Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q1 2021 Earnings Presentation
46 slides from Nextera Energy's earnings presentation, Apr 21, 2021
Slide 1: Earnings Conference Call First Quarter 2021
Earnings Conference Call First Quarter 2021 April 21, 2021
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 delivered strong first quarter results
NextEra Energy delivered strong first quarter results NextEra Energy First Quarter 2021 Highlights • NEE grew adjusted EPS by nearly 14% year-over-year • FPL – Growth driven by smart capital investments that benefit customers – Surpassed 2,640 MW cost-effective solar installed on combined system – F
Slide 4: FPL Results – First Quarter
FPL’s earnings per share increased 4 cents from the prior-year comparable quarter FPL Results – First Quarter Net Income EPS ($ MM) $0.37 $720 $0.33 $642 2020 2021 2020 2021 4
Slide 5: Continued investment in the business was the primary driver of growth at FPL
Continued investment in the business was the primary driver of growth at FPL FPL EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) First $B Quarter 50.0 FPL – 2020 EPS $0.33 45.0 $43.0 $38.8 40.0 Drivers: 35.0 New investments $0.03 30.0 25.0 Other, incl. share dilution $0.01 20.0 FP
Slide 6: Gulf Power's net income increased ~43% year-over-year
Gulf Power’s net income increased ~43% year-over-year driven by continued cost reductions Gulf Power Results – First Quarter Net Income Regulatory Capital Employed(1) ($ MM) $B $57 5.0 $4.5 $3.8 $40 4.0 3.0 2.0 1.0 0.0 2020 2021 Q1 2020(2) Q1 2021 Retail Rate Base Other EPS EPS Growth $0.03 First Qu
Slide 7: FPL continues to identify smart capital investments
FPL continues to identify smart capital investments to further enhance its already best-in-class customer value proposition FPL(1) Development Highlights • Ten Year Site Plan projects that zero-emission sources will be ~40% of all energy produced across the FPL system in 2030 – ~11,700 MW of install
Slide 8: The Florida economy continues to recover from the early effects of COVID-19
The Florida economy continues to recover from the early effects of the COVID-19 pandemic Florida Economy Florida Unemployment & Florida Case-Shiller Labor Participation Rates(1) Annual Change(2) 16% 64% 20% 14% 62% 15% 12% 60% 10% 58% 10% Labor 8% Participation 56% 5% Rate 6% (Right Axis) 54% 0% 4%
Slide 9: FPL and Gulf Power had continued strong underlying usage growth
FPL and Gulf Power had continued strong underlying usage growth Customer Characteristics FPL Retail kWh Sales FPL Customer Growth(1,2) (Change vs. prior-year period) (Change vs. prior-year quarter) 100 First 80 Vero Impact 71.4 Quarter UKU # of 60 Impact Customer Growth & Mix -0.3% Customers (000’s)
Slide 10: FPL submitted its formal base rate filing on March 12th
FPL(1) submitted its formal base rate filing on March 12th FPL(1) Base Rate Proceeding • Proposed 2022 - 2025 base rate four-year plan was designed to support continued investment and best-in-class value proposition: – $1.1 B adjustment effective January 2022 – $0.6 B adjustment effective January 20
Slide 11: Energy Resources' adjusted earnings increased ~13%
Energy Resources’ adjusted earnings increased ~13% from the prior-year comparable quarter Energy Resources Results(1) – First Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $0.25 $598 $0.30 $491 $529 $0.27 $318 $0.16 2020 2021 2020 2021 2020 2021 2020 2021 11 1) Attributable to NE
Slide 12: Energy Resources' growth driven by contributions from new investments
Energy Resources’ growth was primarily driven by contributions from new investments Energy Resources First Quarter Adjusted EPS(1) Contribution Drivers $0.35 $0.04 ($0.04) $0.03 $0.30 $0.30 $0.27 ($0.02) $0.02 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 Q1 2020 New Existing Customer Gas (2) Other Q1 2021 Ad
Slide 13: Energy Resources Development Program
Energy Resources had another strong quarter of origination success Energy Resources Development Program(1) • ~1,750 MW of renewables and storage added to backlog – Includes 916 MW of new wind, 503 MW of new solar, 103 MW of new storage – Also includes Energy Resources’ share of NextEra Energy Partne
Slide 14: NextEra Energy EPS Summary – First Quarter
NextEra Energy’s adjusted earnings per share increased nearly 14% versus the prior-year comparable quarter NextEra Energy EPS Summary – First Quarter GAAP 2020 2021 Change FPL $0.33 $0.37 $0.04 Gulf Power $0.02 $0.03 $0.01 Energy Resources $0.16 $0.25 $0.09 Corporate and Other ($0.30) $0.19 $0.49 To
Slide 15: Adjusted Earnings Per Share Expectations
We remain well positioned to continue our strong adjusted EPS and dividends per share growth NextEra Energy’s Adjusted Earnings Per Share Expectations • Expect adjusted EPS growth in the range of 6% to 8% off $2.77 - $2.55 - $2.97 2021 adjusted EPS $2.40 - $2.75 $2.54 • From 2018 to 2023 expect $2.3
Slide 16: NextEra Energy Partners First Quarter 2021 Highlights
NextEra Energy Partners delivered very strong performance in the first quarter NextEra Energy Partners First Quarter 2021 Highlights • Adjusted EBITDA and CAFD grew ~20% and ~36%, respectively – Driven by strong contributions from 2020 portfolio acquisitions and existing portfolio operations • NEP B
Slide 17: NextEra Energy Partners – First Quarter Drivers
NextEra Energy Partners’ strong first quarter results driven primarily by contributions from new and existing projects NextEra Energy Partners – First Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $400 $200 $184 $39 ($5) $18 ($1) $354 $180 $23 ($5) $350 $27 $294 $160 $13 $300 $135 $140 $250
Slide 18: NextEra Energy Partners – Transaction Highlights
Recently announced transaction further diversifies NextEra Energy Partners’ portfolio and enhances its growth profile NextEra Energy Partners – Transaction Highlights • Acquisition of ~400 MW portfolio of wind assets for ~$733 MM(1) – Almost all of the portfolio capacity is contracted, with investme
Slide 19: NextEra Energy Partners Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners remains well positioned to deliver on its growth objectives NextEra Energy Partners Adjusted EBITDA and CAFD Expectations Adjusted EBITDA CAFD 12/31/21 Run Rate(1) $1,440 – $1,620 MM $600 – $680 MM Unit Distributions 2021(2) $2.76 – $2.83 annualized rate by year-end 2020 – 20
Slide 20: NextEra Energy & NextEra Energy Partners Summary
Our strategic focus remains on investing for the benefit of customers, shareholders, and the environment NextEra Energy & NextEra Energy Partners Summary • At FPL, including Gulf Power, we continue to focus on delivering best-in-class customer value – Achieved through operational cost effectiveness,
Slide 21: Q&A Session
Qé&A Session NExTera’ NexTera energy” ENERGY & PARTNERS Z% — 21
Slide 22: Appendix
Appendix NExTera’ NexTera energy” ENERGY PARTNERS Z% — 22
Slide 23: NextEra Energy
NEXTe@ra ENERGY &%
Slide 24: Credit Metrics
NextEra Energy’s credit metrics remain on track Credit Metrics A- Downgrade Actual Target S&P Range Threshold 2020(1) 2021 FFO/Debt 13%-23% 21% 23.0% >21% Debt/EBITDA 3.5x-4.5x 3.6x <4.5x Baa Downgrade Actual Target Moody’s Range Threshold 2020(1) 2021 CFO Pre-WC/Debt 13%-22% 17% 20.1% >17% CFO-Div/
Slide 25: Balance of 2021 Potential Sources of Variability
Potential drivers of variability to consolidated adjusted EPS Balance of 2021 Potential Sources of Variability(1) Florida Power & Light • Timing of investment ± $0.01 NextEra Energy Resources • Wind resource(2) (± 1% deviation) ± $0.01 • Interest rates (± 100 bps shift in yield curve) ± $0.01 • Asse
Slide 26: Projected 2021 Portfolio Financial Information
NextEra Energy Resources Projected 2021 Portfolio Financial Information (1) (includes NEER's share of NEP assets) Value of pre-tax tax Adjusted credits included in Pre-Tax Cash Remaining (2) (3) (4) (5) (6) (7) EBITDA adjusted EBITDA Debt Service Other Flows Contract Life NEER Existing Assets(8) Con
Slide 27: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1)(2) 2020 2021 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR Location MW Jan Feb Mar QTR MW QTR MW QTR MW QTR YE MW Jan Feb Mar QTR Midwest 3,844 86% 99% 94% 93% 3,844 97% 3,844 99% 4,004 102% 97% 4,406 82% 85% 109% 91% West 3,285 114% 104% 91% 103% 3,285 100% 3,285
Slide 28: Contracted Wind and Solar Development Program
Contracted Wind and Solar Development Program(1) Wind Location MW Solar Location MW Solar Location MW 2021 – 2022: 2021 – 2022: 2023 – 2024: Buffalo Ridge MN 109 Point Beach WI 100 Proxima CA 50 Borderlands NM 100 Route 66 NM 50 Chariot NH 50 Walleye MN 112 Dodge Flat NV 200 Florida FL 373 Niyol CO
Slide 29: Energy Storage Development Program
Energy Storage Development Program(1) Duration Duration Project Location MW Project Location MW (hours) (hours) 2021 – 2022: 2023 – 2024: Dodge Flat NV 50 4.0 Proxima CA 5 4.0 Fish Springs Ranch NV 25 4.0 Sonoran AZ 260 4.0 Arlington CA 179 4.0 CT DEEP CT 3 2.0 Wheatridge OR 30 4.0 Paulsell CA 20 3.
Slide 30: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 12/31/20 ($527) Amounts Realized During 1st Quarter (8) Primary Drivers: Change in Forward Prices (all positions) 375 Interest rate hedges $1,045 Subtotal – Income Statement 367 Gas Infrastructure
Slide 31: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions) 1st Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance Description 12/31/20 Realized Prices (Loss) 3/31/21 Pretax amounts at share Electricity related positions $ 785 $ (21) $ (171) $
Slide 32: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges – Summary of Forward Maturity ($ millions) Gain / (Loss)(1) Asset / (Liability) Balance Total Description 3/31/21 2021 2022 2023 2024 2025 - 2044 2021 - 2044 Pretax amounts at share (1) Electricity related positions $ 593 $ (101) $ (117) $ (64) $ (32) $ (279) $ (593) Gas Infras
Slide 33: Reconciliation of GAAP Net Income to Adjusted Earnings (Q1 2021)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended March 31, 2021) FPL Gulf Energy Corporate & NextEra (m illions, except per share am ounts) Segm ent Pow er Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energy, I
Slide 34: Reconciliation of GAAP Net Income to Adjusted Earnings (Q1 2020)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended March 31, 2020) FPL Gulf Energy Corporate & NextEra (m illions, except per share am ounts) Segm ent Pow er Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energy, I
Slide 35: 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 36: 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 37: 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 38: NextEra Energy Partners
NeExTera energy’ PARTNERS Z
Slide 39: 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 2021 Q1 2020 Net income (loss) $ 571 $ (720) Add back: Depreciation and amortization 67 66 Interest expense (504) 839 Income taxes 70 (75) Tax credits 132 120 Amortization of intangible as
Slide 40: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1)(2) 2020 2021 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 1,213 86% 98% 95% 93% 1,213 98% 1,213 100% 1,213 104% 99% 1,213 80% 91% 106% 92% West 1,104 121% 109% 89% 106% 1,104 98
Slide 41: NextEra Energy Partners' credit metrics remain on track
NextEra Energy Partners’ credit metrics remain on track Credit Metrics BB Downgrade Actual Target (1) (4) S&P Range Threshold 2020 YE 2021 HoldCo Debt/EBITDA 4.0x - 5.0x 5.0x 3.6x 4.0x - 5.0x Ba1 Downgrade Actual Target (2) (4) Moody's Range Threshold 2020 YE 2021 Total Consolidated Debt/EBITDA <7.0
Slide 42: Expected Cash Available for Distribution
Expected Cash Available for Distribution(1) (December 31, 2021 Run Rate CAFD; $ MM) $1,610-$1,790 ($20-$30) ($140-$150) $1,440-$1,620 ($185-$235) ($590-$670) ($40-$45) ($5-$15) $600-$680 Project-Level Corporate IDR Fees Adjusted Debt Pre-Tax Tax Non-Cash Maintenance Estimated (2) Adjusted EBITDA Exp
Slide 43: 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 44: 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 45: 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 46: 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