 2019, represent the next phase of FPL's generation modernization efforts. and are expected to further reduce FPL's CO2 emissions rates, which is already among the lowest in the nation and has declined more than 30% since 2005. In addition to the terrific progress in generation, during the year, Florida passed the Public Utility Storm Protection Plans Law that allows for clause recovery of storm-hardening investments including undergrounding. This new law supports continued hardening of FPL's already storm resilient energy grid and allows FPL to pursue these investments in a programmatic manner over the course of decades while deploying billions of dollars of incremental capital for the benefit of customers. We expect the final rules related to the new law to take effect later this quarter and that FPL will seek to begin clause recovery of its storm hardening investments beginning in 2021. With terrific visibility into significant investment programs such as these, we remain as confident as ever about FPL's ability to sustain its long-term growth trajectory while further improving our customers' value proposition. The Energy Resources team also continued its long track record of strong execution in 2019. The renewable's origination success remained particularly strong, with the team adding more than 5,800 megawatts to our backlog over the past year. as we continue operating in what we believe to be the best renewables development environment in our history. Our ongoing renewables origination success results from our ability to leverage energy resources competitive advantages, including our best-in-class development skills, large pipeline of sites and interconnection queue positions, strong customer relationships, purchasing power, best-in-class construction expertise, resource assessment capabilities, strong access to and cost of capital advantages, and world-class operations capability. More than 50% of the solar megawatts that were added to our backlog in 2019 included a battery storage component, and the current backlog has more than 2,000 megawatts of trifecta projects that combined wind, solar, and battery storage together. We also increasingly see storage as an important standalone business in its own right. as we are reviewing a number of opportunities to add storage to our existing solar sites to take advantage of the ITC and enhance the value of our existing projects for customers. This highlights the rapid transition to the next phase of renewables development that pairs low-cost wind and solar energy with a low-cost battery storage solution, as well as energy resources' unique skills to combine the three technologies into integrated, near-firm, low-cost products. Energy Resources' significant competitive advantages position it well to capitalize on the enormous disruption that is occurring to the nation's generation fleet. We continue to expect that by the middle of this decade, without incentives, new near-firm wind is going to be a $20 to $30 per megawatt-hour product, and new near-firm solar is going to be a $30 to $40 per megawatt-hour product. At these prices, new near-firm renewables will be cheaper than the operating costs of of most existing coal, nuclear, and less efficient oil and gas fired generation units. We were pleased by the 60% PTC extension that was passed in 2019, and we expect that it will support incremental wind demand in 2023 and 2024. Our confidence in renewables being the low-cost generation alternative in the middle of this decade remains stronger than ever. We expect the disruptive nature of renewables to be terrific for customers, terrific for the environment, and terrific for shareholders by helping to drive tremendous growth for this company over the next decade. Let me now turn to Gulf Power and highlight how we executed in 2019 against some of the long-term objectives that we outlined last year. As we've often discussed, two of the key hallmarks of the NextEra Energy Playbook are reduced operating costs and using those savings to fund smart capital investments for our customers. After one year of ownership, We are well on our way to executing this strategy at Gulf Power. In 2019, we reduced Gulf Power's O&M costs by approximately 20% year over year. In addition to lowering costs, we've also identified smart investment opportunities to benefit customers. In 2019, Gulf Power invested approximately $730 million, roughly two and a half times Gulf Power's average capital investment amount over the past five years. and was able to grow regulatory capital employed at roughly 11% year-over-year. Beyond realizing operating efficiencies and deploying smart capital, in the past year, Gulf Power was able to meaningfully improve its customer value proposition. Gulf Power achieved its best-ever service reliability year, which was approximately 20% better than its 2018 results. Customer service was also better, with notable improvements in speed of answer and Florida Public Service Commission complaints. There is nothing more important in our company than the safety of our employees. We made significant improvements in this area in 2019 as well, with an approximately 40% reduction in our OSHA rate at Gulf Power versus 2018. As the major capital investments that we advanced during 2019 come into service in 2020 and beyond, they will help achieve the other key objectives that we have outlined at Gulf Power, such as meaningful emissions reductions and perhaps most importantly, a significant reduction in customer bills in real terms. In addition to creating tremendous customer value, we expect that execution of the plans we laid out at Gulf Power will also generate great outcomes for our shareholders as well. In our first year of ownership, Gulf Power's adjusted earnings increased by 25% year-over-year. This outcome was even better than our plan at the start of the year and positions us well to deliver on the financial growth objectives that we outlined when we announced the acquisition. This high level of performance across the board would not have been possible without the hard work and commitment of all Gulf Power employees. While we are pleased with the results that we've achieved at Gulf Power during 2019, we remain focused on the significant execution ahead of us here to deliver even greater value to our customers and our shareholders. Finally, we were once again honored to be named for the 13th time in 14 years number one in the electric and gas utilities industry on Fortune's list of most admired companies, as well as ranked among the top 10 companies worldwide across all industries for social responsibility. During 2019 alone, NextEra Energy made approximately $13 billion in capital investments in American energy infrastructure, making us one of the top capital investors in the U.S. in any industry. None of these recognitions, nor our track record of success, would be possible without the hard work and commitment to excellence of our people, who live our core value of doing the right thing every day. In the last year, there's been an increasing focus on ESG on the part of many of our stakeholders. The fact is, our company has been focused on all of the elements of ESG for more than 25 years. We are proud of our track record here. But there is still so much more to do in this country to decarbonize the electric, transportation, and industrial sectors. NextEra Energy is living proof that you can be clean and low-cost and financially successful all at the same time. We will be at the vanguard of building a sustainable energy era that is both clean and affordable, and we are driving very hard to continue to be at the forefront of the disruption that is occurring within the energy sector. We expect that the execution of our strategy will drive meaningful CO2 emissions reductions across the country while simultaneously lowering generation costs for customers. And our continued investments in clean energy will help advance NextEra Energy toward its goal of reducing its CO2 emissions rate by 67% by 2025 from a 2005 baseline. In summary, I continue to remain as enthusiastic as ever about NextEra Energy's long-term growth prospects. In 2019, we extended our long-term track record of executing for the benefit of customers and shareholders and further developed our best-in-class organic growth prospects. Based on the strength and diversity of our underlying businesses, I will be disappointed if we're not able to deliver financial results at or near the top end of our adjusted earnings per share expectation ranges in 2020 2021 and 2022, while at the same time maintaining our strong credit ratings. We remain intensely focused on execution and continuing to drive shareholder value over the coming years. Let me now turn to NextEra Energy Partners, which also had a terrific year of execution in 2019. In the more than five years since the IPO, NextEra Energy Partners has consistently delivered on its commitments. That history of execution is supported by NextEra Energy Partners' outstanding portfolio of clean energy assets, which grew significantly and was further diversified in 2019. During the year, NextEra Energy Partners acquired a portfolio of more than 600 megawatts of wind and solar assets from energy resources. Additionally, during the fourth quarter, NextEra Energy Partners closed down the acquisition of Meade Pipeline Company. which owns an approximately 40% aggregate interest in Central Penn Line, an interstate natural gas pipeline in Pennsylvania that is backed by a minimum 14-year contract with a high credit quality customer and no volumetric risk. Finally, during the year, NextEra Energy Partners advanced an additional organic growth opportunity, announcing the repowering of 275 megawatts of wind projects. We're proud that 2019 is the first year that NextEra Energy Partners successfully executed on all of the three ways it can grow, organically, acquiring assets from third parties, and acquiring assets from energy resources portfolio, highlighting the clear flexibility and visibility into growth going forward. To support the ongoing growth investments and optimize the capital structure for the benefit of LP unit holders, NextEra Energy Partners completed a number of financings and refinancings in 2019 as well. At the start of the year, NextEra Energy Partners faced headwinds related to the PG&E bankruptcy. The team immediately focused on managing and mitigating the negative impacts of this event, and we ended 2019 having favorably addressed many of the challenges. The energy resources portfolio acquisition and associated financing that we announced last March allowed NextEra Energy Partners to complete its original 2019 growth objectives, even after excluding PG&E-related project cash flows. During the year, NextEra Energy Partners also purchased all of the outstanding holding company and operating company notes at our Genesis project. In addition to resulting in in an increase in run rate cash available for distribution through the removal of project level debt service. As a result of the purchase of the debt, NextEra Energy Partners received approximately $128 million of distributions that had been or were expected to be restricted at the project. The release of this cash was used to partially fund the debt repurchase. I remain confident about a long-term favorable resolution for our PG&E related assets. In addition to growing LP distributions by 15% year-over-year and achieving a run rate adjusted EBITDA range in excess of what was originally expected, NextEra Energy partners year-end 2019 run rate cash available for distribution expectations, assuming full contributions from PG&E related projects, represents approximately 60% growth from the comparable year-end 2018 run rate range. With this strong year-over-year growth in cash available for distribution, NextEra Energy Partners expects to be able to achieve its long-term distribution growth expectations without the need for additional asset acquisitions until 2021. As of year-end 2020, we expect to have achieved NextEra Energy Partners distribution growth objectives while maintaining a trailing 12-month payout ratio in the mid-70s range, even after excluding cash distributions from our Desert Sunlight projects. NEP delivered an attractive total unit holder return of approximately 28% in 2019, further advancing its history of value creation since the IPO. I continue to believe that the combination of NEP's clean energy portfolio, growth visibility, and flexibility to finance that growth offer LP unit holders an attractive investor value proposition. As with NextEra Energy, we remain focused on continuing to execute and delivering that unit holder value over the coming years. I'll now turn the call over to Rebecca, who will review the 2019 results in more detail.