Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q1 2017 Earnings Presentation
40 slides from Nextera Energy's earnings presentation, Apr 21, 2017
Slide 1: Earnings Conference Call First Quarter 2017
Earnings Conference Call First Quarter 2017 April 21, 2017
Slide 2: Cautionary Statements And Risk Factors That May Affect Future Results
Cautionary Statements And Risk Factors That May Affect Future Results This presentation includes 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 and NextEra Energy Partners each achieved solid financial results in the first quarter
NextEra Energy and NextEra Energy Partners each achieved solid financial results in the first quarter First Quarter 2017 Highlights • NEE grew adjusted EPS ~10% from the prior-year comparable quarter • FPL: – Regulatory capital growth of 9.7% year-over-year – Major capital initiatives on track – Ann
Slide 4: FPL's EPS grew 10 cents from the prior-year comparable quarter
FPL’s EPS grew 10 cents from the prior-year comparable quarter Florida Power & Light Results – First Quarter Net Income EPS ($ MM) $445 $0.95 $0.85 $393 2016 2017 2016 2017 4
Slide 5: The primary driver of FPL's earnings growth was continued investment in the business
The primary driver of FPL’s earnings growth was continued investment in the business Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) First $B Quarter 40.0 $36.2 $33.0 FPL – 2016 EPS $0.85 35.0 Drivers: 30.0 25.0 New Investments $0.09 20.0 Share dilution and o
Slide 6: Florida's economy remains strong driving continued customer growth
Florida’s economy remains strong driving continued customer growth Customer Characteristics & Florida Economy Retail kWh Sales Customer Growth(1,2) (Change vs. prior-year quarter) (Change vs. prior-year quarter) Rolling 12 100 Q1 months 80 ~65 Customer Growth & Mix +0.8% +1.2% UKU Impact + Usage Cha
Slide 7: Florida Power & Light Development Highlights
We continue to execute well on our key initiatives, while identifying smart investments to deliver on our customer value proposition Florida Power & Light Development Highlights • Major capital initiatives remain on track – Okeechobee Clean Energy Center remains on budget and on schedule – Continued
Slide 8: Energy Resources' adjusted EPS increased 15% from the comparable prior-year quarter
Energy Resources’ adjusted EPS increased 15% from the comparable prior-year quarter Energy Resources Results(1) – First Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $476 $1.01 $357 $0.76 $306 $0.66 $224 $0.48 2016 2017 2016 2017 2016 2017 2016 2017 8 (1) Attributable to NEE, see
Slide 9: Energy Resources' adjusted EPS growth was driven by contributions from new investments
Energy Resources’ adjusted EPS growth was driven by contributions from new investments Energy Resources First Quarter Adjusted EPS(1) Contribution Drivers $1.10 $0.35 ($0.01) ($0.11) $1.00 ($0.04) $0.90 ($0.09) $0.80 $0.76 $0.70 $0.66 $0.60 $0.50 $0.31 Renewables $0.04 Gas pipelines $0.40 $0.30 $0.2
Slide 10: Outstanding opportunity set for new renewables growth
We continue to have an outstanding opportunity set for new renewables growth Energy Resources Development Program(1) • Announcing 621 MW of renewables projects added to backlog – Includes 545 MW of new wind and solar projects for delivery post–2018 • Additional 1,028 MW of project sales not included
Slide 11: NextEra Energy Partners – First Quarter Drivers
NEP delivered first quarter results in line with expectations, driven by portfolio growth over the last year NextEra Energy Partners – First Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $200 $60 $36 ($2) ($8) $3 $170 $180 ($2) $12 ($8) $50 $160 $141 $140 $38 $40 $40 $120 $100 $30 $80 $20 $6
Slide 12: NextEra Energy Partners – Portfolio Addition
We continue to execute on our plan to expand NextEra Energy Partners’ portfolio NextEra Energy Partners – Portfolio Addition • Acquisition of Golden West Wind Energy Center from Energy Resources expected to close in May – ~250 MW wind project located in El Paso County, Colorado – ~23.5 year remainin
Slide 13: NextEra Energy EPS Summary – First Quarter
NextEra Energy’s adjusted earnings per share increased ~10% versus the prior-year comparable quarter NextEra Energy EPS Summary(1) – First Quarter GAAP 2016(2) 2017 Change FPL $0.85 $0.95 $0.10 Energy Resources $0.48 $1.01 $0.53 Corporate and Other $0.08 $1.41 $1.33 Total $1.41 $3.37 $1.96 Adjusted
Slide 14: NextEra Energy's Adjusted Earnings Per Share Expectations
NextEra Energy’s Adjusted Earnings Per Share Expectations(1) 2017 $6.35 - $6.85 2018 $6.80 - $7.30 2020 6% - 8% CAGR off a 2016 base 14 (1) See Appendix for definition of Adjusted Earnings expectations
Slide 15: NextEra Energy Partners' Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners’ Adjusted EBITDA and CAFD Expectations(1) Adjusted EBITDA CAFD 12/31/17 Run Rate(2) $875 - $975 MM $310 - $340 MM Unit Distributions $1.58 - $1.62 annualized rate by 2017(3) year end 2016 – 2022(4) 12% - 15% average annual growth (1) See Appendix for definition of Adjusted EB
Slide 16: Q&A Session
Q&A Session NExTera’ NexTera energy” ENERGY & PARTNERS 2 16
Slide 17: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS 2 17
Slide 18: NExTera’
NExTera’ ENERGY @
Slide 19: NextEra Energy's credit metrics remain on track
NextEra Energy’s credit metrics remain on track Credit Metrics Actual Actual Actual Target S&P A- Range 2014 2015 2016 2017 FFO/Debt 23%-35% 25% 26% 27% 26% Debt/EBITDA 2.5x-3.5x 3.5x 3.3x 3.1x 3.1x Actual Actual Actual Target Moody’s Baa Range 2014 2015 2016 2017 CFO Pre-WC/Debt 13%-22% 21% 21% 21%
Slide 20: Potential drivers of variability to consolidated adjusted EPS
Potential drivers of variability to consolidated adjusted EPS Balance of 2017 Potential Sources of Variability(1) Florida Power & Light • Wholesale (primarily volume) ± $0.01 - $0.02 • Timing of investment ± $0.02 - $0.04 NextEra Energy Resources • Natural gas prices (± $1/MMBtu change) ± $0.01 - $0
Slide 21: NextEra Energy Resources Projected 2017 Portfolio Financial Information
NextEra Energy Resources Projected 2017 Portfolio Financial Information (1) Adjusted Value of pre-tax tax Remaining EBITDA by Asset credits included in Debt Maintenance Pre-Tax Cash Contract Category(2) adjusted EBITDA(3) Service (4) Capital(5) Other(6) Flows(7) Life (8) NEER Contracted(9) Renewable
Slide 22: Wind Production Index
Wind Production Index(1)(2) 2016 2017 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR Location MW Jan Feb Mar QTR MW QTR MW QTR MW QTR YTD MW Jan Feb Mar QTR Midwest 3,066 91% 100% 95% 95% 3,054 102% 3,054 96% 3,039 106% 100% 3,039 90% 112% 104% 101% West 2,720 86% 111% 109% 102% 2,718 93% 2,718 105% 3,117
Slide 23: 2017-2018 Contracted Renewables Development Program
2017-2018 Contracted Renewables Development Program(1) Wind Location MW Solar Location MW Oliver III ND 99 Whitney Point CA 20 Huron MI 150 Marshall MN 62 Golden Hills North CA 46 Stuttgart AR 81 Bluff Point IN 120 Westside CA 20 Eight Point NY 102 Distributed Generation Various 90 Dodge County MN 2
Slide 24: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 12/31/16 $595.7 Amounts Realized During 1st Quarter 4.0 Primary Drivers: Revenue Hedges – Change in Forward Prices (all positions) 104.9 Power, Gas & Oil Prices $160.7 Subtotal – Income Statement 1
Slide 25: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges – Summary of Activity ($ millions) (1) Includes NextEra Energy’s share of contracts at consolidated subsidiaries and equity method investees (2) Includes consolidating tax adjustments 25 (3) Removal of the hedge mark to market and settlements related to asset sales
Slide 26: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges – Summary of Forward Maturity ($ millions) (1) Gain / (Loss) Asset / (Liability) Balance Total Description 3/31/17 2017 2018 2019 2020 2021 - 2047 2017 - 2047 Pretax gross amounts Generation related: Natural gas related positions $ 958.8 $ (165.6) $ (129.8) $ (114.3) $ (102.6)
Slide 27: Reconciliation of Adjusted Earnings to GAAP Net Income (Q1 2017)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended March 31, 2017) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Incom e Attributable to NextEra Energy, Inc. $ 445
Slide 28: Reconciliation of Adjusted Earnings to GAAP Net Income (Q1 2016)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended March 31, 2016) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other (1) Inc. Net Incom e Attributable to NextEra Energy, Inc. $
Slide 29: Reconciliation of Adjusted Operating Cash Flow to GAAP Operating Cash Flow
Reconciliation of NextEra Energy, Inc. Adjusted Operating Cash Flow to GAAP Operating Cash Flow Actual Q1 Actual Q1 (millions) 2016 2017 Inc/(Dec) Grow th Cash flow s from operating activities $ 1,545 $ 1,364 $ (181) (11.7%) FPL Clause recoveries (124) (16) Acquisition of Indiantow n purchased pow e
Slide 30: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings Expectations This presentation refers to adjusted earnings per share expectations. Adjusted earnings expectations exclude the unrealized mark- to-market effect of non-qualifying hedges, net OTTI losses on securities held in NextEra Ener
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 and FPL's risk management tools associated with their hedging and trading pr
Slide 33: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 34: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q1 2017 Net income $ 42 Add back: Depreciation and amortization 46 Interest expense 43 Income taxes 8 Tax credits 47 Benefits associated with differential membership interests (19) Post-acquisition
Slide 35: Expected Cash Available for Distribution
Expected Cash Available for Distribution(1) (December 31, 2017 Run Rate CAFD) $960-$1,060 ($15-$25) ($60-$70) $875-$975 ($290-$320) ($240-$280) $ MM ($30-$35) ($3-$8) $310-$340 Project-Level Corporate IDR Fees Adjusted Debt (2) Pre-Tax Tax Non-Cash Maintenance Estimated (4) (5) Adjusted Expenses EBI
Slide 36: 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 37: 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 38: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP's renewable energy projects may be adversely affected by legislative changes or a failure to comply with applicable energy regulations; A change in the jurisdictional characterization of some of the Texas pipeline entit
Slide 39: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP faces substantial competition primarily from regulated utilities, developers, independent power producers, pension funds and private equity funds for opportunities in North America; The natural gas pipeline industry is
Slide 40: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Reimbursements and fees owed to NEP GP and its affiliates for services provided to NEP or on NEP's behalf will reduce cash distributions to or from NEP OpCo and from NEP to NEP's unitholders, and the amount and timing of su