Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — FY2020 Earnings Presentation
56 slides from Nextera Energy's earnings presentation, Jan 26, 2021
Slide 1: Earnings Conference Call Fourth Quarter and Full Year 2020
Earnings Conference Call Fourth Quarter and Full Year 2020 January 26, 2021
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 delivered strong financial and operational results in 2020
NextEra Energy delivered strong financial and operational results in 2020 and continued its long track record of delivering superior returns to its shareholders NextEra Energy 2020 Highlights Total Shareholder Return(1) 40% 112% • Achieved adjusted EPS of $2.31, 30% 120% up ~10.5% from prior year 30
Slide 4: Florida Power & Light successfully executed on its strategic initiatives in 2020
Florida Power & Light successfully executed on its strategic initiatives in 2020 Florida Power & Light Highlights • Placed ~1,100 MW of cost effective solar in service on time and on budget – Part of SolarTogether community solar program and FPL “30-by-30” program to expand solar in Florida • Furthe
Slide 5: Gulf Power's performance in the past two years
Gulf Power’s performance in the past two years demonstrates the power of a great strategy and strong execution for the benefit of customers Gulf Power Execution Summary Operational Service Cost Effectiveness(1) Reliability(2) ($/Retail MWh) (Minutes) ~$32 ~101 Good ~$23 Good ~30% ~50% Reduction Impr
Slide 6: NextEra Energy Resources had a record year
NextEra Energy Resources had a record year and is uniquely positioned to take advantage of the disruptive factors reshaping the energy industry NextEra Energy Resources Highlights • Energy Resources advanced its position as the leading developer and operator of wind, solar and battery storage – Comm
Slide 7: NextEra Energy Partners had a terrific year of execution in 2020
NextEra Energy Partners had a terrific year of execution in 2020 NextEra Energy Partners 2020 Highlights • Delivered total unitholder return of 32% in 2020 • Executed multiple avenues for growth in 2020 – Acquired interests in ~1,100 MW portfolio(1) of renewables, including the partnership’s first b
Slide 8: FPL's full-year contribution to EPS increased 15 cents
FPL’s full-year contribution to EPS increased 15 cents Florida Power & Light Results Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $502 $0.25 $2,650 $1.35 $2,334 $1.20 $400 $0.20 2019 2020 2019 2020 2019 2020 2019 2020 8
Slide 9: Continued investment in the business was the primary driver of growth at FPL
Continued investment in the business was the primary driver of growth at FPL Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) $B Fourth Full $45.0 Quarter Year $40.3 $40.0 FPL – 2019 EPS $0.20 $1.20 $36.4 $35.0 Drivers: $30.0 New investments $0.03 $0.11 $25.0
Slide 10: Gulf Power's full-year contribution to adjusted EPS increased 2 cents
Gulf Power’s full-year contribution to adjusted EPS increased 2 cents from the prior year period Gulf Power Results Financial Results Regulatory Capital Employed(1) (Excluding Accumulated Deferred Income Taxes) $B $4.5 $4.1 4th Quarter Full Year $3.3 2019 2020 2019 2020 $3.0 GAAP $1.5 Net Income ($
Slide 11: The Florida economy continues to recover from the COVID-19 pandemic
The Florida economy continues to recover from the ongoing COVID-19 pandemic Florida Economy Florida Unemployment & Labor Participation Rates(1) Florida Consumer Sentiment(2) 16% 64% 110 14% 62% 100 12% 60% 90 10% 58% Labor 8% Participation 56% 80 Rate 6% (Right Axis) 54% 70 4% 52% 60 2% 50% 0% 48% 5
Slide 12: FPL and Gulf had continued strong customer growth
FPL and Gulf had continued strong customer growth Customer Characteristics FPL Retail kWh Sales FPL Growth(1,2) (Change vs. prior-year period) (Change vs. prior-year quarter) 100 Fourth Full Vero Impact 75.9 Quarter Year 80 # of UKU Impact Customer Growth & Mix 0.1% 0.7% 60 Customers (000’s) 40 + Us
Slide 13: FPL notified the Florida PSC of its intent to file in March
FPL notified the Florida Public Service Commission of its intent to file in March for rate relief in 2022 FPL Base Rate Proceeding • Four-year plan to phase in base rate adjustments to support continued investments that benefit customers(1): – $1.1 B adjustment effective January 2022 and $615 MM adj
Slide 14: FPL's rate proposal reflects commitment to long-term customer value
FPL's rate proposal reflects our commitment to delivering outstanding, long-term customer value FPL Base Rate Proceeding (cont.)(1) • Proposal would result in estimated average increase in total revenues of ~3.7% per year through 2025 • Under the proposal, FPL is expected to continue to deliver comp
Slide 15: Energy Resources' full year adjusted EPS increased ~14%
Energy Resources’ full year adjusted EPS increased ~14% over the prior year Energy Resources Results(1) Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $433 $0.22 $1,807 $0.93 GAAP: $531 $0.27 ($644) ($0.33) 2019 2020 2019 2020 2019 2020 2019 2020 $1,953 $0.99 Adjusted: $326 $34
Slide 16: Energy Resources' adjusted EPS growth driven by new and existing investments
Energy Resources’ adjusted EPS growth was primarily driven by contributions from new and existing investments Energy Resources Full Year 2020 Adjusted EPS(1) Contribution Drivers $0.02 $0.99 $1.00 $0.03 $0.07 $0.90 $0.87 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 2019 New Existing NEET 20
Slide 17: Energy Resources Development Program expectations 2021-2024
Following record origination in 2020, we are increasing our development expectations for 2021 – 2022 and introducing our 2023 – 2024 expectations Energy Resources Development Program(1) • Added ~7,000 MW to renewables backlog over the course of 2020 – Includes ~2,000 MW added since the third quarter
Slide 18: NextEra Energy EPS Summary
NextEra Energy’s adjusted earnings per share increased ~10.5% year-over-year NextEra Energy EPS Summary Fourth Quarter EPS Full Year EPS (1) GAAP 2019 2020 Change GAAP 2019 2020 Change FPL $0.20 $0.25 $0.05 FPL $1.20 $1.35 $0.15 Gulf Power $0.01 $0.03 $0.02 Gulf Power $0.09 $0.12 $0.03 Energy Resour
Slide 19: Adjusted EPS and dividends per share 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 - 2021 adjusted EPS $2.55 - $2.97 $2.40 - $2.54 $2.75 • From 2018 to 2023 expect $2.3
Slide 20: NextEra Energy Partners full year drivers
NextEra Energy Partners’ strong full year results driven primarily by contributions from new and existing projects NextEra Energy Partners – Full Year Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $1,350 $37 ($19) $700 $155 ($19) $139 $2 $1,263 ($75) $1,200 $1,104 $600 $570 $1,050 $101 $500 $900 $40
Slide 21: NextEra Energy Partners entered 2021 well-positioned
NextEra Energy Partners entered 2021 well-positioned to achieve its growth objectives NextEra Energy Partners’ Financial Strength • Acquired interests in ~1,100 MW portfolio(1) of renewable projects, including the partnership’s first battery storage project, from Energy Resources • Entered into a 10
Slide 22: 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 12/31/20 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 23: Q&A Session
Qé&A Session NeExTera’ NexTera energy" ENERGY & PARTNERS 23
Slide 24: Appendix
Appendix NeExTera’ NexTera energy" ENERGY & PARTNERS 24
Slide 25: NExTera’
NExTera’ ENERGY 2
Slide 26: 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 27: 2021 Potential Sources of Variability
Potential drivers of variability to consolidated adjusted EPS 2021 Potential Sources of Variability(1) Florida Power & Light • Timing of investment ± $0.01 NextEra Energy Resources • Wind resource(2) (± 1% deviation) ± $0.01 - $0.02 • Interest rates (± 100 bps shift in yield curve) ± $0.01 - $0.02 •
Slide 28: Energy Resources' 2020 Adjusted EBITDA by Asset Category
Energy Resources’ 2020 Adjusted EBITDA by Asset Category(1,2) 2020 Expectations as 2020 Actual of Q4 2019(3) EBITDA Comment NEER Existing Assets Contracted Renewables $2,820 - $3,120 $ 2,885 Contracted Nuclear $675 - $775 792 Favorable operations Natural Gas Pipelines $370 - $470 412 Contracted Othe
Slide 29: NextEra Energy Resources Projected 2021 Portfolio Financial Information
NextEra Energy Resources (1) Projected 2021 Portfolio Financial Information (includes NEER's share of NEP assets) Value of pre-tax tax Adjusted credits included in Pre-Tax Cash Remaining (2) (3) (4) (5) (6) (7) EBITDA adjusted EBITDA Debt Service Other Flows Contract Life NEER (8) Existing Assets Co
Slide 30: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1)(2) 2019 2020 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR Location MW Oct Nov Dec QTR YE MW QTR MW QTR MW QTR MW Oct Nov Dec QTR YE Midwest 3,741 108% 92% 100% 100% 95% 3,844 93% 3,844 97% 3,844 99% 4,004 100% 113% 93% 102% 97% West 3,286 110% 87% 84% 93% 94% 3,2
Slide 31: Percentage of PTCs allocated to tax equity investors
The percentage of PTCs allocated to tax equity investors has grown over time and remains high Wind Production Summary 2014(2) 2015 (2) 2016(2) 2017 (2) 2018(2) 2019 (2) (2) 2020 Effective Capacity (MW)(1) 10,374 11,653 12,636 13,986 13,843 15,013 16,300 Wind Production (TWh) 32.0 33.8 38.8 44.2 44.5
Slide 32: Contracted Wind and Solar Development Program
Contracted Wind and Solar Development Program(1) Wind Location MW Solar Location MW Solar Location MW 2019: 2019: 2021 – 2022 (cont.): Emmons-Logan ND 216 Quitman GA 150 Excelsior NY 280 Crowned Ridge I SD 200 Shaw Creek SC 75 Trelina NY 80 Blue Summit III TX 201 Dougherty GA 120 Watkins Glen NY 50
Slide 33: Energy Storage Development Program
Energy Storage Development Program(1) Project Location MW Duration Project Location MW Duration 2019: 2023 – 2024: Montauk NY 3 8.0 Proxima CA 5 4.0 Minuteman MA 5 2.0 Sonoran AZ 260 4.0 Total 2019: 8 CT DEEP CT 3 2.0 Crow Creek CA 20 3.0 2020: Dunn’s Bridge BOT IN 75 3.0 Cavalry BOT IN 60 3.0 Rush
Slide 34: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 9/30/20(2) ($862) Amounts Realized During 4th Quarter 4 Primary Drivers: Change in Forward Prices (all positions) 331 Interest rate hedges $402 Subtotal – Income Statement 335 Electricity related 8
Slide 35: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions) 4th Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance (4) Description 9/30/20 Realized Prices (Loss) Other 12/31/20 Pretax Amounts Gross Electricity related positions $ 729 $ (29) $ 8
Slide 36: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges – Summary of Forward Maturity ($ millions) Gain / (Loss)(1) Asset / (Liability) Balance Total Description 12/31/20 2021 2022 2023 2024 2025 - 2044 2021 - 2044 (1) Pretax amounts at share Electricity related positions $ 785 $ (123) $ (141) $ (86) $ (48) $ (387) $ (785) Gas Infra
Slide 37: Reconciliation of GAAP Net Income to Adjusted Earnings (Q4 2020)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three 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 E
Slide 38: Reconciliation of GAAP Net Income to Adjusted Earnings (Q4 2019)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended December 31, 2019) Florida Power Gulf Energy Corporate & NextEra Energy, (millions, except per share amounts) & Light Power Resources Other Inc. Net Income (Loss) Attributable to NextEra E
Slide 39: Reconciliation of GAAP Net Income to Adjusted Earnings (FY 2020)
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 40: Reconciliation of GAAP Net Income to Adjusted Earnings (FY 2019)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Twelve Months Ended December 31, 2019) Florida Power Gulf Energy Corporate & NextEra Energy, (millions, except per share amounts) & Light Power Resources Other Inc. Net Income (Loss) Attributable to NextEra
Slide 41: Reconciliation of GAAP EPS to Adjusted EPS 2005-2020
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. 2005 2020 CAGR Earnings Per Share (assum ing dilution) Attributable to NextEra Energy, Inc. $ 0.58 $ 1.48 6.4% Adjustments - pretax: Net losses (gains) associated w ith non-qualifying hedges 0.12 0.45 Change
Slide 42: FPL plans to formally file its petition and testimony in March
FPL plans to formally file its petition and testimony in March to enable a thorough review and a decision to be reached before 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
Slide 43: 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 44: 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 45: 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 and FPL's risk management tools associated with their hedging and trading pr
Slide 46: NeExTera energy’
NeExTera energy’ PARTNERS Z
Slide 47: Reconciliation of Net Income to Adjusted EBITDA and CAFD (Q4)
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q4 2020 Q4 2019 Net income $ 161 $ 83 Add back: Depreciation and amortization 71 67 Interest expense (111) (33) Income taxes 19 9 Tax credits 132 120 Amortization of intangible assets – PPAs 26 26 N
Slide 48: Reconciliation of Net Loss to Adjusted EBITDA and CAFD (Full Year)
Reconciliation of Net Loss to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) 2020 2019 Net loss $ (238) $ (404) Add back: Depreciation and amortization 271 259 Interest expense 620 702 Income taxes (19) (26) Tax credits 483 465 Amortization of intangible assets - PPAs 103 72 N
Slide 49: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1)(2) 2019 2020 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR Location MW Oct Nov Dec QTR YE MW QTR MW QTR MW QTR MW Oct Nov Dec QTR YE Midwest 1,213 108% 97% 97% 100% 96% 1,213 93% 1,213 98% 1,213 100% 1,213 100% 114% 97% 104% 99% West 1,104 111% 77% 77% 88%
Slide 50: 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 51: Expected Cash Available for Distribution (2020 Run Rate)
Expected Cash Available for Distribution(1) (December 31, 2020 Run Rate CAFD; $ MM) $1,440-$1,620 ($20-$30) ($110-$120) $1,300-$1,480 ($185-$235) ($485-$565) ($40-$45) ($5-$15) $560-$640 Project-Level Corporate IDR Fees Adjusted Debt Pre-Tax Tax Non-Cash Maintenance Estimated (2) (4) Adjusted EBITDA
Slide 52: Expected Cash Available for Distribution (2021 Run Rate)
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 53: 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 54: 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 55: 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 56: 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