Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q3 2022 Earnings Presentation
43 slides from Nextera Energy's earnings presentation, Oct 28, 2022
Slide 1: Earnings Conference Call Third Quarter 2022
Earnings Conference Call Third Quarter 2022 October 28, 2022
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: Hurricane Ian Remarks
Our deepest sympathies go out to those affected by Hurricane Ian, which was the fifth strongest hurricane to ever make landfall in the U.S. Hurricane Ian Remarks • Ian caused more than 2.1 million FPL customers in 32 counties to lose power – Maximum sustained winds of ~150 mph – Devastating storm su
Slide 4: Inflation Reduction Act (IRA) Remarks
We believe that the Inflation Reduction Act is transformative for our customers, our company and our industry Inflation Reduction Act (IRA) Remarks • Provides the policies and incentives that allow NextEra Energy to achieve its ambitious decarbonization goals – Decades of visibility into renewables
Slide 5: NextEra Energy Third Quarter 2022 Highlights
NextEra Energy delivered strong third quarter results NextEra Energy Third Quarter 2022 Highlights • NextEra Energy grew adjusted EPS by ~13% year-over-year • FPL – EPS increased by 7 cents year-over-year, primarily driven by the ~11% growth in regulatory capital employed – Major capital initiatives
Slide 6: FPL Results – Third Quarter
FPL’s earnings per share grew ~15% from the prior-year comparable quarter FPL Results – Third Quarter Net Income EPS ($ MM) $1,074 $0.54 $927 $0.47 2021 2022 2021 2022 6
Slide 7: 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) Third $B Quarter 60.0 $55.4 FPL – 2021 EPS $0.47 $49.8 50.0 Drivers: 40.0 New investments $0.04 30.0 Other, including share dilution $0.03 20.0 FPL – 20
Slide 8: Florida Economy & Customer Characteristics
Florida’s economy remains healthy and FPL’s retail sales continue to show strong underlying growth Florida Economy & Customer Characteristics Retail kWh Sales Customer Growth(1,2) (Change vs. prior-year quarter) (Change vs. prior-year quarter) 120 UKU Third Vero Impact Impact Quarter 100 82.9 Custom
Slide 9: Energy Resources Results – Third Quarter
Energy Resources’ adjusted EPS increased more than 19% from the prior-year comparable quarter Energy Resources Results(1) – Third Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $655 $0.33 $729 $0.37 $619 $0.31 ($428) ($0.22) 2021 2022 2021 2022 2021 2022 2021 2022 9 1) Attributabl
Slide 10: Energy Resources Third Quarter Adjusted EPS Contribution Drivers
Energy Resources’ growth was primarily driven by higher margins and new investments Energy Resources Third Quarter Adjusted EPS(1) Contribution Drivers $0.45 $0.01 ($0.02) $0.40 $0.01 $0.06 $0.37 $0.35 $0.02 ($0.02) $0.31 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 Q3 2021 New Existing Customer Gas Ne
Slide 11: Energy Resources Development Program
Energy Resources had another strong quarter of origination success Energy Resources Development Program(1) • ~2,345 MW of new renewables and storage origination – Includes ~1,215 MW of wind, ~965 MW of solar, and ~165 MW of battery storage 2022 - 2023 2022 - 2023 2024 - 2025 2024 - 2025 2022 - 2025
Slide 12: NextEra Energy EPS Summary – Third Quarter
NextEra Energy’s adjusted earnings per share grew ~13% versus the prior-year comparable quarter NextEra Energy EPS Summary – Third Quarter GAAP 2021 2022 Change FPL $0.47 $0.54 $0.07 Energy Resources ($0.22) $0.33 $0.55 Corporate and Other ($0.02) ($0.01) $0.01 Total $0.23 $0.86 $0.63 Adjusted 2021
Slide 13: NextEra Energy’s Financial Expectations
We remain well positioned to continue our strong adjusted EPS and dividend per share growth NextEra Energy’s Financial Expectations(1) • Reflects ~10% compound annual growth from 2021 to the $3.45 - high-end of the 2025 adjusted $3.23 - $3.70 EPS expectations range $3.43 $2.98 - $3.13 • From 2021 to
Slide 14: NextEra Energy Partners Third Quarter 2022 Highlights
NextEra Energy Partners performed well and continued to execute on its long-term growth objectives NextEra Energy Partners Third Quarter 2022 Highlights • Delivered strong third quarter financial performance – Adjusted EBITDA and cash available for distribution up ~13% and 17%, respectively, year-ov
Slide 15: NextEra Energy Partners – Third Quarter Drivers
NextEra Energy Partners’ adjusted EBITDA and CAFD growth were driven primarily by contributions from new projects NextEra Energy Partners – Third Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $450 $200 $12 ($6) ($2) $66 ($18) $23 $185 $400 ($6) $1 $377 $158 $350 $334 $150 $300 $250 $100 $200
Slide 16: NextEra Energy Partners’ Financial Expectations
NextEra Energy Partners remains well-positioned to deliver on its long-term growth objectives NextEra Energy Partners’ Financial Expectations Annualized LP DPU(1) Year-End Portfolio Run-Rates ($ MM) $4.45 - $2,220 - $4.95 $2,420 $3.98 - $4.30 $1,785 - $3.55 - $1,985 $3.74 $3.17 - $3.25 $2.83 $770 -
Slide 17: Q&A Session
Qé&A Session NExTera’ NexTera energy’ ENERGY Z PARTNERS 7
Slide 18: Appendix
Appendix NExTera’ NexTera energy’ ENERGY Z PARTNERS 7
Slide 19: NextEra Energy
NEXTe@ra ENERGY &%
Slide 20: NextEra Energy Credit Metrics
NextEra Energy’s credit metrics remain on track NextEra Energy Credit Metrics A- Downgrade Actual Target S&P Range Threshold 2021 2022 FFO/Debt 13% - 23% 20% 21.8% >20% Debt/EBITDA 3.5x - 4.5x 4.0x <4.5x Baa Downgrade Actual Target Moody’s Range Threshold 2021 2022 CFO Pre-WC/Debt 13% - 22% 17% 17.4
Slide 21: Potential drivers of variability to adjusted EPS
Potential drivers of variability to consolidated NextEra Energy adjusted EPS Balance of 2022 Potential Sources of Variability(1) FPL • Timing of investment ± $0.005 - $0.01 NextEra Energy Resources • Wind resource(2) (± 1% deviation) ± $0.005 - $0.01 • Interest rates (± 100 bps shift in yield curve)
Slide 22: Energy Resources Projected 2022 Portfolio Financial Information
NextEra Energy Resources Projected 2022 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) NEER New Investment(7) $350 - $600
Slide 23: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1,2) 2021 2022 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR Location MW Jul Aug Sep QTR MW QTR YE MW QTR MW QTR MW Jul Aug Sep QTR YTD Midwest 4,107 86% 107% 101% 99% 4,240 101% 96% 5,037 114% 5,037 113% 5,037 97% 95% 97% 97% 109% West 3,850 101% 108% 103% 104% 4,05
Slide 24: Energy Resources Renewables Development Program
Energy Resources Renewables Development Program(1,2) Wind 2022-2023 2024-2025 Northeast 111 0 Southeast 0 0 Midwest 1,095 859 Texas 2,652 1,344 West 944 651 Total 4,802 2,854 Solar 2022-2023 2024-2025 Northeast 62 950 Southeast 783 2,431 Midwest 940 1,905 Texas 400 735 West 1,595 470 Total 3,779 6,4
Slide 25: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Primary Drivers: Asset/(Liability) Balance as of 6/30/22(2) ($3,161) Interest Rate Hedges $344 Amounts Realized During 3rd Quarter 38 Gas Infrastructure Change in Forward Prices (all positions) 52 Hedges (206) Subtotal – Income S
Slide 26: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions) 3rd Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance Description 6/30/22 (2) Realized Prices (Loss) Other (3) 9/30/22 Pretax amounts at share Electricity related positions $ (1,247)
Slide 27: 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 9/30/22 4Q 2022 2023 2024 2025 2026 - 2050 2022 - 2050 Pretax amounts at share Electricity related positions $ (1,595) $ 40 $ 263 $ 351 $ 250 $ 691 $ 1,595 Gas Infr
Slide 28: Reconciliation of GAAP Net Income to Adjusted Earnings (Q3 2022)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended September 30, 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. $ 1,074 $ 655
Slide 29: Reconciliation of GAAP Net Income to Adjusted Earnings (Q3 2021)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended September 30, 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. $ 927 $ (428)
Slide 30: Reconciliation of EPS to Adjusted EPS (Twelve Months 2021)
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share (Twelve Months Ended December 31, 2021) Earnings (Loss) Per Share Attributable to NextEra Energy, Inc. (assum ing dilution) $ 1.81 Adjustments - pretax: Net losses associated w ith non-qualifying
Slide 31: 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 32: 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 33: 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 34: NextEra Energy Partners
NeExTera energy’ PARTNERS Z
Slide 35: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q3 2022 Q3 2021 Net income $ 232 $ 94 Add back: Depreciation and amortization 107 71 Interest expense (155) 24 Income taxes 45 6 Tax credits 162 123 Amortization of intangibles – PPAs 37 30 Noncontr
Slide 36: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1)(2) A 1% change in the wind production index equates to $2 - $4 MM of adjusted EBITDA for the balance of 2022 1) Represents a measure of the actual wind speeds available for energy production for the stated period relative to long-term average wind spe
Slide 37: 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 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 38: Expected CAFD (December 31, 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 39: Expected CAFD (December 31, 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 40: 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 41: 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 42: 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 43: 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