Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q4 2021 Earnings Presentation
52 slides from Nextera Energy's earnings presentation, Jan 25, 2022
Slide 1: Earnings Conference Call Fourth Quarter and Full Year 2021
Earnings Conference Call Fourth Quarter and Full Year 2021 January 25, 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 had an outstanding year and continued its long track record
NextEra Energy had an outstanding year and continued its long track record of delivering superior results NextEra Energy 2021 Highlights Total Shareholder Return(1) 150% 300% • Achieved adjusted EPS of $2.55, 125% 129% 250% 252% up over 10% from prior year 100% 100% 200% • Deployed ~$16 B in capital
Slide 4: Florida Power & Light successfully executed on its strategic initiatives in 2021
Florida Power & Light successfully executed on its strategic initiatives in 2021 Florida Power & Light Highlights • Net income growth of nearly 11% versus the prior year at FPL • Reached fair and balanced outcome in 2021 base rate case – FPL’s typical residential bill projected to be the lowest amon
Slide 5: NextEra Energy Resources had a record year of origination in 2021
NextEra Energy Resources performed well financially and operationally and had a record year of origination in 2021 NextEra Energy Resources Highlights • Achieved 13% year-over-year growth in adjusted earnings • Record year of origination, adding a net ~7,200 MW to backlog – ~20% CAGR in new backlog
Slide 6: We are increasing and extending our financial expectations
We are increasing and extending our financial expectations based on the strength and diversity of our growth prospects Long-Term Outlook for NextEra Energy • Settlement agreement at Florida Power & Light supports continued smart investments in reliability and clean energy for the benefit of our cust
Slide 7: NextEra Energy Partners delivered on its commitments in 2021
NextEra Energy Partners delivered on its commitments and had a terrific year of execution in 2021 NextEra Energy Partners 2021 Highlights • Realized total unitholder return of ~30% in 2021 • Grew distributions per unit by 15% from prior year • Achieved year-end run-rate adjusted EBITDA and cash avai
Slide 8: FPL's full-year contribution to EPS increased 14 cents
FPL’s full-year contribution to EPS increased 14 cents FPL Results Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $560 $0.28 $1.49 $2,935 $502 $0.25 $1.35 $2,650 2020 2021 2020 2021 2020 2021 2020 2021 8
Slide 9: 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) Fourth Full Quarter Year $B FPL – 2020 EPS $0.25 $1.35 $50.0 $44.7 Drivers: $40.3 $40.0 New investments $0.03 $0.12 $30.0 Other, including share dilutio
Slide 10: Gulf Power's full-year contribution to EPS increased 2 cents
Gulf Power’s full-year contribution to EPS increased 2 cents from the prior year period Gulf Power Results Financial Results Regulatory Capital Employed(1) 4th Quarter Full Year (Excluding Accumulated Deferred Income Taxes) 2020 2021 2020 2021 GAAP $B $5.0 $4.7 Net Income ($ MM) $53 $60 $238 $271 $4
Slide 11: Gulf Power: low cost, reliable and clean at the same time
Our performance at Gulf Power highlights that it is possible to be low cost, reliable and clean at the same time Gulf Power Three-Year Execution Summary Operational Service Cost Effectiveness(1) Reliability(2) ($/Retail MWh) (Minutes) ~$32 ~101 Good Good ~40% ~$20 ~60% Reduction Improvement ~43 2018
Slide 12: The Florida economy remains strong
The Florida economy remains strong Florida Economy Florida Unemployment & Labor Participation Rates(1) Florida GDP(2) 16% 64% $1,600 14% 62% 12% 60% $1,200 10% 58% 8% Labor 56% $800 Participation 6% Rate 54% (Right Axis) 4% 52% $400 2% 50% 0% 48% $0 1/12 1/13 1/14 1/15 1/16 1/17 1/18 1/19 1/20 1/21
Slide 13: FPL and Gulf Power had continued strong customer growth
FPL and Gulf Power had continued strong customer growth Customer Characteristics FPL Retail kWh Sales FPL Customer Growth(1,2) (Change vs. prior-year period) (Change vs. prior-year quarter) 100 Fourth Full 81.7 Vero Impact Quarter Year 80 # of UKU Customer Growth & Mix 0.5% 0.2% 60 Customers Impact
Slide 14: Energy Resources' full year adjusted EPS increased ~13%
Energy Resources’ full year adjusted EPS increased ~13% over the prior year Energy Resources Results(1) Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $851 $0.43 $599 GAAP: $531 $0.27 $0.30 ($644) ($0.33) 2020 2021 2020 2021 2020 2021 2020 2021 $414 $0.21 $1.12 Adjusted: $2,206
Slide 15: Energy Resources' growth driven by new investments
Energy Resources’ growth was primarily driven by contributions from new investments Energy Resources Full Year 2021 Adjusted EPS(1) Contribution Drivers $1.20 $0.04 $1.12 $0.12 ($0.04) $0.01 $0.02 ($0.02) $0.99 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 2020 New Existing NEET Gas Customer Other 2021 Adjust
Slide 16: Energy Resources had a record year of origination success
Energy Resources had a record year of origination success Energy Resources Development Program(1) • ~7,200 net MW of renewables and storage added to backlog – Includes ~1,500 MW added since the third quarter call • Nearly 25% year-over-year growth in backlog of signed contracts 2021 – 2022 2023 – 20
Slide 17: NextEra Energy EPS Summary
NextEra Energy’s adjusted earnings per share increased more than 10% year-over-year NextEra Energy EPS Summary Fourth Quarter EPS Full Year EPS GAAP 2020 2021 Change GAAP 2020 2021 Change FPL $0.25 $0.28 $0.03 FPL $1.35 $1.49 $0.14 Gulf Power $0.03 $0.03 $0.00 Gulf Power $0.12 $0.14 $0.02 Energy Res
Slide 18: Raising expectations for 2022 and 2023, extending growth to 2025
We are raising expectations for 2022 and 2023 and extending our expectations for roughly 6% to 8% growth out to 2025 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 - $3.33 increased 2022 adjusted EPS $2.93 - $3.
Slide 19: NextEra Energy Partners' full year results driven by new projects
NextEra Energy Partners’ strong full year results driven primarily by contributions from new projects NextEra Energy Partners – Full Year Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $1,600 $700 $115 $11 ($24) ($5) $1,360 $38 ($40) $1,400 $600 $570 ($24) $40 $584 $1,263 $1,200 $500 $1,000 $400 $800
Slide 20: 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 12/31/21 Revised Run-Rate(1) $1,635 – $1,795 MM $640 – $720 MM 12/31/22 Run-Rate(2) $1,775 – $1,975 MM $675 – $765 MM Unit
Slide 21: Q&A Session
21 Qé&A Session
Slide 22: Appendix
Appendix 22
Slide 23: NextEra Energy
NEXTe@ra ENERGY &%
Slide 24: 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% 21.4% >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% 17.6% >17% CFO-Div/
Slide 25: Potential drivers of variability to adjusted EPS
Potential drivers of variability to consolidated NextEra Energy adjusted EPS 2022 Potential Sources of Variability(1) Florida Power & Light • Wholesale (primarily volume)(2) ± $0.005 • Timing of investment ± $0.01 - $0.015 NextEra Energy Resources • Wind resource(3) (± 1% deviation) ± $0.01 - $0.015
Slide 26: Energy Resources' 2021 Adjusted EBITDA by Asset Category
Energy Resources’ 2021 Adjusted EBITDA by Asset Category(1,2) 2021 Expectations as of Q4 2020(3) 2021 Actuals Comment NEER Existing Assets Contracted Renewables $3,375 - $3,775 $ 3,242 Wind resource and ERCOT weather event Contracted Nuclear $680 - $780 812 Favorable returns in the decommissioning t
Slide 27: Energy Resources Projected 2022 Portfolio Financial Information
NextEra Energy Resources Projected 2022 Portfolio Financial Information(1) (includes NEER’s share of NEP assets) Value of pre-tax tax Adjusted credits included in Pre-Tax Cash Remaining EBITDA(2) adjusted EBITDA(3) Debt Service(4) Other(5) Flows(6) Contract Life(7) NEER New Investment(8) $350 - $600
Slide 28: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1)(2) 2020 2021 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR Location MW Oct Nov Dec QTR YE MW QTR MW QTR MW QTR MW Oct Nov Dec QTR YE Midwest 4,004 100% 113% 93% 102% 97% 4,406 91% 4,307 93% 4,307 99% 4,438 95% 104% 103% 101% 96% West 3,285 104% 99% 104% 102% 102%
Slide 29: Contracted Wind and Solar Development Program
Contracted Wind and Solar Development Program(1) Wind Location MW Solar Location MW Solar Location MW 2021: 2021: 2023 – 2024: Borderlands NM 100 Point Beach WI 100 Proxima CA 50 Niyol CO 206 New England Various 126 Chariot NH 50 White Mesa TX 501 Quitman II GA 150 Florida FL 373 Sky River CA 60 Coo
Slide 30: Energy Storage Development Program
Energy Storage Development Program(1) Duration Duration Project Location MW Project Location MW (hours) (hours) 2021: 2023 – 2024: Cool Springs GA 40 2.0 Proxima CA 5 4.0 Wilmot AZ 30 4.0 Sonoran AZ 260 4.0 Blythe 110 CA 63 4.0 CT DEEP CT 3 2.0 Blythe II CA 115 4.0 Paulsell CA 20 3.0 Blythe III CA 1
Slide 31: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 9/30/21 ($2,259) Primary Drivers: Amounts Realized During 4th Quarter 316 Electricity related Change in Forward Prices (all positions) (160) positions ($195) Subtotal – Income Statement 156 Interes
Slide 32: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions) 4th Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance (2) Description 9/30/21 Realized Prices (Loss) Other 12/31/21 Pretax Amounts Gross Electricity related positions $ 17 $ (13) $ (1
Slide 33: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges – Summary of Forward Maturity ($ millions) Gain / (Loss)(1) Asset / (Liability) Balance Total Description 12/31/21 2022 2023 2024 2025 2026 - 2050 2022 - 2050 Pretax amounts at share Electricity related positions $ (191) $ 25 $ 66 $ 59 $ 37 $ 4 $ 191 Gas Infrastructure related
Slide 34: Reconciliation of GAAP Net Income to Adjusted Earnings (Q4 2021)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended December 31, 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
Slide 35: Reconciliation of GAAP Net Income to Adjusted Earnings (Q4 2020)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended December 31, 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 36: Reconciliation of GAAP Net Income to Adjusted Earnings (FY 2021)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Twelve Months Ended December 31, 2021) Florida Pow er Gulf Energy Corporate & NextEra (m illions, except per share am ounts) & Light Pow er Resources Other Energy, Inc. Net Incom e (Loss) Attributable to Nex
Slide 37: Reconciliation of GAAP Net Income to Adjusted Earnings (FY 2020)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Twelve Months Ended December 31, 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 38: Reconciliation of GAAP EPS to Adjusted EPS 2011-2021
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. 2011 2021 CAGR Earnings Per Share (assuming dilution) Attributable to NextEra Energy, Inc. $ 1.15 $ 1.81 4.6% Adjustments - pretax: Net losses (gains) associated with non-qualifying hedges (0.19) 1.04 Change
Slide 39: 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 40: 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 41: 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 42: NextEra Energy Partners
NeExTera energy’ PARTNERS Z
Slide 43: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income (Loss) to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q4 2021 Q4 2020 2021 2020 Net income (loss) $ (39) $ 161 $ 424 $ (238) Add back: Depreciation and amortization 81 71 288 271 Interest expense 97 (111) (47) 620 Income taxes (6) 19 48 (19) Tax
Slide 44: Reconciliation of Net Income to CAFD
Reconciliation of Net Income to Cash Available for Distribution (CAFD) (millions) 2018 2021 CAGR Net income $ 267 $ 424 16.7% Add back: Depreciation and amortization 203 288 Interest expense 248 (47) Income taxes 6 48 Tax credits 271 544 Gain on disposal of Canadian Holdings and related foreign curr
Slide 45: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1)(2) 2020 2021 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR Location MW Oct Nov Dec QTR YE MW QTR MW QTR MW QTR MW Oct Nov Dec QTR YE Midwest 1,213 100% 114% 97% 104% 99% 1,213 92% 1,213 93% 1,213 101% 1,512 95% 100% 100% 98% 96% West 1,104 110% 98% 102% 103
Slide 46: NextEra Energy Partners' credit metrics remain on track
NextEra Energy Partners’ credit metrics remain on track Credit Metrics BB Downgrade Actual Target (1) S&P 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 47: Expected CAFD (December 31, 2021 Run-Rate)
NextEra Energy Partners’ Expected Cash Available for Distribution(1) (December 31, 2021 Run-Rate CAFD; $ MM) $1,795-$1,975 ($20-$30) ($140-$150) $1,635-$1,795 ($90-$95) ($135-$175) ($690-$770) ($40-$45) ($10-$20) $640-$720 Project-Level Corporate IDR Fees Adjusted HoldCo Debt Project Debt Pre-Tax Ta
Slide 48: Expected CAFD (December 31, 2022 Run-Rate)
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 (2) Project-Level Corporate IDR Fees Adjusted EBITDA Debt Service Pre-Tax Tax Non-Cash M
Slide 49: 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 50: 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 51: 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 52: 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