Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (May 2023)
63 slides from Nextera Energy's investor presentation, May 2023
Slide 1: May Investor Presentation
se = May Investor Presentation NEXTera’ NeExTera energy’ ENERGY 2 PARTNERS 2 — —
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 an industry-leading clean energy company
NextEra Energy is an industry-leading clean energy company 67 GW $156 B $165 B In Operation(1) Market TotalAssets(3) Capitalization(2) Clean Energy Generation Portfolio Integrated Supply Chain, Engineering and Construction The largest electric The world leader in utility in the United electricity ge
Slide 4: NextEra Energy has a long-term track record of delivering value to shareholders
NextEra Energy has a long-term track record of delivering value to shareholders Adjusted Earnings Per Share Total Shareholder Return(1) $2.90 ~8.3% CAGR 669% ~480% Outperformance $0.88 541% vs. S&P 500 Utilities 379% S&P 500 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 255% 226% D
Slide 5: NextEra Energy offers an attractive value proposition
Considering our historical track record and growth prospects, NextEra Energy offers an attractive value proposition Adjusted EPS CAGR 2012 - 2022 Total Shareholder Return 2012 - 2022 Top 10 Power Companies(1) Top 10 Power Companies(1,2) 9.8% 528% 7.4% 6.4% Average Average excluding 261% excluding 5.
Slide 6: NextEra Energy is off to a strong start in 2023
NextEra Energy is off to a strong start in 2023, continuing its long track record of outstanding operational and financial performance First Quarter 2023 NextEra Energy Highlights ~970 MW ~4,600 MW ~20 GW ~13.5% of cost-effective of FPL owned and of cost-effective adjusted EPS solar projects operate
Slide 7: Annual employee-led productivity initiative generated ~$2.6 B in planned run-rate savings
Our annual employee-led productivity initiative has generated approximately ~$2.6 B(1) in planned annual run- rate savings Projects Momentum, Accelerate and Velocity Summary • Annual bottoms-up, Annual Run-Rate Savings(2) employee-generated idea $3,000 process for reducing costs • In 2023, team gene
Slide 8: Clear vision and strategy to extend leadership in the U.S. clean energy transition
NextEra Energy has a clear vision and a clear strategy to extend our leadership in the U.S. clean energy transition which we believe will reduce costs for our customers NextEra Energy Decarbonization Strategy Lead Lead Lead Decarbonization Decarbonization Transmission Decarbonize of the U.S. Buildou
Slide 9: Clean energy transition accelerated by multiple renewable demand drivers
The clean energy transition occurring across the U.S. is being accelerated by multiple renewable demand drivers that support our decarbonization strategy Demand Drivers for New Renewables Economic Sustainability Regulatory Renewables Volatile Oil Cost of and Corporate Federal and Lowest Cost and Nat
Slide 10: Attractive renewables economics driving transformation of the U.S. generation fleet
Attractive renewables economics are expected to continue driving a transformation of the U.S. generation fleet Estimated Costs of Generation Resources Late-2020s(1) ($/MWh) Near-Firm Wind Near-Firm Wind(2) $14 - $21 Near-Firm Solar Near-Firm Solar(2) $17 - $24 Existing Natural Gas Existing Natural G
Slide 11: Renewables let customers avoid volatile gas and wholesale power prices
Renewables provide customers the opportunity to avoid volatile natural gas and wholesale power prices and instead lock-in low-cost energy supply for decades Market Prices for Renewables Alternatives(1) Forward Gas Prices Forward Power Prices 7x24 ($/MMBtu) 7x24 ($/MWh) $5 $50 4/25/2023 4/25/2023 $4
Slide 12: Competitive position of renewables continues to improve after the Inflation Reduction Act
The competitive position of renewables continues to improve as the impacts of the Inflation Reduction Act have more than offset the inflation observed over the last two years Prevailing Inflation Impacts on Levelized Costs(1) Impacts of Inflation on Levelized Costs(1) $/MWh Comparison in 2023(2) $3/
Slide 13: Florida Power & Light is recognized as one of the best electric providers
Florida Power & Light 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 oper
Slide 14: FPL's blueprint for achieving its Real Zero carbon emissions goal
FPL’s blueprint for achieving its Real Zero carbon emissions goal involves strategic actions to drive customer value, including enhanced reliability and resiliency FPL’s Decarbonization Opportunity(1) Solar & Battery Storage + T&D Investment + Green Hydrogen 92 GW 50 GW 16 GW New solar New battery o
Slide 15: FPL's Areas of Focus
At FPL, we remain focused on identifying smart capital investments to further improve our outstanding customer value proposition FPL’s Areas of Focus • Unyielding commitment to low bills, Operational Cost Effectiveness(1) high reliability and excellent $100 Adjusted Regressed customer service Top Qu
Slide 16: FPL investment opportunities embedded in its settlement agreement
FPL has significant investment opportunities embedded in its settlement agreement that are expected to generate customer savings and further enhance reliability FPL 2022 - 2025 Capital Expenditures Projected Recovery Opportunity Status Investment(1) Mechanism SoBRA (2024 and 2025) Twenty-four sites
Slide 17: 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 ~31 GW(2) of clean energy in Universal Solar operation Storage 23 GW wind Other Pip
Slide 18: Energy Resources' competitive advantages
We believe Energy Resources’ competitive advantages position us to be the clean energy solutions provider of choice for a wide variety of customers Energy Resources Competitive Differentiators Advanced analytics i that enable superior site identification and design Scale of project pipeline and inte
Slide 19: Energy Resources has leveraged development skills to solidify market share
Energy Resources has leveraged its best-in-class development skills to solidify its market share and position itself as the preferred clean energy partner for customers Superior Renewables Development Growth Renewables Portfolio Growth(1) U.S. Renewables and GW 30 Storage Growth(2) 25 ~13% 20 CAGR 1
Slide 20: Energy Resources development program of new renewables and storage
Energy Resources remains focused on capitalizing on decarbonization and executing on our industry-leading development program of new renewables and storage Energy Resources Development Program(1) (Development Expectations as of April 25, 2023) 2023 - 2024 2023 - 2024 2025 - 2026 2025 - 2026 2023 - 2
Slide 21: Energy Resources' renewable capacity expected to exceed any U.S. company's total capacity by 2026
Energy Resources’ total renewable generation capacity is expected to exceed the total installed capacity for ALL generation types of any company in the U.S. by 2026 2022 Total U.S. Installed Capacity by Company(1) (ALL Generation Types, GW) 69 Energy Resources ~41 GW Renewable Capacity Increase 57 F
Slide 22: Decarbonization could create a ~$4 trillion renewables and storage opportunity
Decarbonization of the entire U.S. economy could create a ~$4 trillion renewables and storage investment opportunity through 2050 2050 Decarbonized U.S. Economy: Growth in Renewables and Storage Opportunity(1) ~$4 T ~33x ~7,000 GW Excess energy converted to hydrogen to ~$2 T decarbonize other ~17x s
Slide 23: Commercial and industrial customers need comprehensive clean energy solutions
Commercial and industrial customers need comprehensive clean energy solutions to help reduce their energy costs and carbon footprint Commercial and Industrial Customers Customer Operations Objectives Integrated Clean Energy Solution 1 Analyze • Understand energy usage Lower • Evaluate energy costs E
Slide 24: Energy Resources positioned to design comprehensive clean energy solutions
Energy Resources is better positioned than anyone in the industry to leverage its teams, tools, data and decades of experience to design comprehensive clean energy solutions Integrated Clean Energy Solution Decarbonize Decarbonize Electricity Usage Business Operations Scope 2 Scope 1 Reduce Firming
Slide 25: Growing Green Hydrogen Opportunity
As the world leader in renewables and a leader in battery storage, we believe we are the logical partner for developing some of the best green hydrogen sites around the country Growing Green Hydrogen Opportunity • Energy Resources is well- Announced Opportunities positioned to be the logical • Clean
Slide 26: NextEra Energy Transmission is an industry leader in competitive transmission
NextEra Energy Transmission is an industry leader in competitive transmission and has a strong track record of success across the U.S. NextEra Energy Transmission Highlights Recent Highlights Near-Term Growth Prospects • ~$400 MM in transmission and • Decarbonization is creating substation upgrades
Slide 27: NextEra Energy's Financial Expectations
NextEra Energy remains well positioned to continue our strong adjusted earnings 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 $3.63 - $4.00 range $3.45 - $3.23 - $3.70 • From 2021 to
Slide 28: 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) 379 Investment grade(1) >9% ~8% ~6% 105 Market capitalization > $60 B 47 Adj. EPS CAGR > 8% past 15 years(2) NEE Median Median S&P 500 UTY 28 ‘22 –
Slide 29: NextEra Energy Partners
NExTera energy’ PARTNERS 2
Slide 30: NextEra Energy Partners is a best-in-class clean energy company
NextEra Energy Partners is a best-in-class clean energy company with a market capitalization of ~$10 B(1) NextEra Energy Partners’ Portfolio(2) ~7,560 MW of wind ~1,530 MW of solar ~240 MW paired storage States with Project(s) in Operation ~4.3 Bcf total natural Wind Solar gas pipeline capacity(3) S
Slide 31: NextEra Energy Partners' Geographic Diversity
NextEra Energy Partners has diversified its portfolio over time while expanding geographically NextEra Energy Partners’ Geographic Diversity IPO June 20, 2019 March 31, 2023 5 U.S. states and One Canadian province(1) 15 U.S. states 30 U.S. states ~990 total MW ~5,325 total MW ~9,330 total MW ~700 MW
Slide 32: NextEra Energy Partners' Portfolio Scale and Diversity
NextEra Energy Partners has consistently grown its portfolio and is now the 7th largest generator of wind and solar energy in the world NextEra Energy Partners’ Portfolio Scale and Diversity GW in Operation World’s Top Wind & Solar Generators(1) (TWh) 9.3 106 8.0 5.3 5.7 4.7 55 54 3.7 43 2.2 2.8 34
Slide 33: NextEra Energy Partners' Playbook
NextEra Energy Partners is laser focused on delivering on its commitments NextEra Energy Partners’ Playbook Financial Consistent, Discipline Clean Long-Term Portfolio and Growth Flexibility ✓ ✓ ✓ Favorable Prudent Operational Execution Capital Tax Excellence Allocation ✓ ✓ Attributes ✓ ✓ Distributio
Slide 34: NextEra Energy Partners' Competitive Advantages
Energy Resources’ operating and development platform provides significant benefits to LP unitholders NextEra Energy Partners’ Competitive Advantages • Benefits from Energy Resources’ Scale best-in-class O&M and advantage development expertise AI / Data Development – Proprietary algorithms to manage
Slide 35: NextEra Energy Partners Asset Suitability
NextEra Energy Partners continues to focus on investing in long-term contracted clean energy assets with attractive cash flows NextEra Energy Partners Asset Suitability Attractive Characteristics of Assets: Potential New Development at Long-Term Contract Existing Portfolio Energy Resources Stable Ca
Slide 36: NextEra Energy Partners Growth Opportunities
NextEra Energy Partners has terrific growth visibility with three ways to deliver on its growth objectives NextEra Energy Partners Growth Opportunities Acquisitions Organic Third-Party from Energy Growth Acquisitions Resources Access to ~1.3 GW of ~300 GW(1) ~38 to 58 GW repowerings being representi
Slide 37: NextEra Energy Partners' Energy Transition Plan
NextEra Energy Partners has a unique opportunity to become the leading 100% pure-play renewables company NextEra Energy Partners’ Energy Transition Plan Current Portfolio NEP’s Vision • Grown the renewables portfolio by roughly 9 times Capitalize from ~1 GW to ~9 GW on Clean • Currently 7th largest
Slide 38: Simplification and recapitalization plan
Our simplification and recapitalization plan allows NextEra Energy Partners to singularly focus on a 100% renewable energy strategy Key Steps of Plan Sell Gas • Sell natural gas pipeline assets Pipelines and Buy Out • Buy out STX Midstream, 2019 NEP CEPFs Pipelines and NEP Renewables II CEPFs Elimin
Slide 39: Plan eliminates three near-term CEPFs
NextEra Energy Partners’ plan would significantly simplify the capital structure by eliminating three near-term CEPFs Impact of Plan – Convertible Equity Financing Buyouts(1) ($ MM) Today Future ~$895 ~$418 ~$294 ~$294 ~$202 $0 $0 $0 2023 2024 2025 2026 2023 2024 2025 2026 Genesis Holdings Genesis H
Slide 40: Plan uses cash from suspended IDRs to replace CAFD
NextEra Energy Partners’ plan uses available cash from suspended IDRs to largely replace CAFD from sale of natural gas pipeline assets Impact of Plan – IDR Suspension • NextEra Energy and NextEra NEP Benefits Energy Partners agreed to suspend IDR fees through 2026 ✓ Avoid additional asset drops to a
Slide 41: Impact of Plan – Renewable Energy Content
Upon execution of the plan, NextEra Energy Partners would transition to a 100% pure-play renewable energy investment opportunity Impact of Plan – Renewable Energy Content Today(1) Future Natural Gas Pipelines 20% 100% Renewable Assets Renewable Assets 80% 1) Weighted on expected calendar year 2024 p
Slide 42: Benefits of Transition Plan
Executing on this plan will position NextEra Energy Partners to capitalize on the clean energy transition Benefits of Transition Plan 100% Market Renewable Leading Pure-Play Growth Rate Real Zero in 2025 Limited Simplified Need to Capital Access Structure Equity Market 42
Slide 43: Liquidity and Financial Flexibility
NextEra Energy Partners’ is well-positioned to execute against this plan and simplify its capital structure due to its strong balance sheet position Liquidity and Financial Flexibility • Revolving credit facility of Sources of Capital ~$2.5 B IPO - 2016 2017 - 2022 • Final funding of ~$180 MM from 2
Slide 44: NextEra Energy Partners' Financial Expectations
We continue to see 12-15% LP distribution growth through 2026, although in the current capital markets environment, expect to grow at or near the bottom end of that range NextEra Energy Partners’ Financial Expectations Annualized LP DPU(1) Year-End Portfolio Run-Rate(3) ($ MM) $5.11 - $2,220 - $2,42
Slide 45: NextEra Energy Partners' Value Proposition
NextEra Energy Partners presents a compelling investment opportunity with total return potential of 16% to 20% per year through at least 2026 NextEra Energy Partners’ Value Proposition Drill-down of S&P 1000 Companies Illustrative Investor Total & NextEra Energy Partners Return Potential ~1% 17% - 2
Slide 46: Appendix
Appendix NexTera’ Nexvera energy’ ENERGY PARTNERS
Slide 47: NextEra Energy
NEXTCra’ ENERGY &
Slide 48: NextEra Energy's credit metrics remain on track
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 49: Reconciliation of EPS to Adjusted EPS
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share(1) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016(2) 2017(2) 2018 2019 2020 2021 2022 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 0.82 $ 1.02 $ 0.99 $ 1.18 $
Slide 50: Reconciliation of GAAP Net Income to Adjusted Earnings (Q1 2023)
Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended March 31, 2023) Energy Corporate & NextEra (m illions, except per share am ounts) FPL Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc. $ 1,070 $
Slide 51: Reconciliation of GAAP Net Income to Adjusted Earnings (Q1 2022)
Reconciliation of GAAP Net Income (Loss) 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
Slide 52: 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 53: 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 54: 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 55: NextEra Energy Partners
NExTera energy’ PARTNERS La
Slide 56: Reconciliation of Net Income to Adjusted EBITDA and CAFD (2022)
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) 2022 Net Income $ 1,121 Add back: Depreciation and amortization 430 Interest expense (853) Income taxes 171 Tax credits 775 Amortization of intangible assets/liabilities - PPAs - net 143 Non-control
Slide 57: Reconciliation of Net Income to Adjusted EBITDA and CAFD (2015)
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) 2015 Net income $ 80 Add back: Depreciation and amortization 141 Interest expense 117 Income taxes 21 Tax credits 86 Benefits associated with differential membership interests (15) Adjustment for pr
Slide 58: NextEra Energy Partners' credit metrics remain on track
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% 19.6% >15% HoldCo Debt/EBITDA 5.0x - 6.0x 6.0x 4.5x <6.0x Ba1 Downgrade Actual Target Moody's (2) Range Threshold 20
Slide 59: NextEra Energy Partners' Expected Cash Available for Distribution
NextEra Energy Partners’ Expected Cash Available for Distribution(1) (December 31, 2023 Run-Rate CAFD; $ MM) $2,260 - $2,460 ($35 - $45) $0 $2,220 - $2,420 ($350 - $400) ($1,020 - $1,120) ($40 - $50) ($10 - $20) $770 - $860 Project-Level Corporate IDR Fees Adjusted Debt Service(2) Pre-Tax Non-Cash M
Slide 60: 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 61: 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 62: 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 63: 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