Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q1 2015 Earnings Presentation
42 slides from Nextera Energy's earnings presentation, Apr 29, 2015
Slide 1: Earnings Conference Call First Quarter 2015
Earnings Conference Call First Quarter 2015 April 29, 2015
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: Strong first quarter performance for both NEE and NEP
Strong first quarter performance for both NEE and NEP First Quarter 2015 Highlights • NEE achieved adjusted EPS growth of 12% over the prior-year comparable quarter – Energy Resources adjusted EPS grew 21% – FPL contribution increased modestly; underlying core business results were strong • Continue
Slide 4: FPL's first quarter EPS increased modestly year-over-year
FPL’s first quarter EPS increased modestly year-over-year Florida Power & Light Results – First Quarter Net Income EPS ($ MM) $347 $359 $0.79 $0.80 2014 2015 2014 2015 4
Slide 5: Continued investment in the business was the principal driver of growth
Continued investment in the business was the principal driver of growth Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) First Quarter $B FPL – 2014 EPS $0.79 35 $28.8 $30.3 Drivers: 30 3.7 3.7 25 New Investments $0.05 20 Wholesale operations $0.01 15 10 Share
Slide 6: We continue to execute well on our excellent opportunity set
We continue to execute well on our excellent opportunity set Florida Power & Light Highlights • Port Everglades on budget and on track for mid-2016 • Closed on the Woodford Project portion of gas reserves petition in the first quarter – We expect further PSC activity on the proposed guidelines in th
Slide 7: Florida's economy is growing at a healthy pace
Florida’s economy is growing at a healthy pace Florida Economy Florida Unemployment(1) Florida Building Permits(2) 12% 12,000 10% 10,000 Mar-15 8% 8,000 Mar-15 6% 6,000 4% 4,000 2% 2,000 0% 0 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan
Slide 8: Good customer growth at FPL was somewhat offset by underlying usage
Good customer growth at FPL was somewhat offset by underlying usage Customer Characteristics (through March 2015) Retail kWh Sales Customer Growth(1,3) (Change vs. prior-year quarter) (Change vs. prior-year quarter) 100 80 66 Customer Growth & Mix 1.4% UKU Impact # of 60 Customers + Usage Growth Due
Slide 9: Energy Resources' adjusted EPS increased 10 cents versus first quarter 2014
Energy Resources’ adjusted EPS increased 10 cents versus first quarter 2014 Energy Resources Results(1) – First Quarter GAAP Adjusted Net Income(2) EPS(2) Net Income EPS ($ MM) ($ MM) $278 $0.62 $260 $0.58 $211 $0.48 $86 $0.20 2014 2015 2014 2015 2014 2015 2014 2015 (1) See Appendix for reconciliati
Slide 10: Strong rebound in customer supply largely offset by poor wind resource
Strong rebound in customer supply was largely offset by poor wind resource; new investments drove core growth Energy Resources First Quarter Adjusted EPS(1) Contribution Drivers $0.09 $0.02 ($0.17) $0.80 $0.70 $0.20 ($0.04) $0.60 $0.58 $0.50 $0.48 Wind Resource ($0.17) Q1 2015: 87 % of normal $0.40
Slide 11: Energy Resources' adjusted EBITDA and cash flow from operations increased
Energy Resources’ adjusted EBITDA and cash flow from operations increased versus first quarter 2014 Adjusted Cash Flow from EBITDA(1) Operations $ MM $ MM 1,000 $935 250 900 $215 800 $776 200 700 $151 600 150 500 400 100 300 200 50 100 0 0 Q1 2014 Q1 2015 Q1 2014 Q1 2015 (1) See Appendix for definit
Slide 12: Energy Resources team delivered another outstanding period of renewables origination
The Energy Resources’ team delivered another outstanding period of renewables origination Energy Resources Highlights(1) COD & Additional Additional Current 2015-2016 2017-2018 2015 – 2018 Backlog(2) Forecast Forecast U.S. Wind 1,180 900 – 1,100 750 – 850 Canadian Wind 174 -- -- U.S. Solar 1,262 --
Slide 13: NEP delivered results in line with expectations
NEP delivered results in line with expectations NextEra Energy Partners – First Quarter Financial Results(1,2) Highlights ($ MM) • Solid first quarter results 80 $70 – Timing impact of debt service payments consistent with 60 expectations – Before accounting for debt service, 40 available cash was ~
Slide 14: We continue to execute on our plan to expand NextEra Energy Partners' portfolio
We continue to execute on our plan to expand NextEra Energy Partners’ portfolio NextEra Energy Partners – Portfolio Additions • Additional acquisitions from sponsor expected to close in May Contract Project Resource MW COD Expiration Ashtabula III Wind 62.4 2010 2038 Baldwin Wind 102.4 2010 2041 Mam
Slide 15: NextEra Energy's adjusted earnings per share increased 15 cents
NextEra Energy’s adjusted earnings per share increased 15 cents versus the prior year comparable quarter NextEra Energy EPS Summary(1) – First Quarter GAAP 2014 2015(2) Change FPL $0.79 $0.80 $0.01 Energy Resources $0.20 $0.62 $0.42 Corporate and Other ($0.01) $0.03 $0.04 Total $0.98 $1.45 $0.47 Adj
Slide 16: NextEra Energy Adjusted Earnings Per Share Expectations
NextEra Energy Adjusted Earnings Per Share Expectations(1) 2015 $5.40 - $5.70 2016 $5.75 - $6.25 Long-Term 5% to 7% CAGR through Growth Rate 2018 off of a 2014 base (1) See Appendix for definition of Adjusted Earnings expectations 16
Slide 17: NextEra Energy Partners Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners Adjusted EBITDA and CAFD Expectations(1) Adjusted EBITDA CAFD (2) 2015 $400 - $440 MM $100 - $120 MM (2) 2016 $580 - $620 MM $170 - $190 MM Unit Distributions 2015 ~$1.13 annualized rate by year end 2016 - 2020 12% - 15% average annual growth (1) See Appendix for non-GAAP rec
Slide 18: Q&A Session
Q&A Session NExTera’ NexTera energy” ENERGY & PARTNERS Z 18
Slide 19: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z 19
Slide 20: NEX Tera
NEX Tera ENERGY &
Slide 21: Our current credit expectations are on track and continue to improve
Our current credit expectations are on track and continue to improve Credit Expectations Actual Projected Projected S&P A- Range 2014 2015 2016 FFO/Debt 23%-35% 25% 26% 26% Debt/EBITDA(1) 2.5x-3.5x 3.5x 3.4x 3.4x Actual Projected Projected Moody’s Baa Range 2014 2015 2016 CFO Pre-WC/Debt 13%-22% 21%
Slide 22: Potential drivers of variability to consolidated adjusted EPS
Potential drivers of variability to consolidated adjusted EPS Balance of 2015 Potential Sources of Variability(1) Florida Power & Light • Wholesale (primarily volume) ± $0.01 • Timing of investment ± $0.01 NextEra Energy Resources • Natural gas prices (± $1/MMBtu change) ± $0.04 - $0.05 • Wind resou
Slide 23: NextEra Energy Resources Projected 2015 Portfolio Financial Information
NextEra Energy Resources Projected 2015 Portfolio Financial Information (As of March 9, 2015) ($MM) Value of pre-tax tax Adjusted credits included in Debt Maintenance Pre-Tax Cash Remaining 1 2 3 4 5 6 7 MW EBITDA adjusted EBITDA Service Capital Other Flows Contract Life NEP Initial Portfolio 990 $2
Slide 24: NextEra Energy Resources Projected 2016 Portfolio Financial Information
NextEra Energy Resources Projected 2016 Portfolio Financial Information (As of March 9, 2015) ($MM) Value of pre-tax tax Adjusted credits included in Debt Maintenance Pre-Tax Cash Remaining 1 2 3 4 5 6 7 MW EBITDA adjusted EBITDA Service Capital Other Flows Contract Life NEP Initial Portfolio 990 $2
Slide 25: Wind Production Index
Wind Production Index(1)(2) 2014 2015 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR Location MW Jan Feb Mar QTR MW QTR MW QTR MW QTR YTD MW Jan Feb Mar QTR Midwest 3,141 127% 111% 106% 115% 3,066 106% 3,066 91% 3,066 103% 105% 3,066 102% 99% 103% 101% West 2,730 100% 97% 102% 100% 2,730 105% 2,730 91% 2,9
Slide 26: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Non-Qualifying Hedges(1) – Summary of Activity ($ MM, after-tax) Asset/(Liability) Balance as of 12/31/14 $517.5 Amounts Realized During 1st Quarter (70.1) Primary Drivers: Change in Forward Prices (all positions) 92.3 Revenue He
Slide 27: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ MM, after-tax) 1st Quarter Asset / Deals Asset / (Liability) Change in Executed Total (Liability) Balance Amounts Forward During Unrealized Balance Description 12/31/14 Realized Prices Period (2) MTM 3/31/15 Generation Related: Natural gas related po
Slide 28: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges(1) – Summary of Forward Maturity ($ MM, after-tax) Gain / (Loss) (2) Asset / (Liability) Balance Total Description 3/31/15 2015 2016 2017 2018 2019 - 2034 2015 - 2034 Generation Related: Natural gas related positions $ 406.0 $ (60.6) $ (57.4) $ (47.0) $ (36.7) $ (204.3) $ (406.
Slide 29: 2015-2018 Contracted Renewables Development Program
2015-2018 Contracted Renewables Development Program(1,2) Wind Location MW(2) COD Solar Location MW(2) COD Golden Hills CA 83 2015 McCoy Solar CA 250 2016 Golden West CO 249 2015 Blythe CA 110 2016 Carousel CO 150 2015 Adelanto I & II CA 27 2015 Cedar Bluff KS 199 2015 Shafter CA 20 2015 Dickinson ND
Slide 30: Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc.
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended March 31, 2015) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc
Slide 31: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings to GAAP Net Income (Three Months Ended March 31, 2014) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Incom e (Loss) $ 347 $ 86 $ (3) $ 430 Adjustments, net of income taxes: Net unrealized
Slide 32: 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 33: 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 34: Cautionary Statement And Risk Factors That May Affect Future Results (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) threats of terrorism and catastrophic events that could result from terrorism, cyber attacks or other attempts to disrupt NextEra Energy's business or the businesses of third parties; inability to obtain adequate insurance
Slide 35: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 36: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q1 2015 Net income $ 9 Add back: Depreciation and amortization 23 Interest expense 23 Income taxes 1 CITC amortization 5 Production tax credits 8 Other 1 Adjusted EBITDA $ 70 CITC amortization (5) P
Slide 37: Reconciliation of Income Before Taxes to Adjusted EBITDA and CAFD
Reconciliation of Income Before Taxes to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) 2015E 2016E Income before income taxes $70 - $100 $155 - $185 Add back: Depreciation and amortization 130 - 150 190 - 210 Interest expense 120 - 140 160 - 180 Tax equity - interest income (
Slide 38: NextEra Energy Partners Portfolio Information
NextEra Energy Partners Portfolio Information(1) Contract Contract (2) NEP Portfolio Type MW COD Expiration NEP ROFO Portfolio : Type MW COD Expiration Northern Colorado Wind 22.5 Sept 2009 2029 Story II Wind 150 Dec 2009 2030 Northern Colorado Wind 151.8 Sept 2009 2034 Day County Wind 99 Apr 2010 2
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 That May Affect Future Results (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP is subject to risks associated with litigation or administrative proceedings that could materially impact its operations, including future proceedings related to projects it subsequently acquires; the Summerhaven, Cones
Slide 41: Cautionary Statement And Risk Factors That May Affect Future Results (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP's subsidiaries’ substantial amount of indebtedness may adversely affect NEP's ability to operate its business and its failure to comply with the terms of its subsidiaries’ indebtedness could have a material adverse effe
Slide 42: Cautionary Statement And Risk Factors That May Affect Future Results (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP GP’s interest in NEP and the control of NEP GP may be transferred to a third party without unitholder consent; the IDR fee may be transferred to a third party without unitholder consent; NEP may issue additional units w