Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q4 2022 Earnings Presentation
48 slides from Nextera Energy's earnings presentation, Jan 25, 2023
Slide 1: Earnings Conference Call Fourth Quarter and Full Year 2022
Earnings Conference Call Fourth Quarter and Full Year 2022 January 25, 2023
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 an outstanding year and continued its long track record
NextEra Energy had an outstanding year and continued its long track record of delivering superior results NextEra Energy - 2022 Highlights Total Shareholder Return(2) • Achieved adjusted EPS of $2.90, 50% 47% 150% 139% 125% up nearly 14% from prior year 40% 100% • Delivered compound annual 30% 21% 2
Slide 4: FPL & Energy Resources - 2022 Highlights
NextEra Energy’s underlying businesses successfully executed on their strategic initiatives and performed well both operationally and financially in 2022 FPL & Energy Resources - 2022 Highlights • FPL delivered on its best-in-class customer value proposition by successfully executing on its strategi
Slide 5: NextEra Energy is extending its financial expectations
NextEra Energy is extending its financial expectations based on the strength and diversity of its growth prospects driven by the low cost of new renewables Long-Term Outlook for NextEra Energy • We believe the Inflation Reduction Act (IRA) gives more than two decades of visibility into clean energy
Slide 6: NextEra Energy Partners - 2022 Highlights
NextEra Energy Partners had a terrific year of execution in 2022 and is extending its outlook for 12 to 15% distribution per unit growth by another year, through 2026 NextEra Energy Partners - 2022 Highlights • Grew distributions per unit by ~15% year-over-year – Distributions per unit have grown by
Slide 7: FPL Results
FPL’s full-year contribution to EPS increased 24 cents over the prior year FPL Results Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $0.38 $3,701 $1.87 $763 $3,206 $1.63 $620 $0.31 2021 2022 2021 2022 2021 2022 2021 2022 7
Slide 8: FPL EPS Contribution Drivers
Continued investment in the business was the primary driver of growth at FPL FPL EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) Fourth Full Quarter Year $B FPL – 2021 EPS $0.31 $1.63 $60.0 $55.0 $49.3 Drivers: $50.0 New investments $0.06 $0.19 $40.0 Other, including share dilutio
Slide 9: Florida Economy & Customer Characteristics
Florida’s economy remains healthy and FPL’s retail sales continue to show strong underlying growth Florida Economy & Customer Characteristics Retail kWh Sales Customer Growth(1,2) (Change vs. prior-year quarter) (Change vs. prior-year quarter) 120 UKU Vero Impact Fourth Full Impact 100 Quarter Year
Slide 10: Energy Resources Results
Energy Resources’ full year adjusted earnings increased by nearly 11% over the prior year Energy Resources Results(1) Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $996 $0.50 GAAP: $851 $0.43 $599 $0.30 $285 $0.14 2021 2022 2021 2022 2021 2022 2021 2022 $2,441 $1.23 Adjusted:
Slide 11: Energy Resources Full Year 2022 Adjusted EPS Contribution Drivers
Energy Resources’ growth was driven by new additions to our renewables and storage portfolio, as well as higher margins in our customer-facing businesses Energy Resources Full Year 2022 Adjusted EPS(1) Contribution Drivers $1.50 $0.12 ($0.02) $0.01 ($0.06) $1.23 $1.25 $0.02 $1.12 $0.04 $1.00 $0.75 $
Slide 12: Energy Resources Development Program
Following a record year of origination success and strong continued demand for new renewables and storage, Energy Resources is extending its development expectations Energy Resources Development Program(1) • ~8,030 MW of renewables and storage added to backlog – Includes ~1,700 MW originated since t
Slide 13: NextEra Energy EPS Summary
NextEra Energy’s adjusted earnings per share increased nearly 14% year-over-year NextEra Energy EPS Summary Fourth Quarter EPS Full Year EPS GAAP 2021 2022 Change GAAP 2021 2022 Change FPL $0.31 $0.38 $0.07 FPL $1.63 $1.87 $0.24 Energy Resources $0.43 $0.50 $0.07 Energy Resources $0.30 $0.14 ($0.16)
Slide 14: NextEra Energy's Financial Expectations
NextEra Energy is extending its adjusted EPS growth expectations through 2026 and remains well positioned to deliver long-term growth and value for shareholders NextEra Energy’s Financial Expectations(1) • Extending 6 - 8% annual growth rate through 2026, off $3.63 - the 2024 adjusted EPS $3.45 - $4
Slide 15: NextEra Energy Partners - Full Year Drivers
NextEra Energy Partners’ strong full year results driven primarily by contributions from new projects NextEra Energy Partners - Full Year Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $1,800 $13 ($25) $800 $302 $1,650 $1,600 $95 ($4) ($25) ($16) $634 $1,400 $1,360 $584 $600 $1,200 $1,000 $400 $800 $
Slide 16: NextEra Energy Partners - 2022 Financing Overview
NextEra Energy Partners continued to demonstrate its ability to access attractive sources of capital to finance its growth NextEra Energy Partners - 2022 Financing Overview • During the year, NextEra Energy Partners successfully executed on multiple low-cost financings – Raised low-cost convertible
Slide 17: NextEra Energy Partners' Financial Expectations
NextEra Energy Partners is extending its already best-in- class annual distribution per unit growth of 12% to 15% through 2026 NextEra Energy Partners’ Financial Expectations Annualized LP DPU(1) Year-End Portfolio Run-Rates ($ MM) $5.11 - $5.68 $2,220 - $4.57 - $2,420 $4.94 $4.08 - $1,785 - $4.30 $
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 Credit Metrics
NextEra Energy’s credit metrics remain on track NextEra Energy Credit Metrics A- Downgrade Actual Target S&P Range Threshold 2022(1) 2023 FFO/Debt 13% - 23% 20% 20.8% >20% Debt/EBITDA 3.5x - 4.5x 4.2x <4.5x Baa Downgrade Actual Target Moody’s Range Threshold 2022(1) 2023 CFO Pre-WC/Debt 13% - 22% 17
Slide 22: Potential drivers of variability to consolidated NextEra Energy adjusted EPS
Potential drivers of variability to consolidated NextEra Energy adjusted EPS 2023 Potential Sources of Variability(1) FPL • Timing of investment ± $0.01 - $0.02 NextEra Energy Resources • Wind resource(2) (± 1% deviation) ± $0.01 - $0.015 • Interest rates (± 100 bps shift in yield curve) ± $0.01 - $
Slide 23: Energy Resources' 2022 Adjusted EBITDA by Asset Category
Energy Resources’ 2022 Adjusted EBITDA by Asset Category(1,2) 2022 Expectations as of Q4 2021(3) 2022 Actuals Comment New Investment Contracted Renewables $350 - $600 $ 368 Existing Clean Energy $3,400 - $4,100 $ 3,459 Nuclear $750 - $900 814 Other Generation $40 - $100 70 Natural Gas Pipelines $350
Slide 24: Energy Resources Projected 2023 Portfolio Financial Information
NextEra Energy Resources Projected 2023 Portfolio Financial Information (includes NEER’s share of NEP assets) Value of pre-tax tax Remaining Adjusted credits included in Pre-Tax Cash Contract EBITDA(1) adjusted EBITDA(2) Debt Service (3) Other(4) Flows(5) Life (6) New Clean Energy Assets(7) $475 - $
Slide 25: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1,2) 2021 2022 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 4,240 95% 104% 103% 101% 96% 5,037 114% 5,037 113% 5,037 97% 5,037 100% 117% 105% 107% 108% West 4,051 103% 93% 111% 102% 10
Slide 26: 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(1) 2014 2015 2016 2017 2018 2019 2020 2021 2022 Effective Capacity (MW)(2) 10,374 11,653 12,636 13,986 13,843 15,013 16,300 18,397 19,935 Wind Production (TWh) 32.0 33.8 38.8 44.2 44
Slide 27: Energy Resources Renewables Development Program
Energy Resources Renewables Development Program(1) Wind 2023 - 2024 2025 - 2026 Northeast 111 - Southeast - - Midwest 904 759 Texas 1,702 500 West 1,230 97 Total 3,947 1,356 Solar 2023 - 2024 2025 - 2026 Northeast 140 840 Southeast 1,505 2,078 Midwest 1,845 1,200 Texas 400 735 West 1,419 165 Total 5
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 9/30/22(2) ($3,078) Electricity Related Positions $(97) Amounts Realized During 4th Quarter 304 Change in Forward Prices (all positions) (25) Interest Rate Hedges (68) Subtotal – I
Slide 29: Non-Qualifying Hedges - Summary of Activity
Non-Qualifying Hedges(1) - Summary of Activity ($ millions) 4th Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance Description 9/30/22(2) Realized Prices (Loss) Other (3) 12/31/22 Pretax amounts at share Electricity related positions $ (1,595)
Slide 30: Non-Qualifying Hedges - Summary of Forward Maturity
Non-Qualifying Hedges(1) - Summary of Forward Maturity ($ millions) (2) Gain / (Loss)(1) Asset / (Liability) Balance Total Description 12/31/22 2023 2024 2025 2026 2027 - 2050 2023 - 2050 Pretax amounts at share Electricity related positions $ (1,651) $ 310 $ 324 $ 232 $ 131 $ 654 $ 1,651 Gas Infras
Slide 31: Reconciliation of GAAP Net Income to Adjusted Earnings (Q4 2022)
Reconciliation of GAAP Net Income (Loss) 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 $
Slide 32: Reconciliation of GAAP Net Income to Adjusted Earnings (Q4 2021)
Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended December 31, 2021) Energy Corporate & NextEra (m illions, except per share am ounts) FPL Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc. $ 620 $
Slide 33: Reconciliation of GAAP Net Income to Adjusted Earnings (FY 2022)
Reconciliation of GAAP Net Income (Loss) 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. $ 3,70
Slide 34: Reconciliation of GAAP Net Income to Adjusted Earnings (FY 2021)
Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Attributable to NextEra Energy, Inc. (Twelve Months Ended December 31, 2021) Energy Corporate & NextEra (m illions, except per share am ounts) FPL Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc. $ 3,20
Slide 35: Reconciliation of EPS to Adjusted EPS
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share Earnings (Loss) Per Share 2012 Attributable to NextEra Energy, Inc. (assuming dilution) $ 1.14 Adjustments - pre-tax: Net losses (gains) associated with non-qualifying hedges 0.04 Change in unrea
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 (Loss) to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q4 2022 Q4 2021 2022 2021 Net Income (Loss) $ 18 $ (39) $ 1,121 $ 424 Add back: Depreciation and amortization 116 81 430 288 Interest expense - 97 (853) (47) Income taxes (6) (6) 171 48 Tax c
Slide 41: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1)(2) 2021 2022 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 1,512 95% 100% 100% 98% 96% 1,512 115% 1,512 110% 1,512 95% 1,672 98% 118% 101% 106% 107% West 1,266 105% 88% 104% 9
Slide 42: NextEra Energy Partners Credit Metrics
NextEra Energy Partners’ credit metrics remain on track NextEra Energy Partners Credit Metrics BB Downgrade Actual Target S&P(1) Range Threshold 2022(4) YE 2023 FFO/Debt 12% - 20% 12% 19.6% >15% HoldCo Debt/EBITDA 5.0x - 6.0x 6.0x 4.5x <6.0x Ba1 Downgrade Actual Target Moody's (2) Range Threshold 20
Slide 43: Expected Cash Available for Distribution (2022 Run-Rate)
NextEra Energy Partners’ Expected Cash Available for Distribution(1) (December 31, 2022 Run-Rate CAFD; $ MM) $1,975 - $2,175 ($25 - $35) ($157) $1,785 - $1,985 ($270 - $330) ($755 - $855) ($40 - $45) ($5 - $15) $685 - $775 Project-Level Corporate IDR Fees Adjusted Debt Service(2) Pre-Tax Non-Cash Ma
Slide 44: Expected Cash Available for Distribution (2023 Run-Rate)
NextEra Energy Partners’ Expected Cash Available for Distribution(1) (December 31, 2023 Run-Rate CAFD; $ MM) $2,417 - $2,617 ($35 - $45) ($157) $2,220 - $2,420 ($350 - $400) ($1,020 - $1,120) ($40 - $50) ($10 - $20) $770 - $860 Project-Level Corporate IDR Fees Adjusted Debt Service(2) Pre-Tax Non-Ca
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 and other expectations assume, among other things, normal weather and operating conditio
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