Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q1 2023 Earnings Presentation
45 slides from Nextera Energy's earnings presentation, Apr 25, 2023
Slide 1: Earnings Conference Call First Quarter 2023
Earnings Conference Call First Quarter 2023 April 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 is off to a strong start in 2023
NextEra Energy is off to a strong start in 2023 NextEra Energy Highlights • FPL: – Net income increased by approximately $195 million driven primarily by continued investment in the business – Commissioned ~970 MW of new solar, bringing total owned and operated solar to nearly 4,600 MW, which is the
Slide 4: Employee-led productivity initiative has generated approximately $2.6B in run-rate savings
Our annual employee-led productivity initiative has generated approximately ~$2.6 B(1) in annual run-rate savings Projects Momentum, Accelerate and Velocity Summary • Annual bottoms-up, Annual Run-Rate Savings(2) employee-generated idea process for reducing costs • In 2023, team generated ideas expe
Slide 5: FPL's earnings per share increased 9 cents
FPL’s earnings per share increased 9 cents from the prior- year comparable quarter FPL Results Net Income EPS ($ MM) $1,070 $0.53 $875 $0.44 2022 2023 2022 2023 5
Slide 6: Investment in the business was the primary driver of FPL growth
Investment in the business to continue to enhance long- term benefits for customers was the primary driver of growth at FPL FPL EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) First Quarter $B FPL – 2022 EPS $0.44 $70.0 $59.2 Drivers: $60.0 $53.3 New investments $0.06 $50.0 Other,
Slide 7: FPL Development Highlights
FPL continues to identify smart capital investments to further enhance its already best-in-class customer value proposition FPL Development Highlights • FPL continues to progress on one of the largest-ever solar expansions – Recently filed Ten-Year Site Plan projects ~20,000 MW of additional cost- e
Slide 8: Florida Economy & Customer Characteristics
Florida’s economy remains healthy and FPL’s retail sales continue to grow Florida Economy & Customer Characteristics Retail kWh Sales Customer Growth(1,2) (Change vs. prior-year quarter) (Change vs. prior-year quarter) 120 UKU Vero Impact First Impact 100 Quarter 65.2 80 Customer Growth & Mix 1.1% #
Slide 9: Energy Resources' adjusted EPS contribution increased 4 cents
Energy Resources’ adjusted earnings per share contribution increased 4 cents from the prior-year comparable quarter Energy Resources Results(1) – First Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $1,440 $0.72 $732 $0.36 $628 $0.32 ($1,499) ($0.76) 2022 2023 2022 2023 2022 2023
Slide 10: New investments was the largest driver of Energy Resources' growth
New investments was the largest driver of Energy Resources’ growth Energy Resources First Quarter Adjusted EPS(1) Contribution Drivers $0.45 $0.06 ($0.01) ($0.05) $0.40 $0.07 ($0.03) $0.36 $0.35 $0.32 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 Q1 2022 New Existing Customer Gas Other Q1 2023 Adjusted
Slide 11: Energy Resources Development Program
Energy Resources had another strong quarter of origination and continues to see strong demand for clean energy projects Energy Resources Development Program(1) • ~2,020 MW of new renewables and storage added to backlog – Includes ~1,370 MW of solar, ~450 MW of battery storage, and ~200 MW of wind 20
Slide 12: NextEra Energy EPS Summary – First Quarter
NextEra Energy’s adjusted earnings per share increased 13.5% versus the prior-year comparable quarter NextEra Energy EPS Summary – First Quarter GAAP 2022 2023 Change FPL $0.44 $0.53 $0.09 Energy Resources ($0.76) $0.72 $1.48 Corporate and Other $0.09 ($0.21) ($0.30) Total ($0.23) $1.04 $1.27 Adjust
Slide 13: NextEra Energy's Financial Expectations
NextEra Energy remains well positioned to continue our strong adjusted earnings and dividends per share growth NextEra Energy’s Financial Expectations(1) • Expect 6 to 8% annual growth rate through 2026, off the 2024 adjusted EPS expectations $3.63 - range $4.00 $3.45 - $3.70 • From 2021 to 2026 exp
Slide 14: NextEra Energy Partners' Overview
NextEra Energy Partners is well positioned to deliver on its growth expectations NextEra Energy Partners’ Overview • NextEra Energy Partners has never had more visible growth opportunities – Energy Resources expects to have as much as 58 GW(1) of renewables and storage available for sale to NextEra
Slide 15: NextEra Energy Partners – CEPF Benefits
We estimate that the convertible equity portfolio financing (CEPF) structure reduces unit issuances compared to raising capital with block equity, all for the benefit of unitholders NextEra Energy Partners – CEPF Benefits Units Avoided from CEPF(1) (MM) 2018 CEPF Buyout Fewer unit Avoided units issu
Slide 16: NextEra Energy Partners – Transaction Highlights
Announced transaction further diversifies NextEra Energy Partners’ portfolio and enhances its growth profile NextEra Energy Partners – Transaction Highlights • Plan to acquire ~690 MW portfolio of operating wind and solar projects from Energy Resources for ~$708 MM(1) – Weighted-average remaining co
Slide 17: NextEra Energy Partners – First Quarter Drivers
NextEra Energy Partners’ adjusted EBITDA growth was driven primarily by contributions from new projects NextEra Energy Partners – First Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $500 $57 ($20) $200 ($3) $1 $447 $10 ($22) $412 $169 $400 ($3) $3 $156 $150 $300 $100 $200 $50 $100 $0 $0 Q1 2
Slide 18: NextEra Energy Partners' Financial Expectations
NextEra Energy Partners remains well-positioned to deliver on its long-term growth objectives NextEra Energy Partners’ Financial Expectations Annualized LP DPU(1) Year-End Portfolio Run-Rate(3) ($ MM) $5.11 - $5.68 $2,220 - $2,420 $4.57 - $4.94 $4.08 - $4.30 $3.64 - $3.74 $3.25 $770 - $860 2022 2023
Slide 19: NEXT aie
NEXT aie ENERGY & NeExTera energy’ PARTNERS Z
Slide 20: Q&A Session
Qé&A Session NExTera’ NextTera energy’ ENERGY & PARTNERS Z% —
Slide 21: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z% —
Slide 22: NEXTe@ra
NEXTe@ra ENERGY &%
Slide 23: 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 2023 FFO/Debt 13% - 23% 18% 19.2% >18% Baa Downgrade Actual Target Moody’s Range Threshold 2022 2023 CFO Pre-WC/Debt 13% - 22% 17% 18.4% >17% CFO-Div/Debt 9% - 17% 12.1%
Slide 24: 2023 Potential Sources of Variability
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 25: 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 26: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1,2) 2022 2023 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR Location MW Jan Feb Mar QTR MW QTR MW QTR MW QTR YE MW Jan Feb Mar QTR Midwest 5,037 109% 121% 113% 114% 5,037 113% 5,037 97% 5,037 107% 108% 5,304 82% 117% 106% 100% West 4,734 96% 104% 104% 102% 4,734 113
Slide 27: Energy Resources Renewables Development Program
Energy Resources Renewables Development Program(1,2) Wind 2023-2024 2025-2026 Northeast 111 0 Southeast 0 0 Midwest 904 959 Texas 1,698 500 West 1,327 0 Total 4,040 1,459 Solar 2023-2024 2025-2026 Northeast 140 840 Southeast 1,505 2,473 Midwest 1,845 1,450 Texas 400 935 West 1,419 255 Total 5,309 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 12/31/22 ($2,802) Gas Infrastructure Hedges $706 Amounts Realized During 1st Quarter 220 Electricity related positions 30 Change in Forward Prices (all positions) 162 Subtotal – In
Slide 29: Non-Qualifying Hedges - Summary of Activity
Non-Qualifying Hedges(1) - Summary of Activity ($ millions) 1st Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance Description 12/31/22(2) Realized Prices (Loss) 3/31/23 NEE Pretax amounts at share Electricity related positions $ (1,651) $ 129
Slide 30: Non-Qualifying Hedges - Summary of Forward Maturity
Non-Qualifying Hedges(1) - Summary of Forward Maturity ($ millions) (2) (1) Gain / (Loss) Asset / (Liability) Balance Total Description 3/31/23 2023 2024 2025 2026 2027 - 2050 2023 - 2050 Pretax amounts at share Electricity related positions $ (1,508) $ 290 $ 274 $ 203 $ 115 $ 626 $ 1,508 Gas Infras
Slide 31: Reconciliation of GAAP Net Income to Adjusted Earnings (Q1 2023)
Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended March 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. $ 1,070 $
Slide 32: Reconciliation of GAAP Net Income to Adjusted Earnings (Q1 2022)
Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended March 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. $ 875 $ (1
Slide 33: 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 34: 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 35: 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 36: NextEra Energy Partners
NeExTera energy’ PARTNERS Z
Slide 37: NextEra Energy Partners Portfolio Additions
Planned acquisition is a geographically diverse portfolio, with its long-term contracted cash flows supporting NextEra Energy Partners’ distribution per unit growth expectations NextEra Energy Partners Portfolio Additions % Remaining Project Technology MW COD Purchased PPA Years(1) Montezuma II Wind
Slide 38: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income (Loss) to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q1 2023 Q1 2022 Net Income (Loss) $ (151) $ 333 Add back: Depreciation and amortization 132 103 Interest expense 210 (284) Income taxes (34) 50 Tax credits 255 200 Amortization of intangible
Slide 39: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1,2) 2022 2023 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR Location MW Jan Feb Mar QTR MW QTR MW QTR MW QTR YE MW Jan Feb Mar QTR Midwest 1,512 108% 123% 114% 115% 1,512 110% 1,512 95% 1,672 106% 107% 1,811 83% 116% 103% 100% West 1,266 92% 104% 102% 99% 1,2
Slide 40: 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 41: NextEra Energy Partners' Expected Cash Available for Distribution
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 42: 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 43: 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 44: 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 45: 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