Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (March 2021)
59 slides from Nextera Energy's investor presentation, March 2021
Slide 1: February/March 2021 Investor Presentation
February/March 2021 Investor Presentation
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 • ~$170 B market capitalization(1) • ~57 GW in operation(2) • ~$128 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, and the 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(1) residential customer bills remain ~30% below the nati
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% $0.66 60% 49% 40% 32% 10% 20% '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 0% 0% 0% One Year Three Year 238% Di
Slide 6: Our growth strategy has led to real change in relative position
Over a sustained period of time, our growth strategy has led to real change in relative position Top 20 Global Utility Equity Market Capitalization(1) As of 6/1/2001 ($ MM) As of 1/25/2021 ($ MM) Rank Market Cap Rank Market Cap 1 $38,574 1 $170,185 NextEra Energy 2 $38,185 2 $102,789 3 $34,476 3 $90
Slide 7: Our 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: Our strategy has generated real value for all stakeholders
Our strategy has generated real value for all stakeholders ESG Highlights(1) Environment Customers • 47% better CO2 emissions rate than • 30% lower bills than the national average industry average in 2020 • 63% better operating costs than industry • World’s leading wind, solar, and battery average i
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 Coal Under- Electrification Energy Territory Retirements grounding Services Expansion FPL Hydrogen Battery FPL Solar FPL T&D FPL New Infrastructure Generation Storage Expect >$60 B FPL of capital Capital
Slide 10: We expect the industry's disruptive factors will further expand and accelerate
We expect the industry’s disruptive factors will further expand and accelerate over the coming years Disruptive Industry Changes Today Potential Cost per MWh Post-2025(1) AI / ($/MWh) Machine Learning Near-Firm Wind $20 - $30 EV & Renewables / Hydrogen Near-Firm Solar Storage $30 - $40 Mobility Natu
Slide 11: Florida Power & Light is recognized as 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 • 5.6+ MM customer accounts • ~31 GW in operation • Operating revenues • FPL: ~$12
Slide 12: FPL has significant investment opportunities across its system
FPL 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 ~$94 T&D Storm Hardening All Other T&D Solar and Battery Other Gene
Slide 13: Smart capital investments at Gulf Power have helped reduce non-fuel O&M costs
Smart capital investments at Gulf Power have helped reduce non-fuel O&M costs by ~30% while driving meaningful increase in net income growth Gulf Power Execution Summary: Financial Operational Cost Effectiveness(1) Return on Equity ($/Retail MWh) (%) $32 Good 11.00% 11.10% $23 ~30% +10 bps reduction
Slide 14: Gulf Power's emissions profile has improved significantly
Over the same period, Gulf Power’s emissions profile has improved significantly, including 20% improvement in CO2 emissions in just 2 years Gulf Power Execution Summary: Emissions CO2 NOx (Lbs/MWh) (Lbs/MWh) 1,680 Good 1.05 Good 1,369 0.73 ~20% ~30% reduction reduction 2018 2020 2018 2020 SOx PM10(1
Slide 15: Gulf Power's generation and system reliability have improved substantially
In just two years, Gulf Power’s generation and system reliability have improved substantially, enabling Gulf Power to be there for our customers when they need us most Gulf Power Execution Summary: Reliability Generation EFOR(1) Service Reliability(2) (%) (minutes) ~5.1% Good ~101 Good ~95% ~50% ~53
Slide 16: FPL and Gulf Power commitment to communities through relief programs
FPL and Gulf Power have an unwavering commitment to the communities we serve, providing ~$75 MM to date in relief through various programs and initiatives Customer Focused Pandemic Response Accelerated Our smart capital One-time credit bill relief credits investments help of up to of $200 MM create
Slide 17: 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 operation Wind – ~18 GW wind Natural Gas Nuclear – ~4 GW solar Universal Solar – ~2 GW nuclear Storage – ~2 GW natural gas/o
Slide 18: Energy Resources' renewables development opportunities have never been stronger
We believe Energy Resources’ renewables development opportunities have never been stronger Low Cost Battery Battery Renewables Storage Storage Nuclear/Coal- Nuclear/Coal- Technology to-Renewables to-Renewables Improvements Buy Build Switching Switching Cheaper Cheaper ~80 GW Federal Tax Development
Slide 19: Energy Resources' competitive advantages position us to capitalize on renewables development
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 January 26, 2021) 2021 – 2022 Updated 2023 – 2024 New 2019 – 2020 2021 – 202
Slide 20: Technology improvements and capital cost declines 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) (Including Investment Tax Credits) $/MWh $/MWh $70 $160 $
Slide 21: Increased manufacturing capacity has resulted in energy storage cost declines
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 22: Low cost, near-firm renewables are expected to create significant long-term demand
Low cost, near-firm renewables are expected to create significant long-term demand in the power sector Wind & Solar Market Potential(1) Average Annual Average Annual Wind Additions Market Solar Additions Growing ~15% annually on ~18 – 20 average GW/Year ~12 – 15 GW/Year ~10 GW/Year ~10 GW/Year 2019
Slide 23: The many end-uses for hydrogen make it a leading pathway to a 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 24: Hydrogen provides a pathway to achieving a zero-carbon future
Hydrogen provides a pathway to achieving a zero-carbon future in power as well as through the electrification of transportation and industrial sectors Hydrogen Opportunity(1) Potential 2050 Zero Carbon • NextEra Energy is an early 2019 Renewables Deployment mover in green hydrogen ~5-8x ~19-24x • Wi
Slide 25: We remain well positioned to continue our strong adjusted EPS and dividends per share growth
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 - 2021 adjusted EPS $2.55 - $2.97 $2.40 - $2.54 $2.75 • From 2018 to 2023 expect $2.3
Slide 26: 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 Annual Total Return Potential 345 Investment grade(1) ~10% - 12% ~8% 230 Market capitalization > $20 B Adj. EPS CAGR > 8% past 5 132 years(2) NEE (5) (3) Median S&P 500 65 ‘19
Slide 27: NextEra Energy Partners
NexTera energy’ PARTNERS Z
Slide 28: 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 • ~5,830 MW of renewables(2) – ~4,855 MW wind – ~975 MW solar(2) • ~4.3 Bcf
Slide 29: NEP's value proposition is driven by its high-quality portfolio and financial strength
NEP’s 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 contact life(1) Clean Energy – Diversified with ~60 Acquisitions coun
Slide 30: NEP continues to focus on investing in long-term contracted clean energy assets
NEP 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 Battery Acquisitions Asset to Stora
Slide 31: Acquisitions from Energy Resources provide clear visibility to continued growth at NEP
Acquisitions from Energy Resources provide clear visibility to continued growth at NEP Energy Resources’ Renewable Portfolio Since NEP’s IPO(1) GW 50 ~30 GW - ~15 GW 45 GW 45 40 35 30 ~13 GW 25 ~12 GW ~5 GW 20 15 10 ~10 GW 5 0 NEER's MW Placed in MW Sold since Current Additional Current Portfolio (2
Slide 32: NEP is well positioned to benefit from significant wind and solar growth
NEP is well positioned to benefit from the significant wind and solar growth that is expected over the coming years NEP & Long-Term Renewables Demand U.S. Renewable Energy Capacity through 2030 U.S. Renewables Penetration ~500 GW ~40% ~15% CAGR in MWh generation ~200 GW ~100 GW 9% ~30 GW – 45 GW ~6
Slide 33: NEP's balance sheet and financing flexibility are expected to create a sustainable base for growth
NEP’s balance sheet and financing flexibility are expected to create a sustainable base for future growth Financial Flexibility Corporate Credit Convertible PAYGO Tax High-Yield • NEP corporate credit ratings: Equity Equity Debt Portfolio Financing – S&P: BB, stable Revolving Credit – Moody’s: Ba1,
Slide 34: NextEra Energy Partners remains well positioned to deliver on its growth objectives
NextEra Energy Partners remains well positioned to deliver on its growth objectives NextEra Energy Partners Adjusted EBITDA and CAFD Expectations Adjusted EBITDA CAFD 12/31/20 Run Rate(1) $1,300 – $1,480 MM $560 – $640 MM 12/31/21 Run Rate(2) $1,440 – $1,620 MM $600 – $680 MM Unit Distributions 2021
Slide 35: 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 & NEP Total Return Potential 672 Debt / EBITDA(1) < 5.25x ~3% 15% - 18% 12% - 15% 71 Dividend yield > 3% 11 DPS growth > 60% past 5 years 2 ‘18 – ‘22E DPS C
Slide 36: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z 36
Slide 37: NextEra Energy
NEXT@Cra ENERGY &%
Slide 38: We have 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: NEE vs. U.S. Electric Power Sector 127% increase in 1500 clean electricity generation(3) 1300 28% 1100 better ~57 MM tons of CO2 avoided CO2 Lbs/ 900 emissions in M
Slide 39: FPL is leading the industry with a highly reliable, modern and clean generation fleet
FPL is leading the industry with a highly reliable, modern and clean generation fleet FPL Clean Energy Generation • Executing one of the world’s largest solar expansions – FPL 30x30 plan to install 30 million solar panels in Florida by 2030 – SolarTogether – largest community solar program in U.S. •
Slide 40: FPL provides customers a best-in-class value proposition
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 ~$137 ~131 ~$94 Good Good 30% 62% ~50 lower better National
Slide 41: 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 25% 27%
Slide 42: Our commitment to safety is a hallmark of our operating culture
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 43: Building relationships and supporting local communities
We recognize the importance of building relationships and supporting local communities where we live and work Supporting Our Communities >$1.7 B in ~$100 B state and >$19 MM capital local taxes charitable invested and fees giving in since 2011 paid in 2020 2020 ~$75 MM in FPL Office of Tribal energy
Slide 44: Our approach to sustainability engages all levels of the company
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 45: Sound corporate governance and oversight
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 • 13 of 14 directors are independent • Special meeting threshold of 20% • Independent lead director •
Slide 46: 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% 21% 23.0% >21% 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% 20.0% >17% CFO-Div/
Slide 47: U.S. Federal tax incentives for completed renewables projects have been extended
U.S. Federal tax incentives for completed renewables projects have been extended into 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 Deadline ITC Du
Slide 48: Reconciliation of GAAP Net Income to Adjusted Earnings
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Twelve Months Ended December 31, 2020) Florida Power Gulf Energy Corporate & NextEra Energy, (millions, except per share amounts) & Light Power Resources Other Inc. Net Income (Loss) Attributable to NextEra
Slide 49: 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) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016(2) 2017(2) 2018 2019 2020 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 0.58 $ 0.81 $ 0.82 $ 1.02 $
Slide 50: 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 51: 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 52: 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 53: NextEra Energy Partners
NeExTera energy’ PARTNERS Ve
Slide 54: NextEra Energy Partners' credit metrics remain on track
NextEra Energy Partners’ credit metrics remain on track Credit Metrics BB Downgrade Actual Target (1) (4) (5) S&P Range Threshold 2020 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(5) Total Consolidated Debt/EBITDA
Slide 55: Expected Cash Available for Distribution
Expected Cash Available for Distribution(1) (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 (2) Adjusted EBITDA Exp
Slide 56: 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 57: 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 58: 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 59: 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