Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q2 2021 Earnings Presentation
47 slides from Nextera Energy's earnings presentation, Jul 23, 2021
Slide 1: Earnings Conference Call Second Quarter 2021
Earnings Conference Call Second Quarter 2021 July 23, 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 second quarter results
NextEra Energy delivered strong second quarter results NextEra Energy Second Quarter 2021 Highlights • NEE grew adjusted EPS by more than 9% year-over-year • FPL – Strong growth driven by continued investment in the business – Surpassed 40% completion of its 30-by-30 plan with 373 MW of incremental
Slide 4: FPL Results – Second Quarter
FPL’s earnings per share increased 4 cents from the prior-year comparable quarter FPL Results – Second Quarter Net Income EPS ($ MM) $819 $0.42 $749 $0.38 2020 2021 2020 2021 4
Slide 5: Continued investment 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) Second $B Quarter 50.0 FPL – 2020 EPS $0.38 45.0 $44.2 $39.9 5.8 40.0 Drivers: 4.8 35.0 New investments $0.03 30.0 25.0 Other, incl. share dilution $0.0
Slide 6: Gulf Power Results – Second Quarter
Gulf Power’s strong net income growth was driven by investments in the business and continued cost reductions Gulf Power Results – Second Quarter Net Income Regulatory Capital Employed(1) ($ MM) $63 $B $55 5.0 $4.6 $3.9 4.0 3.0 2.0 1.0 0.0 2020 2021 Q2 2020 Q2 2021 Retail Rate Base Other EPS EPS Gro
Slide 7: The Florida economy is recovering from the COVID-19 pandemic
The Florida economy is recovering from the COVID-19 pandemic Florida Economy Florida Unemployment & Florida Case-Shiller Labor Participation Rates(1) Annual Change(2) 16% 64% 20% 14% 62% 15% 12% 60% 10% 58% 10% Labor 8% Participation 56% Rate 6% (Right Axis) 54% 5% 4% 52% 0% 2% 50% 0% 48% -5% 1/12 1
Slide 8: FPL and Gulf Power had continued strong customer growth
FPL and Gulf Power had continued strong customer growth Customer Characteristics FPL Retail kWh Sales FPL Customer Growth(1,2) (Change vs. prior-year period) (Change vs. prior-year quarter) 100 Second 80 Vero Impact 78.4 Quarter UKU # of 60 Impact Customer Growth & Mix 0.1% Customers (000’s) 40 + Us
Slide 9: Energy Resources’ adjusted EPS increased over 7%
Energy Resources’ adjusted EPS increased over 7% from the prior-year comparable quarter Energy Resources Results(1) – Second Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $481 $0.24 $574 $0.29 $531 $0.27 ($315) ($0.16) 2020 2021 2020 2021 2020 2021 2020 2021 9 1) Attributable to
Slide 10: Energy Resources growth driven by new investments
Energy Resources’ growth was primarily driven by contributions from new investments Energy Resources Second Quarter Adjusted EPS(1) Contribution Drivers $0.35 $0.01 ($0.03) $0.04 $0.01 ($0.01) $0.30 $0.29 $0.27 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 Q2 2020 New Existing NEET Customer Other Q2 2021 Adju
Slide 11: Energy Resources Development Program
Energy Resources had another strong quarter of origination execution Energy Resources Development Program(1) • ~1,840 MW of renewables and storage added to backlog – Includes ~285 MW of new wind and wind repowering, ~1,450 MW of new solar, and ~105 MW of new storage • Also originated ~310 MW of sola
Slide 12: NextEra Energy EPS Summary – Second Quarter
NextEra Energy’s adjusted earnings per share increased more than 9% versus the prior-year comparable quarter NextEra Energy EPS Summary – Second Quarter GAAP 2020 2021 Change FPL $0.38 $0.42 $0.04 Gulf Power $0.03 $0.03 $0.00 Energy Resources $0.24 ($0.16) ($0.40) Corporate and Other $0.00 ($0.16) (
Slide 13: 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 $2.3
Slide 14: NextEra Energy Partners Second Quarter 2021 Highlights
NextEra Energy Partners performed well year-to-date and continued to execute on its long-term growth objectives NextEra Energy Partners Second Quarter 2021 Highlights • Strong first half operational and financial performance – Adjusted EBITDA and CAFD up ~9% and 11%, respectively, year-to-date • NEP
Slide 15: NextEra Energy Partners – Second Quarter Drivers
NextEra Energy Partners’ second quarter results were in line with expectations after accounting for lower resource NextEra Energy Partners – Second Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $400 $180 $3 ($15) $19 ($9) ($6) $166 $349 ($3) $350 $160 ($6) $350 $3 $151 $140 $300 $120 $250 ($
Slide 16: 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 ~590 MW net interest in ~830 MW portfolio of renewables from Energy Resources for $563 MM, plus ~$270 MM share of ta
Slide 17: 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 18: NEXT aie
NEXT aie ENERGY & NeExTera energy’ PARTNERS Z
Slide 19: Q&A Session
Qé&A Session NExTera’ NexTera energy” ENERGY & PARTNERS Z% — 19
Slide 20: Appendix
Appendix NExTera’ NexTera energy” ENERGY PARTNERS Z% — 20
Slide 21: NEXTe@ra
NEXTe@ra ENERGY &%
Slide 22: NextEra Energy 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% 20% 23.0% >20% 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 23: Potential drivers of variability to adjusted EPS
Potential drivers of variability to consolidated NextEra Energy adjusted EPS Balance of 2021 Potential Sources of Variability(1) Florida Power & Light • Timing of investment ± $0.005 NextEra Energy Resources • Wind resource(2) (± 1% deviation) ± $0.005 • Interest rates (± 100 bps shift in yield curv
Slide 24: Energy Resources Projected 2021 Portfolio Financial Information
NextEra Energy Resources Projected 2021 Portfolio Financial Information (1) (includes NEER's share of NEP assets) Value of pre-tax tax Remaining Adjusted credits included in Pre-Tax Cash Contract EBITDA(2) adjusted EBITDA(3) Debt Service (4) Other(5) Flows(6) Life (7) NEER Existing Assets(8) Contrac
Slide 25: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1)(2) 2020 2021 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR Location MW Apr May Jun QTR MW QTR MW QTR YE MW QTR MW Apr May Jun QTR YTD Midwest 3,844 91% 90% 113% 97% 3,844 99% 4,004 102% 97% 4,406 91% 4,307 98% 93% 88% 93% 92% West 3,285 90% 103% 109% 100% 3,285 10
Slide 26: Contracted Wind and Solar Development Program
Contracted Wind and Solar Development Program(1) Wind Location MW Solar Location MW Solar Location MW 2021 – 2022: 2021 – 2022: 2023 – 2024: Borderlands NM 100 Point Beach WI 100 Proxima CA 50 Walleye MN 112 Route 66 NM 50 Chariot NH 50 Niyol CO 206 Dodge Flat NV 200 Florida FL 373 Eight Point NY 10
Slide 27: Energy Storage Development Program
Energy Storage Development Program(1) Duration Duration Project Location MW Project Location MW (hours) (hours) 2021 – 2022: 2023 – 2024: Dodge Flat NV 50 4.0 Proxima CA 5 4.0 Fish Springs Ranch NV 25 4.0 Sonoran AZ 260 4.0 Arlington CA 179 4.0 CT DEEP CT 3 2.0 Wheatridge OR 30 4.0 Paulsell CA 20 3.
Slide 28: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 3/31/21(2) ($159) Amounts Realized During 2nd Quarter 8 Primary Drivers: Change in Forward Prices (all positions) (1,166) Gas Infrastructure ($615) hedges Subtotal – Income Statement (1,158) Intere
Slide 29: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions) 2nd Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance Description 3/31/21 Realized Prices (Loss) 6/30/21 Pretax amounts at share Electricity related positions $ 593 $ (41) $ (193) $ (
Slide 30: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges – Summary of Forward Maturity ($ millions) (1) Gain / (Loss) Asset / (Liability) Balance Total Description 6/30/21 2021 2022 2023 2024 2025 - 2044 2021 - 2044 Pretax amounts at share Electricity related positions $ 359 $ (84) $ (79) $ (15) $ 2 $ (183) $ (359) Gas Infrastructure
Slide 31: Reconciliation of GAAP Net Income to Adjusted Earnings (Q2 2021)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended June 30, 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, In
Slide 32: Reconciliation of GAAP Net Income to Adjusted Earnings (Q2 2020)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended June 30, 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, In
Slide 33: Gulf Power – Year Over Year O&M Comparison
Gulf Power – Year Over Year O&M Comparison Six Months Six Months Six Months GAAP O&M vs. 2020 vs. 2018 Ending June 30, Ending June 30, Ending June 30, ($ Millions) 2018 2020 2021 Decrease Decline Decrease Decline Other Operations $166 $127 $110 $ (17) (14%) $ (56) (34%) and Maintenance Storm Accrual
Slide 34: Reconciliation of EPS to Adjusted EPS
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share(1) (2) (2) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 0.58 $ 0.81 $ 0.82 $ 1.02
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: NeExTera energy’
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) YTD YTD (millions) Q2 2021 Q2 2020 2021 2020 Net income (loss) $ (202) $ 127 $ 369 $ (593) Add back: Depreciation and amortization 69 66 136 133 Interest expense 336 (16) (169) 823 Income taxes (22) 13
Slide 40: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1)(2) 2020 2021 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR Location MW Apr May Jun QTR MW QTR MW QTR YE MW QTR MW Apr May Jun QTR YTD Midwest 1,213 94% 94% 108% 98% 1,213 100% 1,213 104% 99% 1,213 92% 1,213 95% 92% 92% 93% 92% West 1,104 88% 103% 106% 98% 1
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: NEP agreed to purchase ~590 MW portfolio from Energy Resources
NextEra Energy Partners has agreed to purchase interests in net ~590 MW portfolio of long-term contracted renewables projects from Energy Resources for $563 MM(1) NextEra Energy Partners Portfolio Additions(2) % to be Gross Net Remaining Project Technology sold to COD MW MW PPA Years(3) NEP High Win
Slide 43: NextEra Energy Partners Expected Cash Available for Distribution
NextEra Energy Partners’ 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 Estimate
Slide 44: 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 45: 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 46: 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 47: 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