Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (September 2022)
55 slides from Nextera Energy's investor presentation, September 2022
Slide 1: August/September 2022 Investor Presentation
August/September 2022 Investor Presentation 1
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. The forward-looking statements included herein are based, in part, upon federal and state tax laws in place prior to the ena
Slide 3: NextEra Energy is an industry-leading clean energy company
NextEra Energy is an industry-leading clean energy company 62 GW $173 B $152 B In Operation(1) Market TotalAssets(3) Capitalization(2) Clean Energy Generation Portfolio Integrated Supply Chain, Engineering and Construction The largest electric The world leader in utility in the United electricity ge
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) $2.55 ~8.4% CAGR 976% $0.76 ~620% Outperformance vs. S&P 500 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 Dividends Per Share 357% $1.54 274% 264% 244% 242%
Slide 5: Growth strategy has elevated our company to the position of industry leader
Our disciplined, customer-focused growth strategy has elevated our company to the position of industry leader Top 15 Global Utility Equity Market Capitalization(1) As of 6/1/2001 ($ MM) As of 8/26/2022 ($ MM) Rank Market Cap Rank Market Cap 1 $38,574 1 $173,019 NextEra Energy 2 $38,185 2 $85,101 3 $
Slide 6: Clear vision and strategy to extend leadership in the U.S. clean energy transition
We have a clear vision and clear strategy to extend our leadership in the U.S. clean energy transition NextEra Energy Decarbonization Strategy Decarbonize Decarbonize Decarbonize Ourselves U.S. Electric U.S. Economy Sector Lead by Example Replicate Our Leverage Our Leading Success Platform Achieve R
Slide 7: We believe we have the industry's leading growth prospects
We believe we have the industry’s leading growth prospects FPL FPL FPL FPL T&D Under- Battery Energy Infrastructure grounding FPL Solar Storage Services Wholesale FPL Green Solar Fleet Generation Hydrogen & Service Together Hydrogen Territory Electrification Modernization Expansion Expect ~$85-$95 B
Slide 8: Clean energy transition accelerated by multiple renewable demand drivers
The clean energy transition occurring across the U.S. is being accelerated by multiple renewable demand drivers that support our decarbonization strategy Demand Drivers for New Renewables Economic Sustainability Regulatory High Oil Cost of and Corporate Federal and High Power and Natural RPS(2) Pric
Slide 9: 2022 Inflation Reduction Act – Key Provisions
The recently passed Inflation Reduction Act significantly expanded tax incentives for clean energy, which we believe will further stimulate renewables development in the U.S. 2022 Inflation Reduction Act (“IRA”) – Key Provisions(1) • Extends 100% PTC through at minimum, the later of: Wind and Solar
Slide 10: IRA introduced ability to transfer tax credits to third parties
Along with expanded and new tax incentives, the IRA introduced new tax provisions, specifically the ability to transfer tax credits to third parties 2022 Inflation Reduction Act (“IRA”) – Key Provisions(1) • 10-year $3/kg PTC, indexed for inflation(2) Clean Hydrogen • Preserves wind and solar PTC on
Slide 11: The IRA also introduces a corporate minimum tax of 15% on pre-tax book income
The IRA also introduces a corporate minimum tax(1) of 15% on pre-tax book income Corporate Minimum Tax (“CMT”) Summary • Introduces a CMT for tax years Considerations after 2022 equal to 15% of pre- tax book income (PTBI) ✓ Can deduct accelerated • PTBI gets adjusted to reflect depreciation (MACRS)
Slide 12: Corporate Minimum Tax Summary (Continued)
Under IRA, companies will need to pay taxes at the greater of regular tax and the corporate minimum tax Corporate Minimum Tax (“CMT”) Summary (Continued) Regular Tax CMT Starting Point? Taxable income Pre-tax book income Deduct Tax Yes, can use MACRS Yes, can use MACRS Depreciation? (or Bonus if eli
Slide 13: IRA will have broad impacts across the market
While transformational for renewables over the long term, the IRA will have broad impacts across the market that will take time to assess and will evolve over time IRA and Evolving Market Considerations Customer CMT REC Prices Transmission Customer Regulatory Impact on Policy Behavior Approvals Fina
Slide 14: Florida Power & Light is recognized as one of the best electric providers
Florida Power & Light is recognized as one of the best and most innovative electric providers in the U.S. Florida Power & Light Company Largest electric utility in the U.S. ~5.8 MM customer accounts ~ 33 GW in operation(1) Areas Served by FPL (in Northwest FL, Counties with Areas Served by FPL) ~ $1
Slide 15: FPL – Areas of Focus
At FPL, we remain focused on identifying smart capital investments to further improve our outstanding customer value proposition FPL – Areas of Focus • Unyielding commitment to Regulatory Capital Employed(1) customer value proposition $69 B - $71 B – Low bills ~9% $49 B CAGR – High reliability – Exc
Slide 16: FPL's blueprint for achieving its Real Zero carbon emissions goal
FPL’s blueprint for achieving its Real Zero carbon emissions goal involves strategic actions to drive customer value, including enhanced reliability and resiliency FPL’s Decarbonization Opportunity(1) Solar & Battery Storage + T&D Investment + Green Hydrogen 92 GW 50 GW 16 GW New solar New battery o
Slide 17: Plan to deliver Real Zero carbon emissions by no later than 2045
Our plan is to deliver Real Zero carbon emissions by no later than 2045 in a manner that supports the reliability and clean energy needs of Florida’s growing population (GW) FPL’s Path to Decarbonization(1) 180 2040 160 140 2035 120 2045 2030 83%(2) 100 2025 80 100%(2) 62%(2) 60 40 52%(2) 20 36%(2)
Slide 18: Energy Resources is the leading North American clean energy company
Energy Resources is the leading North American clean energy company NextEra Energy Resources(1) World leader in electricity generated from the wind and sun Wind Natural Gas Nuclear ~27 GW (2) of clean energy in operation Universal Solar 20 GW wind Storage 4 GW solar Other Pipeline 2 GW nuclear Trans
Slide 19: Energy Resources has leveraged its development skills to expand market share
Energy Resources has leveraged its best-in-class development skills to expand its market share and position itself as the leading clean energy provider Superior Development Platform Renewables Portfolio Growth(1) GW 25 20 Customer ~13% Relationships 15 CAGR Engineering/ 10 Construction Regulatory Ma
Slide 20: Increased renewables market share driven by competitive advantages
We believe Energy Resources’ increased renewables market share is driven by its competitive advantages 2019-2021 Renewables Signed Contracts(1) GW 20 18 Wind Solar Storage 16 14 ~33% ~16% ~36% 12 share of share of share of 20.7 GW 54.3 GW 10.2 GW 10 market market market 8 6 4 2 0 Energy Resources So
Slide 21: Energy Resources Competitive Differentiators
We believe Energy Resources’ competitive advantages position us to be the clean energy solutions provider of choice for a wide variety of customers Energy Resources Competitive Differentiators Advanced analytics i that enable superior site identification and design Scale of project pipeline and inte
Slide 22: Decarbonization could create a ~$4 trillion renewables and storage opportunity
Decarbonization of the entire U.S. economy could create a ~$4 trillion renewables and storage investment opportunity through 2050 2050 Decarbonized U.S. Economy: Growth in Renewables and Storage Opportunity(1) ~$4 T ~33x ~7,000 GW Excess energy converted to hydrogen to ~$2 T decarbonize other ~17x s
Slide 23: Clean Energy Product Portfolio
Energy Resources’ portfolio of clean energy products is strongly aligned with customer needs, which all require new wind, solar and battery storage as the core product Clean Energy Product Portfolio Customer Eliminate carbon from Eliminate carbon Requirements electricity supply from core operations
Slide 24: Energy Resources Development Program
Energy Resources remains focused on capitalizing on the push towards decarbonization to continue expanding our industry-leading renewables and storage portfolio Energy Resources Development Program(1) (Signed Contracts and Expectations as of July 22, 2022) 2022 - 2023 2022 - 2023 2024 - 2025 2024 -
Slide 25: Building the nation's leading competitive transmission business
Energy Resources is building the nation’s leading competitive transmission business NextEra Energy Transmission (NEET) • NEET is a leading competitive Awarded Acquisitions transmission business with a differentiated growth strategy – Operations and development in eight regions, eleven states and one
Slide 26: NextEra Energy's Financial Expectations
We remain well-positioned to continue our strong adjusted EPS and dividends per share growth NextEra Energy’s Financial Expectations(1) • After two previously announced increases, reflects ~10% compound annual $3.45 - growth from 2021 to the high- $3.23 - $3.70 end of the 2025 adjusted EPS $2.98 - $
Slide 27: NextEra Energy Value Proposition
We believe NextEra Energy presents a compelling investment opportunity NextEra Energy Value Proposition Drill-down of S&P 500 Companies Adj. EPS CAGR(2) 381 Investment grade(1) >8% <7% 110 Market capitalization > $60 B 59 Adj. EPS CAGR > 8% past 15 years(2) NEE Median S&P 500 41 ‘21 – ‘25E Annual To
Slide 28: NextEra Energy Partners
NExTera energy’ PARTNERS 2
Slide 29: NextEra Energy Partners' Portfolio
NextEra Energy Partners is a best-in-class clean energy company with a market capitalization of over $15 B(1) NextEra Energy Partners’ Portfolio(2) ~6,640 MW of wind ~1,530 MW of solar ~90 MW paired storage ~4.3 Bcf total natural Wind gas pipeline capacity(3) Solar Storage Pipeline Stable cash flows
Slide 30: NextEra Energy Partners' Portfolio Scale and Diversity
NextEra Energy Partners has consistently grown its portfolio while providing a best-in-class investor value proposition NextEra Energy Partners’ Portfolio Scale and Diversity Renewable GW in Operation Customer Credit(1,2) 8.0 4.7 5.3 5.7 BBB+ 3.7 2.2 2.8 Average 1.0 Credit IPO 2015 2016 2017 2018 20
Slide 31: NextEra Energy Partners' Competitive Advantages
Energy Resources’ operating and development platform provides significant benefits to LP unitholders NextEra Energy Partners’ Competitive Advantages • Benefits from Energy Resources’ best-in-class O&M Scale advantage and development expertise AI / Data Development – Supports organic growth Analytics
Slide 32: Investing in long-term contracted clean energy assets
NextEra Energy Partners continues to focus on investing in long-term contracted clean energy assets with attractive cash flows NextEra Energy Partners Asset Suitability Attractive Characteristics of Assets: Potential New Development at Long-Term Contract Existing Portfolio Energy Resources Stable Ca
Slide 33: Three avenues to deliver on growth objectives
NextEra Energy Partners has three avenues to deliver on its growth objectives NextEra Energy Partners Growth Opportunities NEER Portfolio Available to NEP ~35 GW - Acquisitions ~17 GW 52 GW from Energy Resources ~18 GW ~17 GW Third-Party Organic Acquisitions Growth Energy Current Additional Current
Slide 34: Diversified financing sources over the past five years
NextEra Energy Partners has diversified its financing sources over the past five years by opportunistically accessing low-cost alternatives Financial Flexibility • Long-term contracted cash Sources of Capital flows support a range of low- IPO – 2016 2017 – 2021 cost financing alternatives • Superior
Slide 35: NextEra Energy Partners' Financial Expectations
NextEra Energy Partners remains well-positioned to deliver on its long-term growth objectives NextEra Energy Partners’ Financial Expectations Annualized LP DPU(1) YE 2022 Portfolio Run-Rate(3) ($ MM) $4.45 - $1,785 - $1,985 $4.95 $3.98 - $4.30 $3.55 - $3.74 $3.17 - $3.25 $2.83 $685 - $775 2021 2022E
Slide 36: NextEra Energy Partners' Value Proposition
NextEra Energy Partners presents a compelling investment opportunity with total return potential of 16% to 20% per year through at least 2025 NextEra Energy Partners’ Value Proposition Drill-down of S&P 1000 Companies Illustrative Investor Total & NextEra Energy Partners Return Potential ~1% 16% - 2
Slide 37: Appendix
Appendix NexTera’ Nexvera energy’ ENERGY & PARTNERS 37
Slide 38: NEXTCra’
NEXTCra’ ENERGY &
Slide 39: Proven track record of reducing emissions and investing in clean energy
We have a proven track record of reducing emissions and investing in affordable clean energy generation Reducing Carbon Emissions(1,2) Average CO2 Emissions Rate NextEra Energy Additions(3) (NextEra Energy vs. U.S. Electric Power Sector) (2002-2021 Cumulative Additions) GW 1500 30 29 1300 25 37% 110
Slide 40: No company in any industry has done more to reduce carbon emissions
We believe that no company in any industry has done more to reduce carbon emissions and to confront climate change Clean Energy Business Percentage of Adjusted Earnings by Source(1) 71% of Adjusted Earnings from 13% generation is from zero-carbon sources 34% 81% Non- Fossil 29% of Adjusted 20% Sourc
Slide 41: Real Zero plan interim CO2 rate reduction milestones
Our Real Zero plan includes clear interim CO2 rate reduction milestones to measure our progress over the coming years NextEra Energy Decarbonization Milestones(1) 2005 // 2025 2030 2035 2040E 2045E CO2 Emissions Rate Reduction NextEra Energy expected emissions rate reduction(2) 70% 82% 87% 94% Real
Slide 42: ESG Highlights
NextEra Energy has been recognized by S&P for its ESG leadership and “best-in-class” preparedness ESG Highlights(1) Environment Customers(2) • NextEra Energy announced a zero-carbon • 28% lower bills than the national average blueprint to achieve Real Zero Emissions • 65% better operating costs than
Slide 43: Energy Resources Renewables Development Program
Energy Resources Renewables Development Program(1,2) Wind 2022-2023 2024-2025 Northeast 111 - Southeast - - Midwest 591 459 Texas 3,531 465 West 632 651 Total 4,865 1,575 Solar 2022-2023 2024-2025 Northeast 152 940 Southeast 783 2,083 Midwest 990 1,605 Texas 400 1,185 West 1,835 230 Total 4,160 6,04
Slide 44: 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 2021(1) 2022 FFO/Debt 13%-23% 20% 21.9% >20% Debt/EBITDA 3.5x-4.5x 4.0x <4.5x Baa Downgrade Actual Target Moody’s Range Threshold 2021(1) 2022 CFO Pre-WC/Debt 13%-22% 17% 17.5% >17% CFO-Div/
Slide 45: 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 2021 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 0.58 $ 0.81 $ 0.82 $ 1.
Slide 46: 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 47: 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 48: 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 49: NextEra Energy Partners
NExTera energy’ PARTNERS La
Slide 50: IDR fee structural modification
NextEra Energy Partners and NextEra Energy recently executed on a structural modification to IDR fees, whereby fees will be flattened at ~$157 MM per year beginning Q3 2022 IDR Fee Modification Structure Where We Stand Today From This Point Forward • Based on NextEra Energy • NextEra Energy receives
Slide 51: 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 2021(4) YE 2022 FFO/Debt 12% - 20% 12% 18.1% >15% HoldCo Debt/EBITDA 5.0x - 6.0x 6.0x 5.4x <6.0x Ba1 Downgrade Actual Target Moody's (2) Range Threshold 20
Slide 52: 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 53: 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 54: 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 55: 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
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