Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (March 2022)
59 slides from Nextera Energy's investor presentation, March 2022
Slide 1: March 2022 Investor Presentation
March 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. Actual results could differ materially from such forward-looking statements. The factors that could cause actual results to
Slide 3: NextEra Energy is comprised of strong businesses supported by a common platform
NextEra Energy is comprised of strong businesses supported by a common platform • ~$151 B market capitalization(1) • ~62 GW in operation(2) • ~$141 B in total assets(3) The largest vertically The world leader in integrated electric utility in electricity generated from the United States by retail th
Slide 4: NextEra Energy's strategic focus remains on investing for the benefit of customers, shareholders, and the environment
NextEra Energy’s strategic focus remains on investing for the benefit of customers, shareholders, and the environment NextEra Energy Strategic Focus • FPL’s continued smart investments further enhance its best-in- class value proposition – Typical residential bill projected to be the lowest among Fl
Slide 5: 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) $2.55 150% 300% 129% 252% 125% 250% 100% 100% 200% 75% 150% 133% $0.76 49% 50% 100% 74% 25% 50% '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 0% 0% Three Yea
Slide 6: Our growth strategy has led to real change in relative position
Over a sustained period of time, our growth strategy has led to real change in relative position Top 20 Global Utility Equity Market Capitalization(1) As of 6/1/2001 ($ MM) As of 2/25/2022 ($ MM) Rank Market Cap Rank Market Cap 1 $38,574 1 $151,445 NextEra Energy 2 $38,185 2 $81,943 3 $34,476 3 $77,
Slide 7: Our core strategy has focused on ESG impacts for more than 25 years
Our core strategy has focused on the importance of ESG impacts for more than 25 years • Vision to be largest, most profitable clean energy provider in the world • Vision informed by our values: • We are committed to excellence • We do the right thing • We treat people with respect • Aim to be the mo
Slide 8: We have one of the lowest emissions profiles of any utility in North America
We have one of the lowest emissions profiles of any utility in North America Reducing Carbon Emissions(1,2) Average CO2 Emissions Rate: NextEra Energy vs. U.S. Electric Power Sector 75% increase in 1500 clean electricity generation(3) 1300 37% 1100 better CO2 900 ~57 MM tons of Lbs/ avoided CO2 MWh
Slide 9: We are well positioned to continue our track record of growth
We are well positioned to continue our track record of growth Wholesale FPL Fleet FPL & Service Solar Under- Electrification Energy Territory Together grounding Services Expansion FPL FPL FPL Solar FPL T&D Generation Hydrogen Battery Infrastructure Modernization Storage Expect >$60 B of capital Capi
Slide 10: Industry's clean energy transformation will further expand and accelerate
We expect the industry’s clean energy transformation will further expand and accelerate over the coming years Disruptive Industry Changes Today Potential Cost per MWh Mid-2020s(1) AI / ($/MWh) Machine Learning Near-Firm Wind $20 - $30 EV & Renewables / Hydrogen Near-Firm Solar $30 - $40 Storage Mobi
Slide 11: Florida Power & Light is recognized as one of the best utility franchises in the U.S.
Florida Power & Light is recognized as one of the best utility franchises in the U.S. Florida Power & Light Company • One of the largest electric utilities in the U.S. • Vertically integrated, retail rate-regulated • More than 5.7 MM customer accounts • ~33 GW in operation(1) • ~$14 B in operating r
Slide 12: Our core focus at Florida Power & Light has been consistent for many years
Our core focus at Florida Power & Light has been consistent for many years Areas of Focus • Unyielding commitment to customer value proposition Superior Customer Customer – Low bills Value Delivery Satisfaction – High reliability – Excellent customer service • Focus on efficiency and best-in- class
Slide 13: FPL long-term strategy delivering best-in-class customer value proposition
At FPL, we are continuing to focus on the long-term strategy that has delivered our best-in-class customer value proposition FPL Customer Value Focus Operational Service Cost Effectiveness(1) Reliability(2) ($/Retail MWh) (Minutes) ~58 $13.54 ~10% ~21% $12.19 ~46 Good Reduction Good Improvement in r
Slide 14: Gulf Power performance: low cost, reliable and clean
Our performance at Gulf Power validates that it is possible to be low cost, reliable and clean at the same time Gulf Power Three-Year Execution Summary Operational Service Cost Effectiveness(1) Reliability(2) ($/Retail MWh) (Minutes) ~$32 ~101 Good Good ~40% ~$20 ~60% Reduction Improvement ~43 2018
Slide 15: Energy Resources is the leading North American clean energy company
Energy Resources is the leading North American clean energy company Energy Resources • World leader in electricity generated from the wind and sun • ~28 GW(1) of generation in Wind operation Natural Gas – ~20 GW wind Nuclear Universal Solar – ~4 GW solar Storage – ~2 GW nuclear Other Pipeline – ~2 G
Slide 16: Energy Resources is well positioned to benefit from US electrification
Energy Resources is well positioned to benefit as the US pursues electrification to deliver economic carbon reductions Competitive Advantages • Scale advantage enabling us to buy, 2020 Top 10 US Capital Investors(1) build and operate cheaper $25 $24 – 5th largest capital spender in U.S.(1) $20 $19 $
Slide 17: Energy Resources development program and competitive advantages
Energy Resources’ competitive advantages position us to continue to capitalize on what we believe is the best renewables development environment in our history Energy Resources Development Program(1) (Signed Contracts as of January 25, 2022) 2021 – 2022 2021 – 2022 2023 – 2024 2023 – 2024 2021 – 202
Slide 18: Decarbonization could create ~$4 trillion investment opportunity through 2050
Decarbonization of the entire U.S. economy could create ~$4 trillion investment opportunity through 2050 2050 Decarbonized U.S. Economy: Growth in Renewables and Storage Opportunity(1) 2020 Capacity 170 GW ~20x ~40x Excess energy 2050 Power 3,550 GW converted to Sector $1,700 B hydrogen to Decarboni
Slide 19: Increased C&I ESG commitments present a substantial opportunity
Increased Commercial & Industrial (C&I) commitments to ESG presents a substantial opportunity for NextEra Energy C&I ESG Commitments and Renewables Demand U.S. C&I Renewable Demand(3) 92% 2,529 GW 100 ~150 GW Total of S&P500 companies and ~85 companies counting have have released set emissions 75 ES
Slide 20: Energy Resources is pursuing green hydrogen pilot projects
Energy Resources is actively pursuing green hydrogen pilot projects to serve a variety of markets New Opportunities in Hydrogen Company Application Behind the Green Industrial Industrial Meter Solar H2 Process On-Site Green Hydrogen Fuel Grid Electrical Solar H2 Storage Cell PPA Green Delivery Forkl
Slide 21: Many end-uses make hydrogen a leading pathway to a zero-carbon future
The many end-uses for hydrogen make it a leading pathway to a zero-carbon future across many parts of the U.S. economy Power Sector Transport Industry Buildings Backup Remote Combined Power Generation Trucks Forklifts Ammonia Methanol Heat and Power Hydrogen Recip. Trains on Non- Steel Hydrogen Buse
Slide 22: Raised expectations for 2022 and 2023 and extended growth expectations to 2025
We recently raised expectations for 2022 and 2023 and extended expectations for roughly 6% to 8% growth to 2025 NextEra Energy’s Adjusted Earnings Per Share Expectations • Expect adjusted EPS growth $3.35 - in the range of 6% to 8% off $3.60 $3.13 - $3.33 increased 2022 adjusted EPS $2.93 - $3.08 •
Slide 23: NextEra Energy presents a compelling investment opportunity
NextEra Energy presents a compelling investment opportunity NextEra Energy Value Proposition Drill-down of S&P 500 Companies Adj. EPS CAGR(2) 378 Investment grade(1) ~9% ~6% 261 Market capitalization > $25 B Adj. EPS CAGR > 8% past 15 NEE Median S&P 111 years(2) 500 DPS Growth(4) 84 ‘20 – ‘23E Annua
Slide 24: NextEra Energy Partners
NExTera energy’ PARTNERS 2
Slide 25: NextEra Energy Partners is a best-in-class clean energy company
NextEra Energy Partners is a best-in-class clean energy company NextEra Energy Partners’ Portfolio(1) • Stable cash flows supported by: – Long-term contracts with creditworthy counterparties – Geographic and asset diversity • ~8,000 MW of renewables – ~6,640 MW wind – ~1,310 MW solar – ~50 MW storag
Slide 26: NextEra Energy Partners' value proposition
NextEra Energy Partners’ value proposition is driven by its high-quality portfolio, financial strength and flexibility, tax-advantaged structure, and visible growth opportunities Investment Highlights • High quality portfolio with ~14 year remaining contract Clean Energy life(1) Acquisitions – Diver
Slide 27: NextEra Energy Partners growth strategy in long-term contracted clean energy assets
NextEra Energy Partners continues to focus on investing in long-term contracted clean energy assets with strong creditworthy counterparties and attractive cash flows Growth Strategy Wind Long-Term Organic Wind Solar Contract Growth Clean Strong Energy Operations Technology Attractive Asset to Batter
Slide 28: Acquisitions from Energy Resources provide visibility to continued growth
Acquisitions from Energy Resources provide clear visibility to continued growth at NextEra Energy Partners Energy Resources’ Renewable Portfolio GW Since NextEra Energy Partners’ IPO(1) 50 ~31 GW - ~13 GW 44 GW 40 ~15 GW 30 ~13 GW ~7 GW 20 ~10 GW 10 0 Energy Net MW Placed MW Sold to NEP Current Addi
Slide 29: NEP positioned to benefit from significant wind and solar growth
NextEra Energy Partners is well positioned to benefit from the significant wind and solar growth that is expected over the coming years NextEra Energy Partners & Long-Term Renewables Demand U.S. Renewable Energy Capacity through 2030 U.S. Renewables Penetration ~540 GW ~40% ~15% CAGR ~330 GW in MWh
Slide 30: NextEra Energy Partners' balance sheet and financing flexibility
NextEra Energy Partners’ balance sheet and financing flexibility are expected to create a sustainable base for future growth Financial Flexibility • NextEra Energy Partners corporate credit ratings: Convertible PAYGO Tax High-Yield – S&P: BB, stable Equity Equity Debt Portfolio – Moody’s: Ba1, stabl
Slide 31: Convertible equity financings allow efficient issuance of common equity over time
NextEra Energy Partners’ convertible equity financings allow it to efficiently issue common equity over time Illustrative Equity Issuance for Convertible Financings(1) Percent of 10% 8-10% 5-6% 3-4% 2-3% 2-3% 2-3% 2-3% 1-2% 2-3% 0-1% Public Float(2) $900 ~$850 ~$675 ~$600 $600 ~$500 ~$500 ~$525 ~$47
Slide 32: NEP well-positioned to deliver on long-term growth objectives
NextEra Energy Partners remains well-positioned to deliver on its long-term growth objectives NextEra Energy Partners Adjusted EBITDA and CAFD Expectations Adjusted EBITDA CAFD 12/31/21 Run-Rate(1) $1,635 – $1,795 MM $640 – $720 MM 12/31/22 Run-Rate(2) $1,775 – $1,975 MM $675 – $765 MM Unit Distribu
Slide 33: NextEra Energy Partners presents a compelling investment opportunity
NextEra Energy Partners presents a compelling investment opportunity NextEra Energy Partners Value Proposition Drill-down of S&P 1000 Companies & NextEra Energy Partners Total Return Potential 602 Debt / EBITDA(1) < 5x ~3% 15% - 18% 12% - 15% 77 Dividend yield > 2.5% 8 DPS growth > 60% past 5 years
Slide 34: Appendix
Appendix NexTera’ Nexvera energy’ ENERGY & PARTNERS 34
Slide 35: NextEra Energy
NEXTCra ENERGY &
Slide 36: No company has done more to reduce carbon emissions and confront climate change
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 37: Approved 2021 base rate settlement agreement
The approved 2021 base rate settlement agreement keeps bills low and accelerates the U.S.’s largest solar buildout FPL(1) Approved Base Rate Settlement • Unanimous Florida Public Service Commission approval • Key elements of four-year agreement effective January 2022: – Retail base revenue increases
Slide 38: FPL leading with a reliable, modern and clean generation fleet
FPL is leading the industry with a highly reliable, modern and clean generation fleet FPL(1) Clean Energy Generation • Executing one of the world’s largest solar expansions – More than 3,160 MW of solar on combined system(2) – Leads all utilities in the nation with the most solar capacity(3) – Solar
Slide 39: Attracting and retaining a diverse, highly skilled team
We are focused on attracting and retaining a diverse, highly skilled team that can drive innovative solutions for the benefit of customers and shareholders Diverse and Inclusive Teams • Diversity and Inclusion (D&I) D&I Metrics – Executive D&I council Women Minorities – Corporate D&I council – Annua
Slide 40: Our commitment to safety
Our commitment to safety is a hallmark of our operating culture and a reflection of our focus on execution Commitment to Safety 2.5 2.2 ~85% improvement in safety 2.0 performance since 2003 1.5 OSHA_ Recordable Rate(1) 1.0 0.5 0.3 0.0 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 1) OSHA Recorda
Slide 41: Supporting local communities where we live and work
We recognize the importance of building relationships and supporting local communities where we live and work Supporting Our Communities >$1.7 B in Over ~$110 B state and >$19 MM local taxes charitable capital invested and fees giving in since 2012(1) paid in 2020 2020 ~$75 MM in FL Office of Tribal
Slide 42: Recognized by S&P for ESG leadership
NextEra Energy has been recognized by S&P for its ESG leadership and “best in class” preparedness ESG Highlights(1) Environment Customers(2) • 47% better CO2 emissions rate than • 30% lower bills than the national average industry average in 2020 • 64% better operating costs than industry • World’s
Slide 43: Sustainability governance from board to employees
Our approach to sustainability engages all levels of the company from the board of directors to our employees Sustainability Governance Board of Directors and Board Committees • Oversight of the execution of our strategy including issues which could impact the long-term sustainability of our company
Slide 44: Sound corporate governance and oversight
Our track record of delivering strong financial and operational performance begins with sound corporate governance and oversight Governance Highlights Board Composition(1) Governance Best Practices • 11 of 12 directors are independent • Special meeting threshold of 20% • Independent lead director •
Slide 45: 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% 21.4% >20% Debt/EBITDA 3.5x-4.5x 4.1x <4.5x Baa Downgrade Actual Target Moody’s Range Threshold 2021(1) 2022 CFO Pre-WC/Debt 13%-22% 17% 17.6% >17% CFO-Div/
Slide 46: U.S. federal tax incentives extended into the middle of this decade
U.S. Federal tax incentives for completed renewables projects have been extended into the middle of this decade Extended U.S. Federal Tax Credits Wind Production Solar Investment Tax Credit (PTC) Tax Credit (ITC) Start of Start of Construction COD Wind Construction COD Solar Date Deadline PTC Date D
Slide 47: 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 48: 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 49: 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 50: 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 51: NextEra Energy Partners
NExTera energy’ PARTNERS La
Slide 52: NextEra Energy Partners' credit metrics remain on track
NextEra Energy Partners’ credit metrics remain on track Credit Metrics BB Downgrade Actual Target (1) S&P Range Threshold 2021(4) YE 2022 FFO/Debt 12% - 20% 14% 18.1% >15% Ba1 Downgrade Actual Target Moody's (2) Range Threshold 2021(4) YE 2022 Total Consolidated Debt/EBITDA <7.0x >7.0x 6.0x 5.0x - 6
Slide 53: Debt Amortization Schedule
Debt Amortization Schedule(1,2) Quarterly 2022 Fiscal Year Interest Maturity Total Rate Date Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 2023 2024 2025 2026 Thereafter NEE Operating Partners LP 4.25% 2024 - - - - - - 700 - - - 700 NEE Operating Partners LP 4.50% 2027 - - - - - - - - - 550 550 NEE Operating
Slide 54: Expected Cash Available for Distribution (2021 run-rate)
NextEra Energy Partners’ Expected Cash Available for Distribution(1) (December 31, 2021 Run-Rate CAFD; $ MM) $1,795-$1,975 ($20-$30) ($140-$150) $1,635-$1,795 ($90-$95) ($135-$175) ($690-$770) ($40-$45) ($10-$20) $640-$720 Project-Level Corporate IDR Fees Adjusted HoldCo Debt Project Debt Pre-Tax Ta
Slide 55: 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) ($165-$175) $1,775-$1,975 ($270-$330) ($755-$855) ($40-$45) ($5-$15) $675-$765 (2) Project-Level Corporate IDR Fees Adjusted EBITDA Debt Service Pre-Tax Tax Non-Cash M
Slide 56: 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 57: 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 58: 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 59: 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