Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q3 2020 Earnings Presentation
45 slides from Nextera Energy's earnings presentation, Oct 21, 2020
Slide 1: Earnings Conference Call Third Quarter 2020
Earnings Conference Call Third Quarter 2020 October 21, 2020
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 third quarter results while managing COVID-19 impacts
NextEra Energy delivered strong third quarter results while managing the ongoing impacts of the COVID-19 pandemic NextEra Energy Highlights • NEE grew adjusted EPS by ~11% year-over-year • Continued strong execution at FPL – All of our major capital projects, including one of the largest solar expan
Slide 4: FPL's earnings per share increased 14 cents from the prior-year quarter
FPL’s earnings per share increased 14 cents from the prior- year comparable quarter Florida Power & Light Results – Third Quarter Net Income EPS ($ MM) $757 $1.54 $683 $1.40 2019 2020 2019 2020 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 Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) (Excluding Accumulated Deferred Income Taxes) Third Quarter $B $45.0 FPL – 2019 EPS $1.40 $40.8 $40.0 $36.7 Drivers: $35.0 New investm
Slide 6: Gulf Power's contribution increased 2 cents from the prior-year period
Gulf Power’s contribution increased 2 cents from the prior- year comparable period Gulf Power Results – Third Quarter Results Regulatory Capital Employed(1) (Excluding Accumulated Deferred Income Taxes) $B $4.5 $4.2 $3.3 Q3 2019 Q3 2020 $3.0 GAAP $1.5 Net Income $76 MM $91 MM $0.0 (2) EPS $0.16 $0.1
Slide 7: The Florida economy continues to recover from the ongoing COVID-19 pandemic
The Florida economy continues to recover from the ongoing COVID-19 pandemic Florida Economy Florida Unemployment & Labor Participation Rates(1) Florida Consumer Sentiment(2) 16% 64% 110 14% 62% 100 12% 60% 90 10% 58% Labor 8% Participation 56% 80 Rate 6% (Right Axis) 54% 70 4% 52% 60 2% 50% 0% 48% 5
Slide 8: FPL and Gulf Power had continued customer growth
FPL and Gulf Power had continued customer growth Customer Characteristics FPL Retail kWh Sales FPL Growth(1,2) (Change vs. prior-year period) (Change vs. prior-year quarter) Third 100 Quarter 79.2 80 Vero Impact Customer Growth & Mix 0.7% UKU Impact # of 60 + Usage Change Due to Weather 0.8% Custome
Slide 9: Energy Resources' adjusted EPS increased ~23% from the prior-year quarter
Energy Resources’ adjusted EPS increased ~23% from the prior-year comparable quarter Energy Resources Results(1) – Third Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $551 $1.12 $381 $376 $0.78 $0.76 $443 $0.91 2019 2020 2019 2020 2019 2020 2019 2020 1) Attributable to NEE; prior
Slide 10: New investments and NextEra Energy Transmission contributed to Energy Resources' growth
New investments and NextEra Energy Transmission contributed to Energy Resources’ strong growth Energy Resources Third Quarter Adjusted EPS(1) Contribution Drivers $1.20 $0.13 $1.12 $1.00 $0.06 $0.00 $0.01 $0.01 $0.91 $0.80 $0.60 $0.40 $0.20 $0.00 (2) Q3 2019 New Existing NextEra Energy Customer Supp
Slide 11: Energy Resources had a record quarter of origination success
Energy Resources had a record quarter of origination success Energy Resources Development Program(1) • Record ~2,200 MW originated – 580 MW of new wind; 911 MW of solar; 594 MW of battery storage; 86 MW of repowering, including first post-2020 project • Net backlog additions of 1,446 MW • Executed b
Slide 12: NextEra Energy's adjusted earnings per share increased ~11%
NextEra Energy’s adjusted earnings per share increased ~11% versus the prior-year comparable quarter NextEra Energy EPS Summary(1) – Third Quarter GAAP 2019 2020 Change FPL $1.40 $1.54 $0.14 Gulf Power $0.16 $0.18 $0.02 Energy Resources $0.78 $0.76 ($0.02) Corporate and Other ($0.53) $0.02 $0.55 Tot
Slide 13: We recently increased the range of our financial expectations
We recently increased the range of our financial expectations and extended our long-term growth outlook NextEra Energy’s Adjusted Earnings Per Share Expectations • Adjusted EPS ranges updated to reflect 4-for-1 stock split(3) $2.77 - $2.55 - $2.75 $2.97 • Increased adjusted earnings $2.40 - $2.18 -
Slide 14: NextEra Energy Partners delivered another solid quarter
NextEra Energy Partners delivered another solid quarter of operational and financial performance NextEra Energy Partners Highlights • Achieved year-to-date growth in adjusted EBITDA and CAFD of 16% and 50%, respectively • NEP Board declared a quarterly distribution of $0.595 per common unit – Up 15%
Slide 15: New projects contributed favorably to NEP's third quarter results
New projects contributed favorably to NEP’s third quarter results NextEra Energy Partners – Third Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $400 $200 $21 ($5) ($17) $350 $24 ($23) $180 $315 ($5) $1 $312 $16 $162 $160 $300 $147 Wind resource ($24) $140 $250 $120 $200 $100 $150 $80 $60 $10
Slide 16: NextEra Energy Partners completed its first two organic growth investments
NextEra Energy Partners successfully completed its first two organic growth investments NEP – Organic Growth Investments • Repowering of ~175 MW Northern Colorado wind project in service – Provides multiple benefits to NEP including increased production, uplift in project cash flow, and longer asset
Slide 17: NEP remains well positioned to deliver on its growth objectives
NEP remains well positioned to deliver on its growth objectives and does not expect to need any acquisitions until 2022 NextEra Energy Partners Adjusted EBITDA and CAFD Expectations Adjusted EBITDA CAFD 12/31/20 Run Rate(1) $1,225 – $1,400 MM $560 – $640 MM Unit Distributions 2020(2) $2.40 - $2.46 a
Slide 18: Q&A Session
Qé&A Session NExTera’ NexTera energy” ENERGY & PARTNERS Z 18
Slide 19: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z 19
Slide 20: NextEra Energy
NEXT@ra ENERGY &%
Slide 21: 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 2019(1) 2020 FFO/Debt 13%-23% 21% 22.8% >21% Debt/EBITDA 3.5x-4.5x 3.6x <4.5x Baa Downgrade Actual Target Moody’s Range Threshold 2019(1) 2020 CFO Pre-WC/Debt 13%-22% 17% 19.9% >17% CFO-Div/
Slide 22: Potential drivers of variability to consolidated adjusted EPS
Potential drivers of variability to consolidated adjusted EPS Balance of 2020 Potential Sources of Variability(1) Florida Power & Light • Wholesale (primarily volume)(2) ± $0.00 - $0.01 • Timing of investment(3) ± $0.01 - $0.02 NextEra Energy Resources • Natural gas prices (± $1/MMBtu change) ± $0.0
Slide 23: NextEra Energy Resources Projected 2020 Portfolio Financial Information
NextEra Energy Resources Projected 2020 Portfolio Financial Information(1) (includes NEER's share of NEP assets) Value of pre-tax tax Maintenance Adjusted credits included in Capital and Pre-Tax Cash Remaining (2) (3) EBITDA adjusted EBITDA Debt Service(4) Other (5) Flows (6) Contract Life (7) NEER
Slide 24: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1)(2) 2019 2020 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR Location MW Jul Aug Sep QTR MW QTR YE MW QTR MW QTR MW Jul Aug Sep QTR YTD Midwest 3,742 91% 90% 104% 96% 3,741 100% 95% 3,844 93% 3,844 97% 3,844 87% 99% 109% 99% 96% West 3,286 107% 98% 114% 107% 3,286 9
Slide 25: Contracted Wind and Solar Development Program
Contracted Wind and Solar Development Program(1) Wind Location MW Solar Location MW Solar Location MW 2019: 2019: 2021-2022 (cont.): Emmons-Logan ND 216 Quitman GA 150 Excelsior NY 280 Crowned Ridge I SD 200 Shaw Creek SC 75 Trelina NY 80 Blue Summit III TX 201 Dougherty GA 120 Watkins Glen NY 50 Sh
Slide 26: Energy Storage Development Program
Energy Storage Development Program(1) Project Location MW Duration Project Location MW Duration 2019: Post – 2022: Montauk NY 3 8.0 Proxima CA 5 4.0 Minuteman MA 5 2.0 Sonoran AZ 250 4.0 Total 2019: 8 Storey AZ 88 3.0 CT DEEP CT 3 2.0 2020: Skeleton Creek OK 200 4.0 Crow Creek CA 20 3.0 Rush Springs
Slide 27: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 6/30/20(2) ($746) Amounts Realized During 3rd Quarter (37) Primary Drivers: Gas Infrastructure ($200) Change in Forward Prices (all positions) (103) Hedges Subtotal – Income Statement (140) Electri
Slide 28: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions) 3rd Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance Description 6/30/20 (2) Realized Prices (Loss) Other (4) 9/30/20 Pretax Amounts Gross Electricity related positions $ 784 $ (14)
Slide 29: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges – Summary of Forward Maturity ($ millions) (1) Gain / (Loss) Asset / (Liability) Balance Total Description 9/30/20 4Q 2020 2021 2022 2023 2024 - 2044 2020 - 2044 (1) Pretax amounts at share Electricity related positions $ 729 $ (29) $ (106) $ (128) $ (76) $ (390) $ (729) Gas In
Slide 30: Reconciliation of GAAP Net Income to Adjusted Earnings (Q3 2020)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended September 30, 2020) Florida Power Gulf Energy Corporate & NextEra Energy, (millions, except per share amounts) & Light Power Resources Other Inc. Net Income (Loss) Attributable to NextEra
Slide 31: Reconciliation of GAAP Net Income to Adjusted Earnings (Q3 2019)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended September 30, 2019) Florida Power Gulf Energy Corporate & NextEra Energy, (millions, except per share amounts) & Light Power Resources Other Inc. Net Income (Loss) Attributable to NextEra
Slide 32: Reconciliation of GAAP Net Income to Adjusted Earnings (Nine Months 2020)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Nine Months Ended September 30, 2020) Florida Power Gulf Energy Corporate & NextEra Energy, (millions, except per share amounts) & Light Power Resources Other Inc. Net Income (Loss) Attributable to NextEra E
Slide 33: Reconciliation of GAAP Net Income to Adjusted Earnings (Nine Months 2019)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Nine Months Ended September 30, 2019) Florida Power Gulf Energy Corporate & NextEra Energy, (millions, except per share amounts) & Light Power Resources Other Inc. Net Income (Loss) Attributable to NextEra E
Slide 34: 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 35: 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 36: 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 37: NextEra Energy Partners
NExTera energy’ PARTNERS Z
Slide 38: Reconciliation of Net Income (Loss) to Adjusted EBITDA and CAFD
Reconciliation of Net Income (Loss) to Adjusted EBITDA and Cash Available for Distribution (CAFD) YTD YTD (millions) Q3 2020 Q3 2019 Q3 2020 Q3 2019 Net Income (loss) $ 195 $ (243) $ (398) $ (488) Add back: Depreciation and amortization 68 68 200 192 Interest expense (93) 372 730 735 Income taxes 25
Slide 39: NEP Wind Production Index
NEP Wind Production Index(1)(2) 2019 2020 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 1,213 91% 92% 104% 96% 1,213 100% 96% 1,213 93% 1,213 98% 1,213 89% 95% 113% 100% 97% West 1,104 108% 100% 118% 109% 1,104 88% 92% 1,10
Slide 40: NEP's credit metrics remain on track
NEP’s credit metrics remain on track Credit Metrics BB Downgrade Actual Target S&P(1) Range Threshold 2019(4) YE 2020(4) HoldCo Debt/EBITDA 4.0x - 5.0x 5.0x 5.1x 4.0x - 5.0x Ba1 Downgrade Actual Target Moody's(2) Range Threshold 2019(4) YE 2020(4) Total Consolidated Debt/EBITDA <7.0x >7.0x 6.1x 4.5x
Slide 41: Expected Cash Available for Distribution
Expected Cash Available for Distribution(1) (December 31, 2020 Run Rate CAFD; $ MM) $1,370-$1,540 ($20-$30) ($110-$120) $1,225-$1,400 ($165-$215) ($430-$510) ($40-$45) ($5-$15) $560-$640 Project-Level Corporate IDR Fees Adjusted Debt Pre-Tax Tax Non-Cash Maintenance Estimated Adjusted EBITDA Expense
Slide 42: 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 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