Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Edison Electric Institute Conference 2023
57 slides from Nextera Energy's conference presentation, November 2023
Slide 1: Edison Electric Institute Conference
Edison Electric Institute Conference November 2023 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 a leading clean energy company anchored by two industry leaders
NextEra Energy is a leading clean energy company anchored by two industry leaders and supported by a common platform 70 GW $121 B $172 B In Operation(1) Market Total Assets(3) Capitalization(2) Clean Energy Generation Portfolio Supply Chain, Engineering and Construction Best-in-class Operations The
Slide 4: NextEra Energy is well positioned for future growth given its focus on regulated investment
NextEra Energy is well positioned for future growth given its focus on regulated investment and contracted renewables NextEra Energy Business Mix(1) • One of the fastest >70% <30% • Over 20% renewable growing states in the U.S. origination market share • Bills well below the • Over 20 years experien
Slide 5: NextEra Energy has continued to execute on its growth expectations
NextEra Energy has continued to execute on its growth expectations while maintaining a strong balance sheet NextEra Energy Execution Recent Highlights Adjusted Earnings Per Share • Grew adjusted EPS ~11% year-to-date 2023(1) ~9.8% $2.90 CAGR • Executing against FPL’s capital plan for the benefit $1.
Slide 6: NextEra Energy has a clear vision and a clear strategy to lead decarbonization
NextEra Energy has a clear vision and a clear strategy to lead the decarbonization of the U.S. NextEra Energy Strategy Lead Lead Lead Decarbonization Decarbonization Transmission Decarbonize of the U.S. Buildout to of the U.S. Ourselves Economy Support New Power Sector (C&I) Renewables Lead by Repli
Slide 7: Renewables provide customers the ability to lock in power costs
Renewables provide customers the ability to lock in power costs and avoid potentially volatile market power prices for years to come Market Prices for Renewables Alternatives(1) Forward Gas Prices Forward Power Prices 7x24 ($/MMBtu) 7x24 ($/MWh) $4.5 55 50 $4.0 45 61% ~30% 10/16/2023 40 ~57% 10/16/2
Slide 8: The U.S. clean energy transition presents near-term and long-term opportunity
The U.S. clean energy transition presents both a near-term and long-term opportunity for new renewables and storage U.S. Renewables and Storage Opportunity Near-Term(1) Long-Term(2) 2023 - 2026 2027 - 2030 2021 - 2050 (Full Economy Decarbonization) ~175 GW ~250 GW ~7,000 GW U.S. renewables U.S. rene
Slide 9: FPL is recognized as one of the best and most innovative electric providers
FPL is recognized as one of the best and most innovative electric providers in the U.S. Florida Power & Light Company(1) Largest electric utility in the U.S. ~5.8 MM customer accounts ~5.8 MM customer accounts Areas Served by FPL (in Northwest FL, Counties with Areas ~34 GW in operation Served by FP
Slide 10: FPL's strategy is focused on delivering outstanding customer value
FPL’s strategy is focused on delivering outstanding customer value through smart capital deployment FPL’s Areas of Focus • Unyielding commitment to 1000 kWh Typical Monthly Bill Growth(1) customer value proposition $200 $/kWh – Low bills, high reliability and $150 ~2% excellent customer service $100
Slide 11: FPL's capital investment plan is focused on high reliability and low bills
FPL’s well established capital investment plan is focused on providing high reliability and low bills to customers FPL’s Customer Value Proposition 2022 - 2025 Capital Expenditures(1) Service Reliability(3) Good (minutes) Renewables Expect ~9% ~45% ~140 CAGR in T&D ~66% regulatory capital Other, inc
Slide 12: FPL's Solar and T&D Investment Opportunity
Solar and T&D investments allow FPL to serve customer demand while providing clean, reliable and affordable generation for customers FPL’s Solar and T&D Investment Opportunity • Solar: Solar Capacity(2) – Expect to deploy ~$10 B in solar ~5 GW ~7.9 GW investment from 2022 - 2025 for of new solar the
Slide 13: FPL has significant investment opportunities for the benefit of customers
FPL has significant investment opportunities for the benefit of customers FPL 2022 - 2025 Capital Expenditures Projected Recovery Opportunity Status Investment(1) Mechanism SoBRA (2024 and 2025) 24 sites projected to be ~$2.7 B Solar Base Rate Adjustment constructed 2024 and 2025 SolarTogether Phase
Slide 14: Energy Resources is the leading North American clean energy company
Energy Resources is the leading North American clean energy company NextEra Energy Resources(1) World leader in electricity States with Project(s) in Operation generated from the wind Wind and sun Natural Gas Nuclear ~34 GW(2) of clean energy in Universal Solar operation Storage 23 GW wind Other Pip
Slide 15: Energy Resources' Areas of Focus
Energy Resources is focused on helping both power and commercial and industrial customers decarbonize their operations with low-cost renewables Energy Resources’ Areas of Focus Energy Resources’ 2020-2023 Signed PPAs(1) Competitive Advantages Power • Requires credible developers with scale and exper
Slide 16: Renewables are the largest growth driver for Energy Resources
Renewables are the largest growth driver for Energy Resources Energy Resources’ Value Proposition Clean Energy Focus Operating Portfolio Strength Potential Portfolio Growth Energy Resources’ • Renewables portfolio 2022 Total U.S. Installed Capacity by 2024E-2026E Adjusted EBITDA(1) is characterized
Slide 17: For over 20 years, we have been committed to renewables
For over 20 years, we have been committed to renewables, leveraging our scale, customer relationships and expertise to build high-quality, profitable renewable projects Competitive Advantages Supply Top Decile Buying Chain Wind & Cost of Power Management Solar O&M Capital Construction Optimization ~
Slide 18: Digital Transformation and Innovation
From development to operations, Energy Resources’ digital solutions across the value chain are helping to drive costs lower for the benefit of our customers Digital Transformation and Innovation Renewable Siting Battery Storage NextEra 360 Machine Learning Optimization Integration Software Platform
Slide 19: Clean energy transition represents a significant opportunity for Energy Resources
The clean energy transition represents a significant opportunity for Energy Resources to leverage its competitive advantages and build renewables and storage Renewables Growth Opportunity Clean Energy Transition Demand Drivers U.S. Electricity Production by Fuel Type(1) Federal 16% Low-Cost & State
Slide 20: Energy Resources is focused on executing its renewables development program
Energy Resources is focused on executing its industry- leading renewables development program Energy Resources Development Program(1) (Development Expectations as of October 24, 2023) 2023 - 2024 2023 - 2024 2025 - 2026 2025 - 2026 2023 - 2026 COD Expectations COD Expectations Expectations Wind 4,02
Slide 21: NextEra Energy's Financial Expectations
NextEra Energy remains well positioned to continue our strong adjusted earnings per share and dividends per share growth NextEra Energy’s Financial Expectations(1) • Expect 6 to 8% annual growth rate through 2026, off the 2024 adjusted EPS expectations range $3.63 - • From 2021 to 2026 expect $3.45
Slide 22: PEG Ratio – Top 10 Power Companies by Market Cap
Considering our historical track record and growth prospects, NextEra Energy trades at an attractive valuation relative to peers PEG Ratio – Top 10 Power Companies by Market Cap(1) 4.2x 3.6x Average of Top 10 Power 2.6x Companies: 2.5x 2.5x 2.5x 2.4x 2.3x 2.0x 1.7x 1.2x A B C D E F G NEE H I NextEra
Slide 23: NextEra Energy Value Proposition
We believe NextEra Energy presents a compelling investment opportunity NextEra Energy Value Proposition Drill-down of S&P 500 Companies Adj. EPS CAGR(5) 394 Investment grade(1) ~9% ~8% ~6% 104 Market capitalization > $60 B 50 Adj. EPS CAGR > 8% past 15 years(2) NEE Median Median S&P 500 UTY 30 ‘22 –
Slide 24: NextEra Energy Partners
NExTera energy’ PARTNERS 2
Slide 25: NextEra Energy Partners' Portfolio
NextEra Energy Partners is a leading clean energy investment vehicle NextEra Energy Partners’ Portfolio(1) ~8,049 MW of wind ~1,790 MW of solar ~273 MW paired storage States with Project(s) in ~4.3 Bcf total natural Operation Wind gas pipeline capacity(2) Solar Storage Pipeline NextEra Energy Partne
Slide 26: NextEra Energy Partners' Areas of Focus
NextEra Energy Partners is focused on executing against its transition plan NextEra Energy Partners’ Areas of Focus ✓ Suspend IDR(1) fees through 2026 to largely replace gas pipeline cash available for distribution ✓ Executed agreement to sell Texas pipeline portfolio and use the proceeds (subject t
Slide 27: Sale of the Texas pipeline portfolio
Assuming a successful closing, the sale of the Texas pipeline portfolio allows NextEra Energy Partners to address equity buyouts for two near-term CEPFs Texas Pipeline Portfolio Sale • Announced definitive agreement to sell Texas pipeline portfolio for $1.815 B • Upon closing, proceeds are expected
Slide 28: NextEra Energy Partners' transition plan
NextEra Energy Partners’ transition plan is focused on unitholder value and improving the partnership’s cost of capital NextEra Energy Partners’ Plan 1 Execute sale of Texas pipeline portfolio in 2024 and sell Meade pipeline in 2025 2 Eliminate acquisitions required for 2024 growth 3 Eliminate growt
Slide 29: NextEra Energy Partners' growth plan includes wind repowerings
NextEra Energy Partners’ growth plan includes wind repowerings which provide an opportunity to deploy capital at attractive returns Repower Benefits Capital Costs Repower Value Drivers ($/kW) (CAFD Yield) Good ~50%- 80% of the cost of new Good build (1) Greenfield Repower Reset PTCs OpEx NCF Uplift
Slide 30: NextEra Energy Partners' Financial Expectations
NextEra Energy Partners is focused on executing its transition plan NextEra Energy Partners’ Financial Expectations(1) Adjusted EBITDA CAFD 12/31/23 Run Rate(2) $1,900 - $2,100 MM $730 - $820 MM Unit Distributions 2023 DPU(3) $3.52 annualized rate by year-end DPU Growth through 5% - 8% average annua
Slide 31: Appendix
Appendix NExTera’ NeExTera energy” ENERGY 2 PARTNERS
Slide 32: NextEra Energy
NEXTCra’ ENERGY &
Slide 33: NextEra Energy plans to fund the business in a manner similar to the past
NextEra Energy plans to fund the business in a manner similar to the past NextEra Energy Funding Plan 2024-2026(1) ($ B) ~$3 ~($14) ~$3 ~$25 - $35 ~$65 - $75 ~$20 - $30 ~$35 - $45 ~($19) 2024-2026 Cash Debt Corporate Tax Equity Equity Unit NEP Sales / Dividend (2) 2024-2026 From Operations Maturitie
Slide 34: IRA transferability provisions allow for the sale of tax credits
IRA transferability provisions allow for the sale of tax credits to third parties Tax Credit Transferability • The sale of tax credits serves as a new source of Illustrative Example capital funding for renewable projects • It provides NextEra Energy the opportunity to sell tax credits and recognize
Slide 35: Interest Rate Sensitivity
NextEra Energy’s robust interest rate hedge program limits interest rate exposure Interest Rate Sensitivity Estimated Adjusted EPS Impact of +50 bps Interest Rate Increase(1) 2024 2025 2026 $0.00 ($0.03) – ($0.05) ($0.03) – ($0.05) Interest rate sensitivity takes into account existing debt, includin
Slide 36: Tax credits are a key economic driver of renewable projects
Tax credits are a key economic driver of renewable projects Tax Credits • Tax credits drive the economics of renewable projects and are accounted for when setting PPA prices for customers – Without a tax credit, PPA prices would be higher • NextEra Energy has a choice as to how it can monetize tax c
Slide 37: Tax equity allows for efficient monetization of tax benefits
Tax equity allows for the efficient monetization of renewable energy tax benefits What is Tax Equity? • Renewable developers’ capacity for tax benefits is often limited driving a need for developers to partner with companies that can more readily utilize the tax benefits • A partnership structure is
Slide 38: Financial Reporting for Tax Credits
NextEra Energy has a choice as to how it can monetize tax credits – it can reduce its tax payments or monetize them through sales via transferability or tax equity Financial Reporting for Tax Credits Transferability with NEE’s Tax Return Project Finance Tax Equity • The same as monetized • Reported
Slide 39: Monetization through tax equity impacts financial statement presentation
Monetization through tax equity impacts financial statement presentation, but excluding financing costs, the income and cash from the tax credit is the same Financial Reporting of Tax Credits: Year 1-10(1) Net Income Attributable to NEE ($ MM) Cash Flow ($ MM) $250 $250 $195 $151 $127 $195 $151 $127
Slide 40: Applied on NextEra Energy's Tax Return
As renewable projects generate tax credits, earnings is recognized as a reduction in tax expense Applied on NextEra Energy’s Tax Return(1) Year: 0 1 2 3 4 5 6 7 8 9 10 Total Income Statement Tax Benefit 17.3 18.1 18.1 18.8 19.5 19.5 20.2 21.0 21.0 21.7 195.2 Cash Flow Statement Operating Cash Flow 1
Slide 41: Project Finance with Transferability
Transferability provides a new way to monetize tax credits if they are unable to be used on a tax return Project Finance with Transferability(1) Year: 0 1 2 3 4 5 6 7 8 9 10 Total Income Statement After-tax Interest Expense (6.3) (5.9) (5.5) (5.0) (4.6) (4.2) (3.8) (3.4) (2.9) (2.5) (44.1) Tax Benef
Slide 42: Tax equity monetization with upfront cash payment
Under tax equity monetization, the investor makes an upfront cash payment in exchange for the tax attributes Tax Equity(1) GAAP presentation collapses the (3) cost of tax Year: 0 (1) 1 2 3 4 5 6 7 8 9 10 Total equity with the Balance Sheet Rollforward: earnings from (2) tax credits sold Noncontrolli
Slide 43: Energy Resources Projected 2023 Portfolio Financial Information
Energy Resources reports adjusted EBITDA on a quarterly basis which shows the inclusion of grossed up tax credits NextEra Energy Resources Projected 2023 Portfolio Financial Information Includes grossed up tax credits generated during the period to (includes NEER’s share of NEP assets) reflect the p
Slide 44: NextEra Energy Credit Metrics
NextEra Energy’s credit metrics remain on track NextEra Energy Credit Metrics A- Downgrade Actual Target S&P Range Threshold 2022 2023 FFO/Debt 13% - 23% 18% 19.2% >18% Baa Downgrade Actual Target Moody’s Range Threshold 2022 2023 CFO Pre-WC/Debt 13% - 22% 17% 18.4% >17% CFO-Div/Debt 9% - 17% 12.1%
Slide 45: Reconciliation of GAAP Net Income to Adjusted Earnings (Nine Months 2023)
Reconciliation of GAAP Net Income to Adjusted Earnings (Loss) Attributable to NextEra Energy, Inc. (Nine Months Ended September 30, 2023) Energy Corporate & NextEra Energy, (millions, except per share amounts) FPL Resources Other Inc. Net Income (Loss) Attributable to NextEra Energy, Inc. $ 3,406 $
Slide 46: Reconciliation of GAAP Net Income to Adjusted Earnings (Nine Months 2022)
Reconciliation of GAAP Net Income to Adjusted Earnings (Loss) Attributable to NextEra Energy, Inc. (Nine Months Ended September 30, 2022) Energy Corporate & NextEra Energy, (millions, except per share amounts) FPL Resources Other Inc. Net Income (Loss) Attributable to NextEra Energy, Inc. $ 2,939 $
Slide 47: Reconciliation of EPS to Adjusted EPS
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share(1) 2012 2013 2014 2015 2016(2) 2017(2) 2018 2019 2020 2021 2022 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 1.14 $ 1.12 $ 1.40 $ 1.52 $ 1.56 $ 2.85 $ 3.47 $ 1.94
Slide 48: 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 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 announced sale of Texas pipeline portfolio to Kinder Morgan
On November 6, 2023, NextEra Energy Partners announced the sale of its Texas pipeline portfolio to Kinder Morgan for $1.815 B Texas Pipeline Portfolio Sale • On November 6, 2023, the sale of its Texas pipeline portfolio Texas Pipeline Portfolio - Summary Economics ($ MM) to Kinder Morgan for $1.815
Slide 53: 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 2022(4) YE 2023 FFO/Debt 12% - 20% 12% 19.9% >15% HoldCo Debt/EBITDA 5.0x - 6.0x 6.0x 4.2x <6.0x Ba1 Downgrade Actual Target Moody's (2) Range Threshold 20
Slide 54: 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, equity issuances and other expectations assume, among other things, normal weather and
Slide 55: 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 56: 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 57: 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
NextEra Energy — Edison Electric Institute Conference 2023 on 6ix