Good day, and welcome to the NextEra Energy and NextEra Energy Partners conference call. All participants will be in listen-only mode. Should you need assistance, please signal a 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, then one on your touch-tone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Kristin Rose, Director of Investor Relations. Please go ahead. Thank you, Chad. Good afternoon, everyone, and thank you for joining our call. With me this afternoon are John Ketchum, Chairman, President, and Chief Executive Officer of NextEra Energy, Kirk Crews, Executive Vice President and Chief Financial Officer of NextEra Energy, Rebecca Kujawa, 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. John will provide the remarks for today's call, and 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, www.nexteraenergy.com and www.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 John. Thank you, Kristen, and good afternoon, everyone. Today, I am excited to share our plans to simplify, recapitalize, and reposition NextEra Energy Partners to focus solely on renewables. Over the last five years, all sectors across the U.S. economy have experienced a significant shift towards decarbonization. This shift is driving a strong outlook for new renewables and clean energy technologies and is supported by tremendous decarbonization tailwinds, including the low-cost nature of renewables, the passage of the Inflation Reduction Act, and corporate sustainability goals, just to name a few. The most compelling rationale is simple: customers value low-cost, reliable, renewable energy. With the plan we are announcing today, we believe NextEra Energy Partners can become the leading 100% renewables pure-play investment opportunity. When we launched NextEra Energy Partners in 2014, our objective was to create a growth-oriented investment vehicle with an outstanding value proposition of high quality, long-term contracted renewable cash flows. We began with a roughly one gigawatt portfolio of operating renewables acquired from Energy Resources and offered unitholders an LP distribution growth per unit of 12%-15% per year. Nearly a decade later, NextEra Energy Partners has grown its renewables portfolio by roughly 9x and has become one of the largest clean energy generators in the world. Today, only six other energy companies in the world, including NextEra Energy, produce more energy from the wind and the sun than NextEra Energy Partners. We've expanded geographically and diversified our customer base. If you exclude NextEra Energy Partners' natural gas pipelines and include our latest announced renewables acquisition, the company will own projects that deliver high-quality cash flows in 30 states, serving 85 customers with an average counterparty credit rating of triple V plus via contracts with an average remaining contract life of 15 years. NextEra Energy Partners has consistently delivered long-term value for unitholders. Since the first full year after the IPO in 2015, the partnership has delivered adjusted EBITDA and Cash Available for Distribution growth of roughly 308% and 403% respectively, while LP distribution per unit has grown by nearly 350% since the IPO. Our focus remains on execution and extending our track record of delivering outstanding results for unitholders. We have often said that NextEra Energy Partners has three ways to grow: organically, through third-party acquisitions, and by purchasing assets from NextEra Energy Resources. That last pathway offers NextEra Energy Partners and its uniholders strong growth visibility. Today, Energy Resources' operating portfolio, combined with its backlog of projects and development expectations through 2026, total approximately 58 gigawatts of long-term contracted assets that can be acquired to drive NextEra Energy Partners' future growth. Those renewable assets and any other third-party assets acquired by the partnership are operated by Energy Resources' best-in-class renewables operations team. Notwithstanding this growth visibility, we believe NextEra Energy Partners' future growth potential is not reflected in its current valuation due to a few factors adversely affecting its performance. First, convertible equity portfolio financings have complicated NextEra Energy Partners' capital structure, with the related buyouts resulting in near-term equity needs in a difficult capital markets environment. Second, incentive distribution rights or IDRs, while helpful in aligning interests between NextEra Energy and NextEra Energy Partners, have been viewed as a cost of capital that consumes NextEra Energy Partners' share of cash flow that could otherwise be available to drive LP distribution growth. Third, NextEra Energy Partners owns seven natural gas pipeline assets and four point three Bcf of natural gas pipeline capacity in Texas and Pennsylvania. Some investors believe the natural gas pipeline assets dilute an otherwise clean, renewable energy portfolio. To address these issues, today, we are announcing plans for NextEra Energy Partners to simplify and recapitalize its business, positioning the company to be what I believe will be a best-in-class, 100% renewables pure-play investment opportunity. First, NextEra Energy Partners is launching a process to sell its STX Midstream and Meade natural gas pipeline assets in 2023 and 2025, respectively. Upon closing of the sale, the excess proceeds would be used to buy out the STX Midstream, 2019 NEP Pipelines, and NEP Renewables II convertible equity portfolio financings. That would eliminate the need to issue any equity in connection with the convertible equity portfolio financings through 2025. Second, NextEra Energy Partners expects to use the excess proceeds from the sale of its interest in the gas pipeline assets to finance its growth, eliminating all equity requirements through 2024. Third, to replace the Cash Available for Distribution from the expected divested pipeline assets, NextEra Energy and NextEra Energy Partners have entered into an agreement to suspend NextEra Energy's IDR fees, effective for all quarters in 2023 through 2026. By suspending the IDR fees, the partnership will be able to use that cash flow to largely replace the reduced CAFD previously available from the natural gas pipeline assets prior to their divestiture. Let me explain our logic and why we believe the plan will create value for both NextEra Energy Partners unitholders and NextEra Energy shareholders. Today, NextEra Energy Partners only has three near-term convertible equity portfolio financings with meaningful equity buyout requirements: STX Midstream, 2019 NEP Pipelines, and NEP Renewables II. Our plan recapitalizes the partnership by recycling capital from the divestiture of the gas pipeline assets and eliminates NextEra Energy Partners' 2023, 2024, and 2025 equity needs related to the convertible equity portfolio financing buyouts. After the pipeline divestitures and the three convertible equity portfolio financing buyouts, the only remaining convertible equity portfolio financing buyout with equity requirements through 2026 will be Genesis Holdings, which is limited to $294 million in 2026. We believe the pipeline assets are very attractive given their contracted nature and the markets they serve. Over the three years, we have received unsolicited interest to acquire them. We feel very confident in our ability to execute our simplification and recapitalization strategy, given the combination of our experience and current market interest in these high-quality assets. Let's turn to the IDR suspension. NextEra Energy Partners' run rate CAFD from the existing portfolio would naturally decrease once the gas pipelines are sold as planned in 2023 and 2025. We would largely substitute that lost CAFD with the cash made available from the suspended IDR fees through 2026. The IDR suspension is simple. Starting in 2023 and continuing through 2026, NextEra Energy Partners will no longer be obligated to pay IDRs, which is expected to result in $157 million of annualized CAFD savings over each of the next four years. Beyond addressing near-term equity requirements, divesting the gas pipeline assets will also enable NextEra Energy Partners to transition to a 100% renewables portfolio. Today, roughly 80% of our run rate CAFD is contributed by our renewables portfolio, which would shift to 100% following the sale of the natural gas pipelines. We believe these changes could potentially invite a new class of investors looking to participate in the energy transition, especially since we expect NextEra Energy Partners to achieve Real Zero carbon emissions in 2025. When NextEra Energy Partners successfully completes its plan, it would be singularly focused on renewable energy assets with a simplified capital structure while continuing to offer what we believe would be a market-leading growth rate. Importantly, NextEra Enery Partners has limited needs to access the equity markets in the near term. Our plan eliminates equity buyouts on the three near-term convertible equity portfolio financings via the divestiture of the natural gas pipeline assets. We expect we would use excess proceeds from these sales to finance growth to eliminate equity requirements through 2024 other than opportunistic equity issuances under our at-the-market program to fund future growth beyond 2024. NextEra Energy Partners currently has no plans to issue incremental convertible equity portfolio financings. NextEra Energy Partners is well-positioned to execute against this plan and simplify its capital structure due to its strong balance sheet. The partnership has significant financing capacity, ample liquidity, and terrific access to capital. At the end of March, NextEra Energy Partners had approximately $2.8 billion of liquidity and has numerous ways it can finance its growth going forward. By limiting its equity needs, NextEra Energy Partners would also need to acquire fewer assets, further improving its future growth visibility and runway and preserving its liquidity. I am very excited about the prospects for NextEra Energy Partners and the benefits that we expect for unitholders as a result of today's announcement. NextEra Energy Partners continues to see 12%-15% growth per year in LP distributions as being a reasonable range of expectations through at least 2026. In the current capital markets environment, we expect to grow at or near the bottom end of that range. NextEra Energy Partners continues to expect run rate contributions for adjusted EBITDA and Cash Available for Distribution from its forecasted portfolio at December 31, 2023 to be in the ranges of $2.22 billion-$2.42 billion and $770 million-$860 million respectively. As a reminder, year-end 2023 run rate expectations reflect calendar year 2024 contributions from the forecasted portfolio at year-end 2023. As always, our expectations are subject to our usual caveats. I want to conclude with some remarks regarding NextEra Energy and its long-term outlook. We believe NextEra Energy Partners' plan to reposition itself to focus solely on renewables is also beneficial for NextEra Energy shareholders. First, we would expect these transition plans, and particularly the elimination of near-term equity needs to translate into improvements in NextEra Energy Partners' trading yield and valuation. If NextEra Energy Partners' value improves, so does the value of NextEra Energy's ownership position in the partnership. Second, NextEra Energy Partners provides NextEra Energy with an avenue to recycle capital back into its renewable development business at a time when the demand for renewables has never been stronger. Finally, the impact of the suspended IDR fees on NextEra Energy are expected to be de minimis. For all these reasons, we believe these changes will result in a significant net benefit for NextEra Energy shareholders. Today, we are also reaffirming our expectations for NextEra Energy. For 2023 and 2024, we expect our adjusted earnings per share to be in the ranges of $2.98-$3.13, and $3.23-$3.43 respectively. For 2025 and 2026, we expect to grow 6%-8% off the 2024 adjusted EPS range. This equates to a range of $3.45-$3.70 for 2025, and $3.63-$4.00 for 2026. We will be disappointed if we are not able to deliver financial results at or near the top end of our adjusted EPS expectations ranges through 2026, while at the same time maintaining our strong balance sheet and credit ratings. As always, our expectations assume our usual caveats, including normal weather and operating conditions. With today's announcement, I believe NextEra Energy Partners is better positioned than ever to capitalize on the clean energy transition. Today's plan will enable NextEra Energy Partners to simplify the partnership, eliminate near-term equity needs, and focus solely on adding new CAFD creative renewables to its portfolio. I am very confident NextEra Energy Partners can become the leading 100% renewables pure-play investment opportunity, and that, in turn, will drive value for both NextEra Energy Partners unitholders and NextEra Energy shareholders. With that, I am happy to address your questions. Thank you. We will now begin our question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question will be from Steve Fleishman from Wolfe Research. Please go ahead. Yeah. Hi, good afternoon. Thanks, John. Just maybe on the pipelines, could you just remind us kind of roughly the EBITDA they provide and debt that are on them and also just more color on the assets themselves? It's been a several years since you bought them, it'd just be good to get a refresh on those assets. Thank you. Yeah, sure, Steve. First of all, the pipelines generate EBITDA that's just shy of $300 million. It breaks down to about $185 million on the Texas pipelines and about $106 million on the Meade pipelines. With regard to debt capacity, there's very little debt on the Texas pipelines. The assumed debt by the buyer would be roughly $443 million. On the Meade pipeline, the debt is right around $821 million. That would be assumed in a sale. As a reminder of these pipes, these are very valuable pipes, very well-positioned pipes. Let me talk for a minute about the Texas pipelines. The Texas pipeline assets, you might recall that we sold the Monument pipeline, which was a part of the Texas pipelines, roughly nine months, a year ago. We cleared right around 45 x, you know, EBITDA on the sale of that pipe. It was a very attractive transaction for NEP at the time. These pipes are really centered around what we call the NET Mexico pipeline. The NET Mexico pipeline, as folks may recall, is one of the main artery pipes providing natural gas supply into Mexico. It currently accounts for about 26% of Mexico's natural gas capacity and is one of the larger pipes serving Mexico out of Texas. With regard to the Meade pipelines, you know, those are complementary to the Transco pipeline. They're in Pennsylvania, very well-positioned, very well-situated, and, very valuable pipes for that reason, particularly given how difficult it is to build new natural gas pipeline capacity, in that region and in other regions, of the United States. Okay. In a nutshell, feel very confident about our ability to realize value from these pipelines. Okay, great. I'll let others ask questions. Thank you. Thank you, Steve. The next question will be from Shahriar Pourreza from Guggenheim Securities. Please go ahead. Hey, John. good afternoon. Hey, Shah. I just wanna dive in, if it's okay, on just the, on just a bit more details on the financial levers you have remaining. I mean, obviously, you noted opportunistic use of the ATM program. Just to confirm, that's for new growth funding. Beyond the ATM, would you still consider using debt capacity at the project or an optical level, maybe similar to the recently announced NEP transaction? I guess what I'm getting at is why even rely on the ATM with the various tools you have? Do you even need to tap the ATM? Thanks. Yeah, thanks, Shah. Great question. You know, for starters, we have a lot of liquidity at NEP. NEP is really well-positioned. We have $2.8 billion of liquidity, obviously a lot of debt capacity that sits at the partnership. We have terrific access to capital and other ways to finance the business as well. One of the ways could be opportunistic issuances under the ATM to finance growth in 2025 and beyond, obviously be very disciplined about that. Like I said, have a number of ways, including, as you mentioned, debt capacity at the project level as well, which you'll continue to expect to see on new drops into NEP and as debt capacity rolls off on the existing portfolio, replacing that with project-level debt going forward. Got it. Got it. Then just wanted to maybe just confirm this one too. It sounds like... I mean, do you still think there is an attractive spread, John, to recycle NEE projects down to NEP? Or do you see sort of a potential slowdown just given the tight capital market conditions? If you kind of see an attractive spread still, does the unwind of, like, the financing headwinds eventually maybe present an accretive opportunity, to your bottom end of your 12%-15% guide? Thanks. Thanks, Shah. We do continue to see an attractive spread. You know, you can look towards our last drop that we just, you know, recently announced on our last call. You know, that drop in sale from NextEra Energy into NextEra Energy Partners obviously took into account the prevailing capital markets where we have seen, you know, interest rates rise. You got to remember, even third parties that are selling to private equity and other shops, they all have back leverage models, which has increased the ROE and the cost of capital on those acquisitions. We're being very sensitive to that too, those market dynamics. When NextEra Energy is selling assets to NextEra Energy Partners, it's taking into account where the market currently sits, right? Which is in an environment where with higher interest rates, ROEs have come up. You've seen us adjust the CAFD yield to reflect that in the last sale that we made from NextEra Energy to NextEra Energy Partners. Got it. Perfect, guys. Thank you so much for this. Much appreciated. Yeah. Thank you, Shar. The next question will be from David Arcaro from Morgan Stanley. Please go ahead. Hey, thanks so much for taking my question. Just a quick follow-up on the last question too. Maybe, could you just touch on the financing outlook for NextEra? It sounds like a pretty minimal kind of EPS and cash flow impact from the reduced IDRs for the next couple of years. Just in terms of capital recycling, could you talk about the other options? If you were to, potentially slow down the drops to NEP, how do the other options look in the market right now for NextEra, capital recycling? Yeah. Yeah. Thank you, David. Let me address the first piece on NextEra on the IDR. First of all, de minimis EPS impact. I just wanna remind folks that when IDRs are paid from NEP to NEE, that they are treated as an operating expense at NEP, and, you know, 53%, 54% of that operating expense flows through to NextEra Energy in equity and earnings. When you tax effect the IDRs and you deduct the 53% of the expense in equity and earnings related to the payment of the IDRs, the EPS impact is very small to NextEra Energy, right around, you know, a couple of pennies. And then now that.. Okay, great. Thanks so much. Thank you. The next question will be from Noah Kaye from Oppenheimer. Please go ahead. Hey there. This is Andre on for Noah. I had a question on the timing of the two transactions. Why not divest the Meade pipelines earlier if the opportunity presents itself? Could there be any meaningful benefit to packaging all of the assets together from a valuation perspective? Yeah, I mean, that's always an option. You know, for us, you know, we prefer to sell Meade out in 2025. That's the year that it would flip to a full cash sweep under its existing financing. We see some benefits to hanging on to Meade until 2025 and then selling it at that time, and that the universe of buyers that we might perceive between Meade and Texas pipelines might not necessarily be aligned. Got it. Thank you so much. I'll get back in the queue. Thank you. The next question is from Pavel Molchanov from Raymond James. Please go ahead. Thanks for taking the question. I know you guys have gotten the pushback historically about the ability of climate funds, ESG funds to own NEP due to the fossil fuel exposure. What was it recently that encouraged you to kind of change your mind on this issue? Well for us, we look at this and ever since we acquired the natural gas pipeline, starting with the Texas pipelines and then the Meade pipelines, we have repeatedly received feedback from investors as to whether or not we would ever consider selling the pipes and converting NextEra Energy Partners to a 100% renewables pure play. That's something that we have always kept in the back of our mind. We felt like right now was a great time to go ahead and execute that strategy. You know, one of the big benefits of what we're announcing today, is the ability to access a lot of new sources of capital, and those could be ESG funds, those could be other folks to with, you know, climate or clean tech objectives, not only in the U.S. or Canada, but certainly overseas in Europe as well, where we have not been able to attract in the past those 100% renewable pure play investors. I think I see this as a big opportunity for NextEra Energy Partners as we will continue to work to bring new flows and sources of capital into the partnership, further expanding our access to financing sources going forward. Thank you. Following up on the pipeline divestiture, you know, gas prices obviously are volatile and highly seasonal. Are you gonna try to be opportunistic in kind of looking at the commodity market and, you know, maximizing the value of the divestiture that way? Well, the way I look at it is, you know, the Texas pipelines, which would be first up in 2023, they're largely contracted, particularly the NET Mexico pipeline that I mentioned earlier. You know, somewhat insulated from gas price volatility and commodity risk. I think we'll have a strong universe of buyers for that reason. Appreciate it. Thank you. The next question will be from Paul Patterson from Glenrock Associates. Please go ahead. Hey, good afternoon, guys. How are you, Paul? All right. After all this, how should we think about the contribution NEP has in terms of EPS and cash flow for 2023 and beyond? Well, I would think about it as, you know, being really unchanged, with what we're announcing today because we're announcing the sale of the pipes, which would occur, the Texas pipelines in 2023, Meade pipelines in 2025, with the IDRs replacing the CAFD that's being lost from the sale of the pipes when those occur. Net net, zero impact. What is the total benefit that NEP is providing in terms of net income for NEE in 2023, I guess is the better way to put it. I think Paul, John's answer is probably the best one. This is obviously Rebecca Kujawa. It's unchanged from our perspective. There's obviously some pluses and minuses, you know, overall from, you know, the different actions that we're taking today. Largely there's a negligible impact, and it's roughly consistent with what we've done before. You know, we haven't talked about it explicitly, what the breakdown is or what our expectations are from NEP as a contribution overall to NEE. I think the important takeaways are the ones that John highlighted, which is we don't expect a difference. From a NEE perspective, we're very comfortable with the reiteration of our expectations of the 6%-8% annual growth through 2026, including the exact same adjusted EPS ranges that we've provided, along with our disappointment to not be at the high end of each of those ranges. Okay. Thank you so much. Thank you, Paul. Thanks, Paul. Ladies and gentlemen, this concludes our question and answer session and thus concludes today's call. Thank you for joining NextEra Energy and NextEra Energy Partners conference call. You may now disconnect. Take care.