Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q1 2022 Earnings Presentation
44 slides from Nextera Energy's earnings presentation, Apr 21, 2022
Slide 1: Earnings Conference Call First Quarter 2022
Earnings Conference Call First Quarter 2022 April 21, 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: NextEra Energy delivered strong first quarter performance
NextEra Energy delivered strong first quarter performance First Quarter 2022 Highlights • NextEra Energy grew adjusted EPS by 10.4% year-over-year • FPL: – Nearly 13% year-over-year net income growth driven primarily by continued investment in the business – Completed planned solar build for 2022, c
Slide 4: FPL's earnings per share increased 5 cents from the prior-year quarter
FPL’s earnings per share increased 5 cents from the prior- year comparable quarter FPL – First Quarter Net Income EPS ($ MM) $875 $777 $0.44 $0.39 2021 2022 2021 2022 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) First $B Quarter 60.0 $53.3 FPL – 2021 EPS $0.39 50.0 $47.9 Drivers: 40.0 New investments $0.05 30.0 FPL – 2022 EPS $0.44 20.0 10.0 0.0 Q1 2021 Q1 2022
Slide 6: FPL Development Highlights
FPL continues to identify smart capital investments to further enhance its already best-in-class customer value proposition FPL Development Highlights • Continues to progress one of the largest-ever solar expansions – Recently filed Ten-Year Site Plan projects ~9,500 MW of additional cost-effective
Slide 7: Florida's economy remains healthy and FPL's retail sales show strong growth
Florida’s economy remains healthy and FPL’s retail sales continue to show strong underlying growth trends Florida Economy & Customer Characteristics Retail kWh Sales Customer Growth(1,2) (Change vs. prior-year quarter) (Change vs. prior-year quarter) First 120 UKU Vero Impact Quarter Impact 100 91.4
Slide 8: Energy Resources adjusted EPS contribution increased 2 cents
Energy Resources’ adjusted earnings per share contribution increased 2 cents from the prior-year comparable quarter Energy Resources Results(1) – First Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $491 $0.25 $628 $0.32 $598 $0.30 ($1,499) ($0.76) 2021 2022 2021 2022 2021 2022 20
Slide 9: Energy Resources growth driven by existing generation and storage assets
Energy Resources’ growth was primarily driven by contributions from existing generation and storage assets Energy Resources First Quarter Adjusted EPS(1) Contribution Drivers $0.40 $0.05 ($0.02) $0.01 $0.35 ($0.02) $0.32 $0.30 $0.00 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 Q1 2021 New Existing Cust
Slide 10: Energy Resources Development Program
Energy Resources had another strong quarter of origination and continues to see high demand for clean energy projects Energy Resources Development Program(1) • ~1,770 net MW of renewables and storage added to backlog – Includes ~1,200 net MW of new wind, ~440 MW of solar, and ~130 MW of storage proj
Slide 11: NextEra Energy EPS Summary – First Quarter
NextEra Energy’s adjusted earnings per share increased 10.4% versus the prior-year comparable quarter NextEra Energy EPS Summary – First Quarter GAAP 2021 2022 Change FPL $0.39 $0.44 $0.05 Energy Resources $0.25 ($0.76) ($1.01) Corporate and Other $0.20 $0.09 ($0.11) Total $0.84 ($0.23) ($1.07) Adju
Slide 12: Adjusted Earnings Per Share Expectations
NextEra Energy remains well positioned to continue its strong adjusted earnings and dividends per share growth 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 - 2022 adjusted EPS $3.33 $2.93 - • From 2021 to 2025
Slide 13: NextEra Energy Partners First Quarter 2022 Highlights
NextEra Energy Partners delivered solid first quarter results and continued to execute on its long-term growth plan NextEra Energy Partners First Quarter 2022 Highlights • Adjusted EBITDA grew more than 16% year-over-year – Primarily driven by strong contributions from new projects added in 2021 • N
Slide 14: NextEra Energy Partners adjusted EBITDA growth drivers
NextEra Energy Partners’ adjusted EBITDA growth was driven primarily by contributions from new projects NextEra Energy Partners – First Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $75 ($9) ($6) $25 ($29) ($2) $412 $184 ($6) $354 ($5) $169 (~$55) due to absence of Winter Storm Uri (~$55) du
Slide 15: NextEra Energy Partners Adjusted EBITDA and CAFD Expectations
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 12/31/22 Run-Rate(1) $1,775 – $1,975 MM $675 – $765 MM Unit Distributions 2022(2) $3.17 – $3.25 annualized rate by year-end
Slide 16: NEXT aie
NEXT aie ENERGY & NeExTera energy’ PARTNERS Z
Slide 17: Q&A Session
Qé&A Session NeExTera’ NexTera energy” ENERGY & PARTNERS 17
Slide 18: Appendix
Appendix NeExTera’ NexTera energy” ENERGY & PARTNERS 18
Slide 19: NEXTe@ra
NEXTe@ra ENERGY &%
Slide 20: 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% 21.5% >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% 17.5% >17% CFO-Div/
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 ± $0.01 - $0.015 NextEra Energy Resources • Wind resource(2) (± 1% deviation) ± $0.01 - $0.015 • 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 - $600
Slide 23: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1)(2) 2021 2022 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR Location MW Jan Feb Mar QTR MW QTR MW QTR MW QTR YE MW Jan Feb Mar QTR Midwest 4,406 82% 85% 107% 91% 4,307 93% 4,307 99% 4,440 101% 96% 5,037 109% 121% 115% 114% West 3,284 100% 97% 103% 100% 3,583 101% 3
Slide 24: Contracted Wind and Solar Development Program
Contracted Wind and Solar Development Program(1) Wind Location MW Solar Location MW Solar Location MW 2021: 2021: 2023 – 2024: Borderlands NM 100 Point Beach WI 100 Proxima CA 50 Niyol CO 206 New England Various 126 Chariot NH 50 White Mesa TX 501 Quitman II GA 150 Florida FL 373 Sky River CA 60 Coo
Slide 25: Energy Storage Development Program
Energy Storage Development Program(1) Duration Duration Project Location MW Project Location MW (hours) (hours) 2021: 2023 – 2024: Cool Springs GA 40 2.0 Proxima CA 5 4.0 Wilmot AZ 30 4.0 Sonoran AZ 260 4.0 Blythe 110 CA 63 4.0 CT DEEP CT 3 2.0 Blythe II CA 115 4.0 Paulsell CA 20 3.0 Blythe III CA 1
Slide 26: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 12/31/21 ($2,097) Primary Drivers: Amounts Realized During 1st Quarter 187 Gas Infrastructure Change in Forward Prices (all positions) (1,318) hedges ($1,622) Subtotal – Income Statement (1,131) El
Slide 27: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions) 1st Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance Description 12/31/21 Realized Prices (Loss) 3/31/22 NEE Pretax amounts at share Electricity related positions $ (191) $ 63 $ (571
Slide 28: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges(1) – Summary of Forward Maturity ($ millions) (1) Gain / (Loss)(2) Asset / (Liability) Balance Total Description 3/31/22 2022 2023 2024 2025 2026 - 2050 2022 - 2050 Pretax amounts at share Electricity related positions $ (699) $ (117) $ 160 $ 154 $ 122 $ 380 $ 699 Gas Infrastru
Slide 29: Reconciliation of GAAP Net Income to Adjusted Earnings (Q1 2022)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended March 31, 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. $ 875 $ (1,499) $
Slide 30: 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) Energy Corporate & NextEra (m illions, except per share am ounts) FPL Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc. $ 777 $ 491 $ 398
Slide 31: Reconciliation of EPS to Adjusted EPS (FY 2021)
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share (Twelve Months Ended December 31, 2021) Earnings Per Share Attributable to NextEra Energy, Inc. (assum ing dilution) $ 1.81 Adjustments - pretax: Net losses associated w ith non-qualifying hedges
Slide 32: 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 33: 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 34: 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 35: NeExTera energy’
NeExTera energy’ PARTNERS Z
Slide 36: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q1 2022 Q1 2021 Net income $ 333 $ 571 Add back: Depreciation and amortization 103 67 Interest expense (284) (504) Income taxes 50 70 Tax credits 200 132 Amortization of intangible assets – PPAs 36
Slide 37: Reconciliation of 2021 Adjusted EBITDA and CAFD Excluding Storm Uri
Reconciliation of 2021 Adjusted EBITDA and CAFD Adjusted to Exclude the Impact of Storm Uri(1) Adjusted CAFD EBITDA Q1 2021 $354 $184 Removal of Storm Uri Impact ($55) ($55) Q1 2021 Adjusted for Storm Uri Impact $299 $129 Q1 2022 $412 $169 Year-over-Year Growth 38% 31% 1) See slide 36 for reconcilia
Slide 38: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1)(2) 2021 2022 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 80% 91% 106% 92% 1,213 93% 1,213 101% 1,512 98% 96% 1,512 108% 123% 114% 115% West 1,104 96% 96% 100% 98% 1,104 9
Slide 39: NextEra Energy Partners' credit metrics remain on track
NextEra Energy Partners’ credit metrics remain on track Credit Metrics BB Downgrade Actual Target S&P(1) 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 40: NextEra Energy Partners' Expected Cash Available for Distribution
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 Project-Level Corporate IDR Fees(2) Adjusted EBITDA Debt Service(3) Pre-Tax Tax Non-Cash
Slide 41: 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 42: 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 43: 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 44: 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