Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q4 2023 Earnings Presentation
48 slides from Nextera Energy's earnings presentation, Jan 25, 2024
Slide 1: Earnings Conference Call Fourth Quarter and Full Year 2023
Earnings Conference Call Fourth Quarter and Full Year 2023 January 25, 2024
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 had strong operational and financial performance in 2023
NextEra Energy had strong operational and financial performance in 2023 NextEra Energy - 2023 Highlights • NextEra Energy delivered adjusted EPS of $3.17, up 9.3% – Exceeded the high-end of our adjusted EPS expectations range • FPL continued to deliver what we believe is the best customer value prop
Slide 4: NextEra Energy Partners is executing against its transition plans
NextEra Energy Partners is executing against its transition plans and targeted 6% growth plan for unitholders NextEra Energy Partners Summary • Successfully closed the sale of the Texas pipeline portfolio, addressing two of the three near-term convertible equity portfolio financings (CEPF) – Extingu
Slide 5: NextEra Energy
NEXTe@ra ENERGY &%
Slide 6: FPL's full-year contribution to adjusted EPS increased
FPL’s full-year contribution to adjusted EPS increased 22 cents over the prior year FPL Results(1) Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $4,552 $2.24 GAAP: $1,146 $0.56 $3,701 $1.87 $763 $0.38 2022 2023 2022 2023 2022 2023 2022 2023 Adjusted: $4,251 $2.09 $846 $0.41 $3
Slide 7: Investment in the business was the principal driver of growth at FPL
Investment in the business to continue to enhance long- term value for customers was the principal driver of growth at FPL FPL Adjusted EPS Contribution Drivers Adjusted EPS Growth Regulatory Capital Employed(1) Fourth Full $B Quarter Year $70.0 FPL – 2022 $0.38 $1.87 $61.9 $60.0 $55.0 Drivers: $50.
Slide 8: Florida's economy remains healthy and FPL's retail sales continue to grow
Florida’s economy remains healthy and FPL’s retail sales continue to grow Florida Economy & Customer Characteristics Retail kWh Sales Customer Growth(1,2) (Change vs. prior-year) (Change vs. prior-year quarter) 120 UKU Vero Impact Fourth Full Impact 100 Quarter Year 81.0 80 Customer Growth & Mix 1.4
Slide 9: Energy Resources' full year adjusted earnings increased by approximately 12.9%
Energy Resources’ full year adjusted earnings increased by approximately 12.9% over the prior year Energy Resources Results(1) Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $3,558 $1.75 GAAP: $996 $0.50 $885 $0.43 $285 $0.14 2022 2023 2022 2023 2022 2023 2022 2023 $2,757 $1.36
Slide 10: Energy Resources' growth was driven by new additions to renewables and storage
Energy Resources’ growth was driven by new additions to our renewables and storage portfolio Energy Resources Full Year 2023 Adjusted EPS(1) Contribution Drivers $1.75 $0.16 ($0.01) ($0.26) $0.35 ($0.11) $1.50 $1.36 $1.23 $1.25 $1.00 (0.10) New debt to finance growth (0.12) Higher interest rates $0.
Slide 11: Energy Resources had a record year of origination
Energy Resources had a record year of origination and continues to see strong demand for new renewables and storage Energy Resources Development Program(1) • Added ~9,000 MW of new renewables and storage projects – Includes ~2,060 MW originated since the third quarter call 2023 - 2024 2023 - 2024 20
Slide 12: NextEra Energy's adjusted EPS increased approximately 9.3%
NextEra Energy’s adjusted earnings per share increased approximately 9.3% year-over-year NextEra Energy EPS Summary Fourth Quarter EPS Full Year EPS GAAP 2022 2023 Change GAAP 2022 2023 Change FPL $0.38 $0.56 $0.18 FPL $1.87 $2.24 $0.37 Energy Resources $0.50 $0.43 ($0.07) Energy Resources $0.14 $1.
Slide 13: NextEra Energy's Financial Expectations
NextEra Energy remains well positioned to continue our strong adjusted earnings growth NextEra Energy’s Financial Expectations(1) • Expect 6 to 8% annual growth rate through 2026, off the 2024 $3.63 - adjusted EPS expectations $4.00 $3.45 - range $3.23 - $3.70 $3.43 • From 2021 to 2026 expect $3.17
Slide 14: NextEra Energy Partners is focused on executing against its transition plans
NextEra Energy Partners is focused on executing against its transition plans NextEra Energy Partners - 2023 Highlights • Successfully closed the sale of the Texas pipeline portfolio in late December completing an important step in our transition plans – Net proceeds of ~$1.4 B after extinguishing pr
Slide 15: NextEra Energy Partners' full year adjusted EBITDA results
NextEra Energy Partners’ full year adjusted EBITDA results driven primarily by contributions from new projects NextEra Energy Partners - Full Year Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $2,000 $228 ($117) $113 $1 $1,875 $800 $113 ($15) $689 $1,800 $1,650 $42 ($85) $634 $1,600 $600 $1,400 $1,2
Slide 16: NextEra Energy Partners' Financial Expectations
NextEra Energy Partners is focused on realizing unitholder value and executing on its transition plans NextEra Energy Partners’ Financial Expectations(1) Adjusted EBITDA CAFD 12/31/23 Run Rate(2) $1,900 - $2,100 MM $730 - $820 MM 12/31/24 Run Rate(3) $1,900 - $2,100 MM $730 - $820 MM Unit Distributi
Slide 17: NEXT aie
NEXT aie ENERGY & NeExTera energy’ PARTNERS Z
Slide 18: Q&A Session
Qé&A Session NExTera’ NextTera energy’ ENERGY & PARTNERS Z% —
Slide 19: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z% —
Slide 20: NextEra Energy
NEXTe@ra ENERGY &%
Slide 21: NextEra Energy plans to fund the business in a manner similar to the past
NextEra Energy plans to fund the business in a manner similar to the past NextEra Energy Funding Plan 2024-2026(1) ($ B) ~$3 ~($14) ~$3 ~$25 - $35 ~$65 - $75 ~$20 - $30 ~$35 - $45 ~($19) 2024-2026 Cash Debt Corporate Tax Equity Equity Unit NEP Sales / Dividend (2) 2024-2026 From Operations Maturitie
Slide 22: Potential drivers of variability to adjusted EPS
Potential drivers of variability to consolidated NextEra Energy adjusted EPS 2024 Potential Sources of Variability(1) FPL • Timing of investment ± $0.01 - $0.02 NextEra Energy Resources • Wind resource(2) (± 1% deviation) ± $0.015 - $0.02 • Interest rates (± 50 bps shift in yield curve) ± $0.00 • As
Slide 23: NextEra Energy's credit metrics remain on track
NextEra Energy’s credit metrics remain on track NextEra Energy Credit Metrics A- Downgrade Actual Target S&P Range Threshold 2023(1) 2024 FFO/Debt 13% - 23% 18% 18.7% >18% Baa Downgrade Actual Target Moody’s Range Threshold 2023(1) 2024 CFO Pre-WC/Debt 13% - 22% 17% 18.7% >17% CFO-Div/Debt 9% - 17%
Slide 24: Energy Resources' 2023 Adjusted EBITDA by Asset Category
Energy Resources’ 2023 Adjusted EBITDA by Asset Category(1,2) 2023 Expectations as of Q4 2022(3) 2023 Actuals Comment New Investment Contracted Renewables $475 - $725 $ 676 Existing Assets Contracted Renewables & Storage $4,100 - $4,800 $ 3,823 Primarily lowest wind resource in 30 years Nuclear $675
Slide 25: NextEra Energy Resources Projected 2024 Portfolio Financial Information
NextEra Energy Resources Projected 2024 Portfolio Financial Information (includes NEER’s share of NEP assets) 1) See Appendix for definition of Adjusted EBITDA by Asset Category 2) Includes pre-tax gross-up of investment tax credits, convertible investment tax credits, production tax credits earned
Slide 26: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1,2) 2022 2023 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR Location MW Oct Nov Dec QTR YE MW QTR MW QTR MW QTR MW Oct Nov Dec QTR YE Midwest 5,037 100% 117% 105% 107% 108% 5,304 100% 5,504 92% 5,504 83% 5,504 98% 100% 93% 97% 94% West 5,210 80% 102% 102% 95% 101% 5
Slide 27: Energy Resources Renewables Development Program
Energy Resources Renewables Development Program(1) Wind 2023-2024 2025-2026 Northeast 111 0 Southeast 0 0 Midwest 1,230 1,345 Texas 1,556 856 West 1,361 42 Total 4,259 2,243 Solar 2023-2024 2025-2026 Northeast 339 15 Southeast 1,534 3,283 Midwest 1,897 1,435 Texas 454 1,660 West 1,608 808 Total 5,83
Slide 28: Non-Qualifying Hedges - Summary of Activity
Non-Qualifying Hedges(1) - Summary of Activity ($ millions, after-tax) Primary Drivers: Asset/(Liability) Balance as of 9/30/23(2) ($1,066) Gas Infrastructure Amounts Realized During 4th Quarter 99 Hedges $570 Change in Forward Prices (all positions) (346) Electricity related positions 123 Subtotal
Slide 29: Non-Qualifying Hedges - Summary of Activity
Non-Qualifying Hedges(1) - Summary of Activity ($ millions) 4th Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance Description 9/30/23 (2) Realized Prices (Loss) Other 12/31/23 Pretax amounts at share Electricity related positions $ (1,009) $ 1
Slide 30: Non-Qualifying Hedges - Summary of Forward Maturity
Non-Qualifying Hedges(1) - Summary of Forward Maturity ($ millions) (2) Gain / (Loss) Asset / (Liability) Balance Total Description 12/31/23 2024 2025 2026 2027 2028 - 2050 2024 - 2050 Pretax amounts at share Electricity related positions $ (784) $ 244 $ 183 $ 85 $ 50 $ 222 $ 784 Gas Infrastructure
Slide 31: Reconciliation of GAAP Net Income to Adjusted Earnings (Q4 2023)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended December 31, 2023) Energy Corporate & NextEra (m illions, except per share am ounts) FPL Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc. $ 1,146 $ 885
Slide 32: Reconciliation of GAAP Net Income to Adjusted Earnings (Q4 2022)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended December 31, 2022) Energy Corporate & NextEra (m illions, except per share am ounts) FPL Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc. $ 763 $ 996 $
Slide 33: Reconciliation of GAAP Net Income to Adjusted Earnings (FY 2023)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Twelve Months Ended December 31, 2023) Energy Corporate & NextEra (millions, except per share amounts) FPL Resources Other Energy, Inc. Net Income (Loss) Attributable to NextEra Energy, Inc. $ 4,552 $ 3,558
Slide 34: Reconciliation of GAAP Net Income to Adjusted Earnings (FY 2022)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Twelve Months Ended December 31, 2022) Energy Corporate & NextEra (m illions, except per share am ounts) FPL Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc. $ 3,701 $ 285
Slide 35: 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 2013 2021 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 1.12 $ 1.81 Adjustments: Net losses associated with non-qualifying hedges 0.07 1.04 Change in unrealized lo
Slide 36: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings Expectations (including subsidiaries as applicable) This presentation refers to adjusted earnings per share expectations. Adjusted earnings expectations exclude the cumulative effect of adopting new accounting standards, the effects of
Slide 37: 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 38: 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 39: NextEra Energy Partners
NeExTera energy’ PARTNERS Z
Slide 40: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q4 2023 Q4 2022 2023 2022 Net Income $ 148 $ 18 $ 218 $ 1,121 Add back: Depreciation and amortization 137 106 521 394 Interest expense 200 (3) 394 (848) Income taxes (33) (9) (25) 161 Tax credits 25
Slide 41: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1,2) 2022 2023 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 1,672 98% 118% 102% 106% 107% 1,811 100% 1,970 92% 1,970 80% 1,970 93% 97% 84% 91% 91% West 1,557 84% 98% 90% 90% 99%
Slide 42: NextEra Energy Partners' credit metrics remain on track
NextEra Energy Partners’ credit metrics remain on track NextEra Energy Partners Credit Metrics BB Downgrade Actual Target S&P(1) Range Threshold 2023(4) 2024 FFO/Debt 12% - 20% 12% 14.7% >15% HoldCo Debt/EBITDA 5.0x - 6.0x 6.0x 5.8x <6.0x Ba1 Downgrade Actual Target (2) (4) Moody's Range Threshold 2
Slide 43: NextEra Energy Partners' Expected CAFD (2023 Run-Rate)
NextEra Energy Partners’ Expected Cash Available for Distribution(1) (December 31, 2023 Run-Rate CAFD; $ MM) $1,930 - $1,900 - $2,130 ($25 - $35) ($0 - $0) $2,100 ($210 - $270) ($835 - $1,035) ($35 - $45) ($5 - $15) $730 - $820 Project-Level Corporate IDR Fees Adjusted Debt Service (2) Tax Non-Cash
Slide 44: NextEra Energy Partners' Expected CAFD (2024 Run-Rate)
NextEra Energy Partners’ Expected Cash Available for Distribution(1) (December 31, 2024 Run-Rate CAFD; $ MM) $1,930 - $1,900 - $2,130 ($25 - $35) ($0 - $0) $2,100 ($260 - $320) ($780 - $980) ($35 - $45) ($5 - $15) $730 - $820 Project-Level Corporate IDR Fees Adjusted Debt Service (2) Tax Non-Cash Ma
Slide 45: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA and CAFD Expectations This presentation refers to adjusted EBITDA and CAFD expectations. Adjusted EBITDA, CAFD, limited partner distributions, equity issuances and other expectations assume, among other things, normal weather and
Slide 46: 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 47: 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 48: 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