Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (August 2021)
70 slides from Nextera Energy's investor presentation, August 2021
Slide 1: August 2021 Investor Presentation
August 2021 Investor Presentation 1
Slide 2: Cautionary Statements And Risk Factors That May Affect Future Results
Cautionary Statements And Risk Factors That May Affect Future Results These presentations include 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: NextEra Energy is comprised of strong businesses supported by a common platform
NextEra Energy is comprised of strong businesses supported by a common platform • ~$153 B market capitalization(1) • ~58 GW in operation(2) • ~$135 B in total assets(3) • The largest electric utility • The world leader in in the United States by electricity generated retail MWh sales from the wind a
Slide 4: NextEra Energy's strategic focus remains on investing for customers, shareholders, environment
NextEra Energy’s strategic focus remains on investing for the benefit of customers, shareholders, and the environment NextEra Energy Strategic Focus • FPL’s continued smart investments further enhance its best-in- class value proposition – FPL residential customer bills remain well below the nationa
Slide 5: 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 Total Shareholder Return(1) $2.31 40% 120% 112% 30% 100% 30% 80% 20% 18% $0.66 60% 49% 40% 32% 10% 20% '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 0% 0% 0% One Year Three Year 238% Di
Slide 6: Growth strategy has led to real change in relative position
Over a sustained period of time, our growth strategy has led to real change in relative position Top 20 Global Utility Equity Market Capitalization(1) As of 6/1/2001 ($ MM) As of 7/31/2021 ($ MM) Rank Market Cap Rank Market Cap 1 $38,574 1 $152,821 NextEra Energy 2 $38,185 2 $93,793 3 $34,476 3 $80,
Slide 7: Core strategy has focused on ESG impacts for more than 25 years
Our core strategy has focused on the importance of ESG impacts for more than 25 years • Vision to be largest, most profitable clean energy provider in the world • Vision informed by our values: • We are committed to excellence • We do the right thing • We treat people with respect • Aim to be the mo
Slide 8: NextEra Energy recognized by S&P for ESG leadership
NextEra Energy was recently recognized by S&P for its ESG leadership and “best in class” preparedness ESG Highlights(1) Environment Customers(2) • 47% better CO2 emissions rate than • 30% lower bills than the national average industry average in 2020 • 64% better operating costs than industry • Worl
Slide 9: We are well positioned to continue our track record of growth
We are well positioned to continue our track record of growth Wholesale FPL Fleet FPL & Service Solar Under- Electrification Energy Territory Together grounding Services Expansion FPL Hydrogen Battery FPL Solar FPL T&D FPL New Infrastructure Generation Storage Expect >$60 B FPL of capital Capital Gu
Slide 10: Clean energy transformation will further expand and accelerate
We expect the industry’s clean energy transformation will further expand and accelerate over the coming years Disruptive Industry Changes Today Potential Cost per MWh Mid-2020s(1) AI / ($/MWh) Machine Learning Near-Firm Wind $20 - $30 EV & Renewables / Hydrogen Near-Firm Solar Storage $30 - $40 Mobi
Slide 11: Florida Power & Light is one of the best utility franchises in the U.S.
Florida Power & Light is recognized as one of the best utility franchises in the U.S. Florida Power & Light Company(1) • One of the largest electric utilities in the U.S. • Vertically integrated, retail rate-regulated • ~5.7 MM customer accounts • ~32 GW in operation • Operating revenues • FPL: ~$12
Slide 12: FPL has significant investment opportunities across its system
FPL, including Gulf Power, has significant investment opportunities across its system that are expected to generate customer savings and further enhance reliability FPL 1000-kWh 2019-2022 Residential Bill(1) Capital Expenditures(2) ~$161 ~42% Lower ~$29 B ~$94 T&D Storm Hardening All Other T&D Solar
Slide 13: FPL 2019 – 2022 Capital Expenditures
FPL, including Gulf Power, has significant investment opportunities across its system that are expected to generate customer savings and further enhance reliability FPL 2019 – 2022 Capital Expenditures(1) Projected Recovery Opportunity Status Investment(2) Mechanism Dania Beach Clean Energy Expected
Slide 14: FPL long-term strategy delivering best-in-class customer value proposition
At FPL, we are continuing to focus on the long-term strategy that has delivered our best-in-class customer value proposition FPL Customer Value Focus Operational Service Cost Effectiveness(1) Reliability(2) ($/Retail MWh) (Minutes) $13.54 ~58 ~19% ~$11.00 ~14% ~50 Good Reduction Good Improvement in
Slide 15: Smart capital investments at Gulf Power have reduced non-fuel O&M costs
Smart capital investments at Gulf Power have helped reduce non-fuel O&M costs by ~30% while driving meaningful improvements in emissions and reliability Gulf Power Execution Summary Operational Cost Effectiveness(1) CO2 Emissions Rate ($/Retail MWh) (CO2 Lbs./MWh) $32 ~30% 1,680 ~20% Good Good Reduc
Slide 16: Proposed settlement in 2021 base rate proceeding keeps bills low
Proposed settlement agreement in 2021 base rate proceeding keeps bills low and accelerates solar buildout FPL(1) Base Rate Request Proposed Settlement • Key elements of proposed settlement with Office of Public Counsel (OPC), Florida Retail Federation (FRF), Southern Alliance for Clean Energy (SACE)
Slide 17: FPL Base Rate Request Proposed Settlement (Cont'd)
Proposed settlement agreement in 2021 base rate proceeding keeps bills low and accelerates solar buildout FPL(1) Base Rate Request Proposed Settlement (Cont’d) • Other features of the proposed agreement support FPL’s continued investment to benefit customers and innovation to plan for a cleaner ener
Slide 18: Energy Resources is the leading North American clean energy company
Energy Resources is the leading North American clean energy company Energy Resources • World leader in electricity generated from the wind and sun • ~26 GW(1) of generation in Wind operation Natural Gas – ~18 GW wind Nuclear Universal Solar – ~4 GW solar Storage – ~2 GW nuclear Other Pipeline – ~2 G
Slide 19: Energy Resources well positioned to benefit from electrification
Energy Resources is well positioned to benefit as the US pursues electrification to deliver economic carbon reductions Competitive Advantages • Scale advantage enabling us to buy, 2020 Top 10 US Capital Investors(1) build and operate cheaper $25 $24 – 5th largest capital spender in U.S.(1) $20 $19 $
Slide 20: Energy Resources Development Program
Energy Resources’ competitive advantages position us to continue to capitalize on what we believe is the best renewables development environment in our history Energy Resources Development Program(1) (Signed Contracts as of July 23, 2021) 2021 – 2022 2023 – 2024 2021 – 2022 2023 – 2024 2021 – 2024 S
Slide 21: Low-cost renewables with storage can help decarbonize the U.S. electric sector by 2050
Low-cost renewables combined with battery and hydrogen energy storage can help achieve full decarbonization of the U.S. electric sector by 2050 2050 Decarbonized U.S. Electric Sector(1) • Full decarbonization of the U.S. 2050 U.S. Capacity & Capex electricity sector creates GW $B opportunity for ~3,
Slide 22: Technology improvements have improved wind and solar economics
Technology improvements and capital cost declines have significantly improved wind and solar economics Wind & Solar Technology Levelized Cost of Levelized Cost of Electricity from Wind Electricity from Solar (Including Production Tax Credits(1)) (Including Investment Tax Credits) $/MWh $/MWh $70 $16
Slide 23: Energy storage cost declines enable low-cost near-firm wind and solar
Increased manufacturing capacity and technology improvements have resulted in energy storage cost declines and the ability to create low-cost near-firm wind and solar Energy Storage Costs Battery Pack 4-Hour Cost Relative to Capacity(1) Battery Storage Adder(2) $/kWh GWh $/MWh $1,400 600 $80 $71-$81
Slide 24: Energy Resources' renewables market share driven by competitive advantages
Energy Resources’ strong renewables market share is driven by its competitive advantages MW 2000 31% 2020 Wind PPAs(1) share of 1500 6.5 GW 1000 market 500 0 NEER MW 2020 Solar PPAs(1) 2500 12% 2000 share of 1500 17.8 GW market 1000 500 0 NEER Energy Resources competes against a number of small play
Slide 25: Largest contracted pipeline of battery storage projects in North America
Energy Resources has the largest contracted pipeline of battery storage projects in North America(1) 2020 Battery Storage PPAs(2) MW 1600 1400 1200 31% 1000 share of 4.6 GW 800 market 600 400 200 0 NEER In 2020, Energy Resources had a ~36% share of the solar + storage market(2), highlighting our com
Slide 26: Energy Resources pursuing green hydrogen pilot projects
Energy Resources is actively pursuing green hydrogen pilot projects to serve a variety of markets New Opportunities in Hydrogen Company Application Behind the Green Industrial Industrial Meter Solar H2 Process On-Site Green Hydrogen Fuel Grid Electrical Solar H2 Storage Cell PPA Green Delivery Forkl
Slide 27: Many end-uses for hydrogen make it a leading pathway to zero-carbon future
The many end-uses for hydrogen make it a leading pathway to a zero-carbon future across many parts of the U.S. economy Power Sector Transport Industry Buildings Backup Remote Combined Power Generation Trucks Forklifts Ammonia Methanol Heat and Power Hydrogen Recip. Trains on Non- Steel Hydrogen Buse
Slide 28: Adjusted EPS and dividends per share growth expectations
We remain well positioned to continue our strong adjusted EPS and dividends per share growth NextEra Energy’s Adjusted Earnings Per Share Expectations • Expect adjusted EPS growth in the range of 6% to 8% off $2.77 - $2.55 - $2.97 2021 adjusted EPS $2.40 - $2.75 $2.54 • From 2018 to 2023 expect $2.3
Slide 29: NextEra Energy presents a compelling investment opportunity
NextEra Energy presents a compelling investment opportunity NextEra Energy Value Proposition Drill-down of S&P 500 Companies Adj. EPS CAGR(2) 360 Investment grade(1) ~9% ~5% 230 Market capitalization > $25 B Adj. EPS CAGR > 8% past 15 87 years(2) NEE Median S&P 500 DPS Growth(4) 62 ‘19 – ‘23E Annual
Slide 30: NextEra Energy Partners
NExTera energy’ PARTNERS 2
Slide 31: NextEra Energy Partners is a best-in-class clean energy company
NextEra Energy Partners is a best-in-class clean energy company NextEra Energy Partners’ Portfolio(1) • Stable cash flows supported by: – Long-term contracts with creditworthy counterparties – Geographic and asset diversity • ~5,860 MW of renewables – ~4,855 MW wind – ~975 MW solar – ~30 MW storage
Slide 32: World's Top Generators of Wind and Solar Energy
NextEra Energy Partners owns one of the largest clean energy portfolios in the world World’s Top Generators of Wind and Solar Energy in 2020(1) 70 59 60 50 45 44 44 40 TWh 40 37 30 29 24 21 20 19 10 0 NextEra NEE A B C D E F G H NextEra NEP Energy(2) Energy Partners(3) 1) Competitor production based
Slide 33: NextEra Energy Partners' value proposition
NextEra Energy Partners’ value proposition is driven by its high-quality portfolio, financial strength and flexibility, tax-advantaged structure, and visible growth opportunities Investment Highlights • High quality portfolio with ~15 year remaining contract life(1) Clean Energy – Diversified with ~
Slide 34: NEP growth strategy focused on long-term contracted clean energy assets
NextEra Energy Partners continues to focus on investing in long-term contracted clean energy assets with strong creditworthy counterparties and attractive cash flows Growth Strategy Wind Long-Term Organic Wind Solar Contract Growth Clean Strong Energy Operations Technology Attractive Asset to Batter
Slide 35: Acquisitions from Energy Resources provide visibility to continued growth
Acquisitions from Energy Resources provide clear visibility to continued growth at NextEra Energy Partners Energy Resources’ Renewable Portfolio Since NextEra Energy Partners’ IPO(1) GW 50 ~31 GW - 45 ~12 GW 43 GW 40 35 ~15 GW 30 25 ~12 GW ~6 GW 20 15 10 ~10 GW 5 0 Energy MW Placed in MW Sold since
Slide 36: NEP positioned to benefit from wind and solar growth
NextEra Energy Partners is well positioned to benefit from the significant wind and solar growth that is expected over the coming years NextEra Energy Partners & Long-Term Renewables Demand U.S. Renewable Energy Capacity through 2030 U.S. Renewables Penetration ~520 GW ~40% ~15% ~330 GW CAGR in MWh
Slide 37: Recently announced transactions diversify NEP's portfolio
Recently announced transactions further diversify NextEra Energy Partners’ portfolio and enhance its growth profile Recently Announced Acquisitions • Agreement to acquire ~400 MW portfolio of operating wind assets for ~$733 MM(1) from a third party – Portfolio of assets is expected to contribute $63
Slide 38: NEP balance sheet and financing flexibility
NextEra Energy Partners’ balance sheet and financing flexibility are expected to create a sustainable base for future growth Financial Flexibility • NextEra Energy Partners corporate credit ratings: Convertible PAYGO Tax High-Yield – S&P: BB, stable Equity Equity Debt Portfolio – Moody’s: Ba1, stabl
Slide 39: Convertible equity financings allow efficient common equity issuance
NextEra Energy Partners’ convertible equity financings allow it to efficiently issue common equity over time NextEra Energy Partners Historical Equity and Illustrative Equity Issuance for Convertible Financings(1) 120% 39% 1% 15% 14% 9-11% 9-11% 5-7% 5-7% 2-3% 1-2% 1-2% 1-2% 1-2% ~$1,000 Percent of
Slide 40: NEP Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners remains well positioned to deliver on its growth objectives NextEra Energy Partners Adjusted EBITDA and CAFD Expectations Adjusted EBITDA CAFD 12/31/21 Run Rate(1) $1,440 – $1,620 MM $600 – $680 MM Unit Distributions 2021(2) $2.76 – $2.83 annualized rate by year-end 2020 – 20
Slide 41: NextEra Energy Partners presents a compelling investment opportunity
NextEra Energy Partners presents a compelling investment opportunity NextEra Energy Partners Value Proposition Drill-down of S&P 1000 Companies & NextEra Energy Partners Total Return Potential 598 Debt / EBITDA(1) < 5x ~3% 15% - 18% 12% - 15% 60 Dividend yield > 3% 9 DPS growth > 60% past 5 years 2
Slide 42: NextEra Energy and NEP Summary
NextEra Energy and NextEra Energy Partners are in a terrific position to deliver upon our objectives and expectations for 2021 and beyond NextEra Energy & NextEra Energy Partners Summary • At FPL, including Gulf Power, we continue to focus on delivering best-in-class customer value – Achieved throug
Slide 43: Appendix
Appendix NexTera’ Nexvera energy’ ENERGY & PARTNERS 43
Slide 44: NextEra Energy
NEXTCra ENERGY &
Slide 45: FPL anticipates final decision in base rate proceeding by end of 2021
FPL anticipates that a final decision in the base rate proceeding will be reached by the end of 2021 Estimated FPL Rate Case Timeline March Late Q2 Q4 2021 Q2 Early Q3 Q3 2021 File formal Quality of Intervenor, Final staff, and FPL Rate rate request service decision by rebuttal hearings (testimony;
Slide 46: No company has done more to reduce carbon emissions
We believe that no company in any industry has done more to reduce carbon emissions and to confront climate change Clean Energy Business Percentage of Adjusted Earnings by Source(1) 73% of Adjusted Earnings from 14% generation is from zero-carbon sources 31% 78% Non- Fossil 31% of Adjusted 18% Sourc
Slide 47: One of the lowest emissions profiles of any utility in North America
We have one of the lowest emissions profiles of any utility in North America Reducing Carbon Emissions(1,2) Average CO2 Emissions Rate: NextEra Energy vs. U.S. Electric Power Sector 75% increase in 1500 clean electricity generation(3) 1300 37% 1100 better CO2 900 ~57 MM tons of Lbs/ avoided CO2 MWh
Slide 48: Renewable energy leadership accelerated emissions progress versus peers
NextEra Energy’s renewable energy leadership has further accelerated its emissions progress versus peers Renewable Generation for CO2 Emissions Top 12 Generators by MWh(1) % Rate Reduction(3) TWh 60 70% 50 60% NextEra Energy has increased renewables 50% 40 generation more than six-fold(2) 40% 30 30%
Slide 49: FPL continues to identify smart capital investments
FPL continues to identify smart capital investments to further enhance its already best-in-class customer value proposition FPL(1) Development Highlights • Ten Year Site Plan projects that zero-emission sources will be ~40% of all energy produced across the FPL system in 2030 – ~11,700 MW of install
Slide 50: FPL leading with reliable, modern and clean generation fleet
FPL is leading the industry with a highly reliable, modern and clean generation fleet FPL(1) Clean Energy Generation • Executing one of the world’s largest solar expansions – More than 3,000 MW of solar on combined system(2) – Leads all utilities in the nation with the most solar capacity(3) – Solar
Slide 51: FPL best-in-class value proposition for customers
FPL provides its customers a best-in-class value proposition of low bills, high reliability, clean energy solutions and excellent customer service Supporting Our Customers Low Bills(1) High Reliability(2) Typical 1000 kWh Monthly Bill SAIDI ~131 ~$137 30% ~$94 62% Good Good lower better ~50 National
Slide 52: Attracting and retaining a diverse, highly skilled team
We are focused on attracting and retaining a diverse, highly skilled team that can drive innovative solutions for the benefit of customers and shareholders Diverse and Inclusive Teams • Diversity and Inclusion (D&I) D&I Metrics – Executive D&I council Women Minorities – Corporate D&I council – Annua
Slide 53: Commitment to safety
Our commitment to safety is a hallmark of our operating culture and a reflection of our focus on execution Commitment to Safety 2.5 2.2 ~82% improvement in safety 2.0 performance since 2003 1.5 OSHA_ Recordable Rate(1) 1.0 0.5 0.4 0.0 2003 2005 2007 2009 2011 2013 2015 2017 2019 2020 1) OSHA Recorda
Slide 54: Supporting Our Communities
We recognize the importance of building relationships and supporting local communities where we live and work Supporting Our Communities ~$100 B >$1.7 B in capital state and >$19 MM invested local taxes charitable since and fees giving in 2011(1) paid in 2020 2020 ~$75 MM in FPL Office of Tribal ene
Slide 55: Sustainability Governance
Our approach to sustainability engages all levels of the company from the board of directors to our employees Sustainability Governance Board of Directors and Board Committees • Oversight of the execution of our strategy including issues which could impact the long-term sustainability of our company
Slide 56: Governance Highlights
Our track record of delivering strong financial and operational performance begins with sound corporate governance and oversight Governance Highlights Board Composition(1) Governance Best Practices • 11 of 12 directors are independent • Special meeting threshold of 20% • Independent lead director •
Slide 57: NextEra Energy's credit metrics remain on track
NextEra Energy’s credit metrics remain on track Credit Metrics A- Downgrade Actual Target S&P Range Threshold 2020(1) 2021 FFO/Debt 13%-23% 20% 23.0% >20% Debt/EBITDA 3.5x-4.5x 3.6x <4.5x Baa Downgrade Actual Target Moody’s Range Threshold 2020(1) 2021 CFO Pre-WC/Debt 13%-22% 17% 20.1% >17% CFO-Div/
Slide 58: Extended U.S. Federal Tax Credits
U.S. Federal tax incentives for completed renewables projects have been extended into the middle of this 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 COD Solar Date Deadline PTC Date D
Slide 59: 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(1) (2) (2) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 0.58 $ 0.81 $ 0.82 $ 1.02
Slide 60: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings Expectations This presentation refers to adjusted earnings per share expectations. Adjusted earnings expectations exclude the cumulative effect of adopting new accounting standards, the effects of non-qualifying hedges and unrealized ga
Slide 61: 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 62: 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 risk management tools associated with its hedging and trading procedures to
Slide 63: NextEra Energy Partners
NExTera energy’ PARTNERS La
Slide 64: NextEra Energy Partners' credit metrics remain on track
NextEra Energy Partners’ credit metrics remain on track Credit Metrics BB Downgrade Actual Target S&P(1) Range Threshold 2020(4) YE 2021 HoldCo Debt/EBITDA 4.0x - 5.0x 5.0x 3.6x 4.0x - 5.0x Ba1 Downgrade Actual Target Moody's (2) Range Threshold 2020(4) YE 2021 Total Consolidated Debt/EBITDA <7.0x >
Slide 65: NEP has no material debt coming due for several years
NextEra Energy Partners has no material debt coming due for several years Debt Amortization Schedule(1) Fiscal Year Total Interest Maturity Rate Date 2021 2022 2023 2024 2025 Thereafter NEE Operating Partners LP 4.25% 2024 $ - $ - $ - $ 50 $ - $ - $ 50 NEE Operating Partners LP 4.50% 2027 - - - - -
Slide 66: Expected Cash Available for Distribution
Expected Cash Available for Distribution (December 31, 2021 Run Rate CAFD; $ MM) $1,610-$1,790 ($20-$30) ($140-$150) $1,440-$1,620 ($185-$235) ($590-$670) ($40-$45) ($5-$15) $600-$680 Project-Level Corporate IDR Fees Adjusted Debt Pre-Tax Tax Non-Cash Maintenance Estimated Adjusted EBITDA Expenses E
Slide 67: 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 68: 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 69: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP may not be able to extend, renew or replace expiring or terminated power purchase agreements (PPA), natural gas transportation agreements or other customer contracts at favorable rates or on a long-term basis; If the en
Slide 70: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP's ability to make distributions to its unitholders depends on the ability of NEP OpCo to make cash distributions to its limited partners; If NEP incurs material tax liabilities, NEP's distributions to its unitholders ma