Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Edison Electric Institute Conference 2019
61 slides from Nextera Energy's conference presentation, November 2019
Slide 1: Edison Electric Institute Conference
Edison Electric Institute Conference Orlando, Florida November 10-13, 2019
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 • ~$116 B market capitalization(1) • ~53 GW in operation(2) • ~$114 B in total assets(3) • The largest electric utility in the United States by retail MWh sales • Provides electric service • The world leader in to over 4
Slide 4: 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) $7.70 14% 15% 90% 82% 80% 10% 70% 4% 60% 5% 50% $2.48 37% 0% 40% 30% 30% -5% 20% -4% 10% '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 -10% 0% One Year Three
Slide 5: NextEra Energy maintained its status as the largest generator of wind and solar energy
In 2018, NextEra Energy maintained its status as the largest generator of wind and solar energy in the world World’s Top Generators of Wind and Solar Energy in 2018(1) Global Wind Installations(2) (TWh) (GW) 50 47 250 211 40 39 39 200 30 30 28 150 25 23 20 18 100 97 60 10 50 35 23 21 15 15 15 13 0 0
Slide 6: Our growth strategy has led to real change in relative position
Over a sustained period of time, our growth strategy has led to real change in relative position Top 20 Global Utility Equity Market Capitalization(1) As of 6/1/2001 ($ MM) As of 10/31/2019 ($ MM) Rank Market Cap Rank Market Cap 1 $38,574 1 $116,495 NextEra Energy 2 $38,185 2 $78,717 3 $34,476 3 $68
Slide 7: First to receive a Best In Class assessment from S&P on ESG preparedness
NextEra Energy was the first to receive a “Best In Class” assessment from S&P’s evaluation on ESG preparedness 2019 S&P ESG Evaluation(1) • “…high performance and innovative culture demonstrates excellent commitment to long-term sustainability” • Factors in report distinguishing NextEra Energy from
Slide 8: We are well positioned to continue our track record of growth
We are well positioned to continue our track record of growth Wholesale FPL FPL Gas & Service FPL Coal Energy Under- Utility Territory Retirements Services grounding Expansion FPL FPL FPL T&D FPL New Battery Infrastructure Solar Generation Expect Storage $50 B - $55 B of capital FPL Capital Gulf Gen
Slide 9: Industry's disruptive factors will expand and accelerate
We expect the industry’s disruptive factors will further expand and accelerate over the coming years Disruptive Industry Changes Today Potential Cost per MWh Post-2023(1) AI / ($/MWh) Machine Learning Near-Firm Wind $20 - $30 Big Data Renewables / Storage Near-Firm Solar $30 - $40 Natural Gas $30 -
Slide 10: 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 • One of the largest electric utilities in the U.S. • Vertically integrated, retail rate-regulated • 5+ MM customer accounts • ~27 GW in operation • ~$12 B in operating revenues • ~$56
Slide 11: FPL 2019 – 2022 Capital Expenditures
FPL has significant investment opportunities across its system that are expected to generate customer savings and further enhance reliability FPL 2019 – 2022 Capital Expenditures Projected Recovery Opportunity Status Investment(1) Mechanism Dania Beach Clean Energy Final regulatory approval granted
Slide 12: Growth in regulatory capital employed to drive FPL net income growth
Growth in regulatory capital employed is expected to drive FPL’s net income growth through 2022 FPL Regulatory 2019-2022 Capital Employed(1) Capital Expenditures $B $50 $47.0 - $49.0 $40 $33.7 $23 B - $30 $25 B $20 $10 T&D Storm Hardening All Other T&D $0 Solar Other Generation Other, Including Nucl
Slide 13: FPL long-term strategy delivering best-in-class customer value proposition
At FPL, we will continue 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 ~$11.10 – ~55 ~50 Good $11.78 ~5% $11.75(4) ~10% Reduction Good Improveme
Slide 14: FPL storm hardening investments since 2004 and 2005 hurricane seasons
FPL’s investments in storm hardening since the 2004 and 2005 hurricane seasons have made a significant difference for our customers Hurricane Irma (2017) Recovery Improvement Relative to Hurricane Wilma (2005) ~3 day reduction in average customer ~8 day outage reduction in total days to restore ~60%
Slide 15: FPL has built a smarter and more modern energy grid
In addition to hardening, FPL has built a smarter and more modern energy grid Building a Smarter Grid T&D Automation & Smart Meter Machine Learning Proactive Restoration Data Analytics Image Recognition • Installed more than • Deployed more than 5 • Drones used to assess 100,000 smart devices millio
Slide 16: Gulf Power acquisition expands Florida footprint and regulated operations
The acquisition of Gulf Power expands our Florida footprint and regulated operations Gulf Power • Acquisition closed 1/1/2019 • Located in Northwest Florida • ~460,000 customers • ~2,300 MW of generation in operation – ~1,600 MW coal – ~700 MW natural gas • $1.5 B in operating revenues • $5.4 B tota
Slide 17: Opportunities to improve the Gulf Power customer value proposition
Significant opportunities exist to improve the Gulf Power customer value proposition Operational Cost Effectiveness(1) Service Reliability(2) minutes $100 Adjusted Regressed ~130 Top Quartile Gulf Power 2018 Top Decile ~101 = $29.31/MWh ~93 Good ~55 $/Retail MWh FPL 2018 = Log/Log $11.78/MWh $10 Gul
Slide 18: Gulf Power bill has increased while FPL's has declined
Despite growing regulatory capital employed at roughly half the rate of FPL over the past 10 years, Gulf Power’s bill has increased significantly while FPL’s has declined 2008 vs. 2018 Historical Comparison Regulatory Capital Employed(1) 1,000-kWh Residential Bill(2) $33.7 B ~$137 ~$106 ~$106 ~$99 ~
Slide 19: Gulf Power 2019 – 2022 Capital Initiatives
We have identified several opportunities to improve the customer value proposition through smart capital investments Gulf Power 2019 – 2022 Capital Initiatives Opportunity Status Projected Recovery Investment(1) Mechanism North Florida Resiliency Development in process; target ~$400 MM Base rates Co
Slide 20: Gulf Power customers to benefit from the NextEra Energy playbook
We expect Gulf Power customers will benefit from the NextEra Energy playbook, as will our shareholders The NextEra Energy Playbook at Gulf Power Operational Cost Effectiveness(1) Regulatory Capital Employed $/Retail MWh ~$27 $4.9 B - $5.1 B_ ~50% ~14% Reduction CAGR Good $3.0 B ~$14 2018 2021E 2018
Slide 21: Gulf Power customers to benefit from the NextEra Energy playbook
We expect Gulf Power customers will benefit from the NextEra Energy playbook, as will our shareholders The NextEra Energy Playbook at Gulf Power Service Reliability(1) CO2 Emissions Rate minutes CO2 Lbs. / MWh ~1,680 ~101_ ~80 Good ~20% ~40% ~40% ~1,060 Reduction Reduction Reduction 2018 2021E 2018
Slide 22: 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 • ~24 GW(1) of generation in operation Wind – ~15 GW wind Natural Gas Nuclear – ~3 GW solar Universal Solar DG Solar – ~3 GW nuclear Storage Other – ~3 G
Slide 23: 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 Federal Tax Development ~80 GW
Slide 24: Technology improvements and capital cost declines 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 25: Wind expected to be the cheapest source of generation
Wind is expected to be the cheapest source of electric generation even after production tax credits phase down Expected Drivers of Future Wind Levelized Cost of Energy (LCOE) Reductions • Increased generation as a result of Unsubsidized Wind LCOE Roadmap(1) larger turbines $/MWh – Viability of large
Slide 26: Solar expected to be cheapest source other than wind
Solar is expected to be the cheapest source of electric generation other than wind after investment tax credit steps down Expected Drivers of Future Solar Levelized Cost of Energy (LCOE) Reductions • Continued module cost declines Solar LCOE Roadmap(1) $/MWh • Continued balance of system (BoS) savin
Slide 27: Manufacturing capacity has driven energy storage cost declines
Increased manufacturing capacity has 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 $1,400 350 $80 $71-$81 $70 $1,200 300 $60 $1,000 25
Slide 28: Continued battery cost declines to enable low-cost near-firm wind and solar
Continued declines in battery costs are expected to result in the ability to generate near-firm wind and solar at low costs even after tax credits phase down Expected Drivers of Future Energy Storage Cost Reductions Storage Adder Roadmap(1) $/MWh • Continued battery pack cost declines and efficiency
Slide 29: Low cost near-firm renewables expected to create long-term demand
Low cost, near-firm renewables are expected to create significant long-term demand 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 - 2022 2023 - 2030 2
Slide 30: Energy Resources' competitive advantages and 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 October 22, 2019) 2019 – 2020 2019 – 2020 2021 – 2022 2021 – 2022 2019 – 202
Slide 31: Average tenor of new renewable PPAs has remained consistent
By leveraging Energy Resources’ competitive advantages, the average tenor of its new renewable PPAs has remained consistent over a long period of time Weighted Average(1) Tenor of PPAs by Vintage (years) ~22 ~22 ~22 Signed Signed Signed Pre-2010 2010-2018 2019 YTD Energy Resources has extended the a
Slide 32: Well positioned to continue strong adjusted EPS growth
We remain well positioned to continue our strong adjusted EPS growth NextEra Energy’s Adjusted Earnings Per Share Expectations(1) • For 2019 through 2021, expect $10.00 - 6% - 8% growth off a 2018 base $9.40 - $10.75 of $7.70, plus the expected $8.70 - $9.95 accretion from Florida $8.00 - $9.20 acqu
Slide 33: Expect to grow dividends per share 12% - 14% per year
We expect to continue to grow our dividends per share 12% - 14% per year through at least 2020, an above average rate compared to our peers NextEra Energy Dividend Per Share Expectations • In 2018, extended expected $4.44 growth in DPS of 12% - 14% per year through at least 2020, off a 2017 base • A
Slide 34: 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 11% - 12% 362 Investment grade(1) 10% 220 Market capitalization > $20 B (4) NEE Median S&P 500(2) 139 Adj. EPS CAGR > 8% past 5 years DPS Growth(
Slide 35: NextEra Energy Partners
NExTera energy’ PARTNERS Z
Slide 36: NextEra Energy Partners has built a diversified clean energy company
In the five years since the IPO, NextEra Energy Partners has built a best-in-class diversified clean energy company NextEra Energy Partners’ Portfolio(1) • Stable cash flows supported by: – Long-term contracts with credit- worthy counterparties – Geographic and asset diversity • ~5,330 MW of renewab
Slide 37: NEP's value proposition is built upon four core strengths
NEP’s value proposition is built upon four core strengths NextEra Energy Partners’ Core Strengths High-Quality Portfolio(1) Financial Strength and Flexibility Issuer Credit Diversified ~5.3 GW Ability to Rating(4) Year-end 2018 16-Yr Portfolio with Renewables Capacity opportunistically Ba1/BB/BB+ ~1
Slide 38: NEP focuses 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 Wind Solar Organic Long-Term Growth Contract Clean Strong Energy Operations Technology Acquisitions Competitive Attractive Battery Tr
Slide 39: Acquisitions from Energy Resources provide visibility to NEP growth
Acquisitions from Energy Resources provide clear visibility to continued growth at NEP Energy Resources’ Renewable Portfolio Since NEP’s IPO(1) GW ~23 GW - ~7 GW 30 GW 30 25 ~11 GW 20 ~7 GW ~5 GW 15 10 ~10 GW 5 0 NEER's MW Placed in MW Sold to NEP Current Additional Current Portfolio Renewables Serv
Slide 40: NEP 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 8% ~23 GW – 30 GW ~5
Slide 41: NEP announced a recapitalization of the Texas Pipelines
NEP recently announced a recapitalization of the Texas Pipelines Texas Pipelines Recapitalization(1) • ~$750 MM convertible equity portfolio financing (CEPF) – Proceeds to be used to refinance ~$625 MM existing project debt and fund previously announced expansion project – Assets remain de-risked, a
Slide 42: NEP balance sheet and financing flexibility
NEP’s balance sheet and financing flexibility are expected to create a sustainable base for future growth Financial Flexibility Corporate Credit Convertible PAYGO Tax • NEP corporate credit ratings: High-Yield Equity Equity Debt Portfolio Revolving Financing – S&P: BB, stable Credit Facility Convert
Slide 43: Convertible equity portfolio financings leverage private infrastructure capital
Convertible equity portfolio financings (CEPF) leverage private infrastructure capital as an attractive equity issuance tool Leveraging Private Clean Energy Infrastructure Capital NEP Objectives CEPF Attributes Efficient access to capital to Significant infrastructure fund fund accretive acquisiti
Slide 44: NEP does not expect to need further acquisitions until 2021
Following the transaction, NEP does not expect to need any further asset acquisitions until 2021 to achieve its targeted distribution growth expectations Adjusted EBITDA and CAFD Expectations Adjusted CAFD(4) CAFD EBITDA(3) (Including (Excluding Desert PG&E-Related) Sunlight CAFD) 12/31/19 Run Rate(
Slide 45: Tenor of NEP's distribution growth expectations
The tenor of NEP’s distribution growth expectations reflects our confidence in the long-term renewable energy growth and in NEP’s ability to execute NextEra Energy Partners Growth Visibility Guidance Tenor vs. Yieldco & • Overall renewables market growing High Growth MLP Peers(1) ~15% annually throu
Slide 46: NextEra Energy Partners presents a compelling investment opportunity
NextEra Energy Partners presents a compelling investment opportunity NextEra Energy Partners Value Proposition Drill-down of Russell 1000 Companies & NEP Total Return Potential ~4% 16% - 19% 702 Debt / EBITDA(1) < 5x 12% - 15% 128 Dividend yield > 3% 12 DPS growth > 100% past 4 years 3 ‘18 – ‘21E DP
Slide 47: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z 47
Slide 48: NEXT@ra
NEXT@ra ENERGY &%
Slide 49: Contracted Wind and Solar Development Program
Contracted Wind and Solar Development Program(1) Wind Location MW Solar Location MW 2019 – 2020: 2019 – 2020: Burke ND 200 Blythe III CA 125 Emmons-Logan ND 216 New England Various 49 Crowned Ridge I SD 215 Wilmot AZ 100 Sky River CA 62 Blythe IV CA 125 Roundhouse WY 225 Quitman GA 150 Soldier Creek
Slide 50: Energy Storage Development Program
Energy Storage Development Program(1) Project Location MW Duration Project Location MW Duration 2019 – 2020: Post – 2022: Montauk NY 5 8.0 Proxima CA 5 4.0 Wilmot AZ 30 4.0 Contracted, not yet announced 443 Rush Springs OK 10 2.0 Total: 448 Minuteman MA 5 2.0 Total: 50 2021 – 2022: Dodge Flat NV 50
Slide 51: U.S. Federal tax incentives for renewables projects extended
U.S. Federal tax incentives for completed renewables projects have been extended into the next 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 IT
Slide 52: 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) Amounts have been retrospectively adjusted for accounting standard update related to leases 2) Beginning in 2018, reflects the implementation of an accounting standards update related to finan
Slide 53: 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 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 safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, bu
Slide 55: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) effectiveness of NextEra Energy's risk management tools associated with its hedging and trading procedures to protect against significant losses, including the effect of unforeseen price variances from historical behavior;
Slide 56: NextEra Energy Partners
NExTera energy’ PARTNERS Ve
Slide 57: Expected Cash Available for Distribution
Expected Cash Available for Distribution(1) (December 31, 2019 Run Rate CAFD; $ MM) $1,350-$1,525 ($20-$30) ($90-$100) $1,225-$1,400 ($175-$225) ($420-$500) ($40-$45) ($5-$15) $560-$640 ($52-$56) $505-$585 Project-Level Corporate IDR Fees Adjusted Debt Pre-Tax Tax Non-Cash Maintenance Estimated Dese
Slide 58: 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 59: 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 60: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP does not own all of the land on which the projects in its portfolio are located and its use and enjoyment of the property may be adversely affected to the extent that there are any lienholders or land rights holders tha
Slide 61: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP's financial condition and ability to make distributions to its unitholders, as well as its ability to grow distributions in the future, is highly dependent on NEER’s performance of its obligations to return all or a por
NextEra Energy — Edison Electric Institute Conference 2019 on 6ix