Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q2 2022 Earnings Presentation
41 slides from Nextera Energy's earnings presentation, Jul 22, 2022
Slide 1: Earnings Conference Call Second Quarter 2022
Earnings Conference Call Second Quarter 2022 July 22, 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 second quarter results
NextEra Energy delivered strong second quarter results NextEra Energy Second Quarter 2022 Highlights • NEE grew adjusted EPS by ~14% year-over-year • FPL – EPS increased by 5 cents year-over-year, driven by the more than 11% growth in regulatory capital employed – Continued focus on smart capital in
Slide 4: FPL Results – Second Quarter
FPL’s earnings per share increased ~11% from the prior-year comparable quarter FPL Results – Second Quarter Net Income EPS ($ MM) $0.50 $989 $882 $0.45 2021 2022 2021 2022 4
Slide 5: Continued investment in the business 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 60.0 $54.4 FPL – 2021 EPS $0.45 $48.8 50.0 Drivers: 40.0 New investments $0.05 30.0 FPL – 2022 EPS $0.50 20.0 10.0 0.0 Q2 2021 Q2 2022
Slide 6: Florida Economy & Customer Characteristics
Florida’s economy remains healthy and FPL’s retail sales continue to show strong underlying growth Florida Economy & Customer Characteristics Retail kWh Sales Customer Growth(1,2) (Change vs. prior-year quarter) (Change vs. prior-year quarter) Second 120 UKU Vero Impact Quarter Impact 100 87.5 Custo
Slide 7: Energy Resources Results – Second Quarter
Energy Resources’ adjusted EPS increased over 20% from the prior-year comparable quarter Energy Resources Results(1) – Second Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $133 $0.07 $683 $0.35 $574 $0.29 ($315) ($0.16) 2021 2022 2021 2022 2021 2022 2021 2022 7 1) Attributable to
Slide 8: Energy Resources Second Quarter Adjusted EPS Contribution Drivers
Energy Resources’ growth was primarily driven by strong performance in existing generation and storage Energy Resources Second Quarter Adjusted EPS(1) Contribution Drivers $0.40 $0.01 $0.35 $0.35 $0.02 $0.03 $0.30 $0.29 $0.00 $0.25 $0.20 $0.15 $0.10 $0.05 $0.00 Q2 2021 New Existing Customer Other Q2
Slide 9: Energy Resources Development Program
Energy Resources had another strong quarter of origination success Energy Resources Development Program(1) • ~2,035 net MW of renewables and storage added to backlog – Includes ~815 net MW of new wind, ~1,200 net MW of solar, and ~20 net MW of battery storage 2022 - 2023 2022 - 2023 2024 - 2025 2024
Slide 10: NextEra Energy EPS Summary – Second Quarter
NextEra Energy’s adjusted earnings per share grew ~14% versus the prior-year comparable quarter NextEra Energy EPS Summary – Second Quarter GAAP 2021 2022 Change FPL $0.45 $0.50 $0.05 Energy Resources ($0.16) $0.07 $0.23 Corporate and Other ($0.16) $0.13 $0.29 Total $0.13 $0.70 $0.57 Adjusted 2021 2
Slide 11: NextEra Energy's Financial Expectations
We remain well positioned to continue our strong adjusted EPS and dividends per share growth NextEra Energy’s Financial Expectations(1) • Reflects ~10% compound annual growth from 2021 to the $3.45 - high-end of the 2025 adjusted $3.23 - $3.70 EPS expectations range $3.43 $2.98 - $3.13 • From 2021 t
Slide 12: NextEra Energy Partners Second Quarter 2022 Highlights
NextEra Energy Partners performed well and continued to execute on its long-term growth objectives NextEra Energy Partners Second Quarter 2022 Highlights • Strong second quarter operational and financial performance – Adj. EBITDA and CAFD up ~43% and 37%, respectively, year-over-year • NEP Board dec
Slide 13: NextEra Energy Partners – Second Quarter Drivers
NextEra Energy Partners’ adjusted EBITDA and CAFD growth were driven primarily by contributions from new projects NextEra Energy Partners – Second Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $600 $250 $51 ($7) $26 ($7) ($4) $500 $207 $500 $106 $41 $200 $400 $350 $151 $150 $300 $100 $200 $5
Slide 14: NextEra Energy Partners' Financial Expectations
NextEra Energy Partners remains well-positioned to deliver on its long-term growth objectives NextEra Energy Partners’ Financial Expectations Annualized LP DPU(1) YE 2022 Portfolio Run-Rate(3) ($ MM) $4.45 - $4.95 $1,785 - $1,985 $3.98 - $4.30 $3.55 - $3.74 $3.17 - $3.25 $2.83 $685 - $775 2021 2022E
Slide 15: NEXT aie
NEXT aie ENERGY & NeExTera energy’ PARTNERS Z
Slide 16: Q&A Session
Qé&A Session NExTera’ NexTera energy” ENERGY & PARTNERS Z% — 16
Slide 17: Appendix
Appendix NExTera’ NexTera energy” ENERGY PARTNERS Z% — 17
Slide 18: NEXTe@ra
NEXTe@ra ENERGY &%
Slide 19: 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 2021(1) 2022 FFO/Debt 13% - 23% 20% 21.9% >20% Debt/EBITDA 3.5x - 4.5x 4.0x <4.5x Baa Downgrade Actual Target Moody’s Range Threshold 2021(1) 2022 CFO Pre-WC/Debt 13% - 22% 17
Slide 20: Potential drivers of variability to consolidated adjusted EPS
Potential drivers of variability to consolidated NextEra Energy adjusted EPS Balance of 2022 Potential Sources of Variability(1) FPL • Timing of investment ± $0.005 - $0.01 NextEra Energy Resources • Wind resource(2) (± 1% deviation) ± $0.005 - $0.01 • Interest rates (± 100 bps shift in yield curve)
Slide 21: 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 - $600
Slide 22: Energy Resources Wind Production Index
Energy Resources Wind Production Index(1,2) 2021 2022 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR Location MW Apr May Jun QTR MW QTR MW QTR YE MW QTR MW Apr May Jun QTR YTD Midwest 4,107 98% 93% 88% 93% 4,107 99% 4,240 101% 96% 5,037 114% 5,037 122% 108% 104% 113% 113% West 3,583 103% 101% 100% 101% 3,7
Slide 23: Energy Resources Renewables Development Program
Energy Resources Renewables Development Program(1,2) Wind 2022-2023 2024-2025 Northeast 111 - Southeast - - Midwest 591 459 Texas 3,531 465 West 632 651 Total 4,865 1,575 Solar 2022-2023 2024-2025 Northeast 152 940 Southeast 783 2,083 Midwest 990 1,605 Texas 400 1,185 West 1,835 230 Total 4,160 6,04
Slide 24: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 3/31/22 ($3,227) Primary Drivers: Amounts Realized During 2nd Quarter 209 Gas Infrastructure Change in Forward Prices (all positions) (142) hedges ($511) Subtotal – Income Statement 67 Electricity
Slide 25: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions) 2nd Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance Description 3/31/22 Realized Prices (Loss) 6/30/22 Pretax amounts at share Electricity related positions $ (699) $ (37) $ (511) $
Slide 26: 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 6/30/22 2022 2023 2024 2025 2026 - 2050 2022 - 2050 Pretax amounts at share Electricity related positions $ (1,247) $ (183) $ 226 $ 235 $ 199 $ 770 $ 1,247 Gas Infr
Slide 27: Reconciliation of GAAP Net Income to Adjusted Earnings (Q2 2022)
Reconciliation of GAAP Net Income to Adjusted Earnings Attributable to NextEra Energy, Inc. (Three Months Ended June 30, 2022) Energy Corporate & NextEra (m illions, except per share am ounts) FPL Resources Other Energy, Inc. Net Incom e Attributable to NextEra Energy, Inc. $ 989 $ 133 $ 258 $ 1,380
Slide 28: 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) Energy Corporate & NextEra (m illions, except per share am ounts) FPL Resources Other Energy, Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc. $ 882 $ (315) $ (3
Slide 29: Reconciliation of Earnings Per Share to Adjusted Earnings Per Share
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 30: 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 31: 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 32: 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 33: NeExTera energy’
NeExTera energy’ PARTNERS Z
Slide 34: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income (Loss) to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q2 2022 Q2 2021 Net income (loss) $ 538 $ (202) Add back: Depreciation and amortization 105 69 Interest expense (414) 336 Income taxes 83 (22) Tax credits 214 134 Amortization of intangible a
Slide 35: NextEra Energy Partners Wind Production Index
NextEra Energy Partners Wind Production Index(1)(2) 2021 2022 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 95% 92% 92% 93% 1,213 101% 1,512 98% 96% 1,512 115% 1,512 119% 109% 101% 110% 113% West 1,104 101% 97% 91% 97
Slide 36: 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 2021(4) YE 2022 FFO/Debt 12% - 20% 12% 18.1% >15% HoldCo Debt/EBITDA 5.0x - 6.0x 6.0x 5.4x <6.0x Ba1 Downgrade Actual Target Moody's (2) Range Threshold 20
Slide 37: 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) ($157) $1,785 - $1,985 ($270 - $330) ($755 - $855) ($40 - $45) ($5 - $15) $685 - $775 Project-Level Corporate IDR Fees Adjusted Debt Service(2) Pre-Tax Non-Cash Ma
Slide 38: 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 39: 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 40: 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 41: 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