Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (February 2017)
49 slides from Nextera Energy's investor presentation, February 2017
Slide 1: February 2017 Investor Presentation
February 2017 Investor Presentation
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: Table of Contents
Table of Contents • NextEra Energy, Inc. Overview (NYSE: NEE) Slide 4 • Florida Power & Light Slide 10 • NextEra Energy Resources Slide 15 • NextEra Energy Partners, LP (NYSE: NEP) Slide 22 • Financial Review Slide 29 • Appendix Slide 33 3
Slide 4: NextEra Energy is comprised of two strong businesses supported by a common platform
NextEra Energy is comprised of two strong businesses supported by a common platform • $58 B market capitalization(1) • 46 GW in operation(2,3) • $90 B in total assets(3) • Partnership with • One of the largest electric • The world leader in utilities in the nation by electricity generated from retai
Slide 5: Built on a foundation of best-in-class operational excellence and financial strength
Built on a foundation of best-in-class operational excellence and financial strength, and focused on clean generation Cost and Reliability Generation Profile 2015 Utility & Corporate Benchmarks 2016 NextEra Energy Fuel Mix MWhs(3) Nuclear Wind Industry ~$23 FL Avg ~133 Good 26% 20% FPL ~$14 FPL ~61
Slide 6: We have a long-term track record of delivering value to shareholders
We have a long-term track record of delivering value to shareholders Adjusted Earnings Per Share(1) Total Shareholder Return(2) $6.19 20% 18% 60% 53% $5.71 16% $5.30 50% $4.97 43% $4.39 $4.57 15% $3.84 $4.05 $4.30 12% 40% $3.49 29% $3.04 10% 30% $2.63 20% 5% 10% 0% 0% '05 '06 '07 '08 '09 '10 '11 '12
Slide 7: Proposed transactions with EFH, TTHC and OMI to own 100% of Oncor
NextEra Energy has announced proposed transactions with EFH, TTHC and OMI that would result in NextEra Energy owning 100% of Oncor Oncor US Bankruptcy Court and PUCT Estimated Timeline January/ September 19, October 31, February February 14, February 21, April 29, 2016 2016 2017 2017 2017 2017 US Fi
Slide 8: Our growth strategy has led to real change in relative position
Over a sustained period of time, our growth strategy has led to real change in relative position Top 20 Global Utility Equity Market Capitalization(1) As of 6/1/2001 ($ MM) As of 1/31/2017 ($ MM) Rank Market Cap Rank Market Cap 1 $38,574 1 $57,810 NextEra Energy 2 $38,185 2 $54,114 3 $34,476 3 $48,4
Slide 9: NextEra Energy: Partnership with NEP
We believe the strength of NextEra Energy (NEE) makes it the premier YieldCo sponsor in the sector NextEra Energy: Partnership with NEP • Characteristics of a premier sponsor: NEE – Scale, financial strength and experience – Strong development track record – Incentives properly aligned with Yiel
Slide 10: Florida Power & Light
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Slide 11: Florida Power & Light is one of the best utility franchises in the U.S.
Florida Power & Light is one of the best utility franchises in the U.S. Florida Power & Light • One of the largest U.S. electric utilities • Vertically integrated, retail rate-regulated • ~4.9 MM customer accounts • ~26 GW in operation • $10.9 B in operating revenues • $45.5 B in total assets Note:
Slide 12: Our core focus at FPL has been consistent for many years
Our core focus at FPL has been consistent for many years Areas of Focus • Unyielding commitment to Superior Customer Value Delivery customer value proposition • Focus on efficiency and Strong Financial Virtuous Circle Customer best-in-class cost Position Satisfaction performance Constructive • One o
Slide 13: Our value delivery is founded on a low cost position and best-in-class operations
Our value delivery is founded on a low cost position and best- in-class operations Operational Cost Effectiveness(1) $100.00 Good Adjusted Regressed Top Decile $/Retail MWh Log/Log FPL ~$14 $10.00 1,000,000 10,000,000 100,000,000 1,000,000,000 Retail MWh (1) FERC Form 1, 2015. Excludes pensions and
Slide 14: FPL's settlement agreement is designed to help deliver continued outstanding customer value
FPL’s settlement agreement is designed to help deliver continued outstanding customer value FPL’s Base Rate Case Settlement • Effective January 2017 through December 2020 • Retail base revenue increases according to the following schedule: – $400 MM beginning January 2017 – $211 MM beginning January
Slide 15: NextEra Energy Resources
NEXTeCra’ ENERGY &% RESOURCES _
Slide 16: Energy Resources is a diversified clean energy company
Energy Resources is a diversified clean energy company whose skills and assets are well aligned to drive growth Energy Resources Skills and Capabilities Generation Portfolio(1) • Largest, most successful developer of renewables in North America – Consistent strategy to build, own and operate environ
Slide 17: Energy Resources' growth is driven by its best-in-class development skills
Energy Resources’ growth is driven by its best-in-class development skills NextEra Energy Resources Development Skills Wind and Solar Portfolio(1) 20,000 Customer Wind Relationships 15,000 Engineering/ MW Solar Construction Regulatory 10,000 Management 5,000 0 2002 2004 2006 2008 2010 2012 2014 2016
Slide 18: Outstanding opportunity set for new renewables growth
We continue to have an outstanding opportunity set for new renewables growth Energy Resources Development Program(1) • Delivered ~2.5 GW of wind and solar projects in 2016 • Added ~3.5 GW of renewables projects to backlog over the last year – Includes repowering opportunities for ~1,600 MW of existi
Slide 19: Renewables development opportunities have never been stronger
Energy Resources’ renewables development opportunities have never been stronger Drivers for Renewables • Extension and phase down of U.S. Federal Tax incentives for renewables • Improvements in wind and solar technology and declining cost trends • Evaluating repowering opportunities across our fleet
Slide 20: U.S. Federal tax incentives for renewables extended into the next decade
U.S. Federal tax incentives for completed renewables projects have been extended into the next decade Extended U.S. Federal Tax Credits Wind Production Solar Investment Tax Credit (PTC) Tax Credit (ITC) Start of Start of Construction COD Wind Construction Solar Date Deadline PTC Date ITC During 2016
Slide 21: Expanding into the gas pipeline business
We have leveraged our skills and capabilities from gas infrastructure activities to expand into the gas pipeline business Gas Pipeline Assets Sabal Trail and Florida Mountain Valley Pipeline Texas Pipelines(1) Southeast Connection • Energy Resources expects • Energy Resources expects • NEP completed
Slide 22: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 23: NEP is focused on investing in clean energy assets with stable cash flows
NextEra Energy Partners (NEP) is focused on investing in clean energy assets with stable cash flows NEP Overview • NEP is a growth-oriented partnership formed by NextEra Energy, Inc. (NEE) to: – Acquire contracted clean energy projects with stable, long-term cash flows from NEE and the market – Take
Slide 24: The NEP portfolio is diversified by geography and asset mix
The NEP portfolio is diversified by geography and asset mix NEP Asset Portfolio(1,2) • Wind assets: – 17 projects – ~2,346 MW • Solar assets: – 5 projects – ~442 MW • Pipeline assets: – Seven natural gas pipelines – ~3 Bcf of contracted and ~4 Bcf total capacity (1) Consolidated projects as of Decem
Slide 25: We believe NEP is a premier distribution growth company
We believe NEP is a premier distribution growth company NEP Investment Highlights High-Quality Portfolio Financial Strength and Flexibility ~2.8 GW 18-Yr A3 Renewables >90% <2.0x ~1.2x Capacity(3) of Project Debt Remaining Counterparty HoldCo Coverage & Tax Equity Contract Life(1) Credit(1,2) ~4 Bcf
Slide 26: Accretive acquisitions have supported significant growth in CAFD and distributions
Accretive acquisitions funded by access to both equity and debt have supported significant growth in cash available for distribution (CAFD) and LP distributions NEP Portfolio Asset Type Mix(1) Project Concentration(2) (% of Assets in Portfolio) 19% 7% 48% 20% 17% 23% 50% 52% 58% 77% 30% IPO Current
Slide 27: Structural modification to IDR fees
NextEra Energy and NextEra Energy Partners announced a structural modification to IDR fees NEP IDR Fee Modification • Based on NEP’s fourth quarter 2016 distribution to current LP unitholders at an annualized rate of $1.41(1) per unit, IDR fees are roughly $56 million per year • From this point forw
Slide 28: The modification is centered on value creation
The modification is centered on value creation, and is expected to benefit both NEP and NEE Strategic Rationale of NEP IDR Fee Modification Expected Benefits to NEP Expected Benefits to NEE • More cash available to • Potential increased value in NEP’s LP unitholders NEE’s investment in NEP • Fewer a
Slide 29: Financial Review
Financial Review NExTera’ NexTera energy” ENERGY & PARTNERS Z 29
Slide 30: 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 (1) See Appendix for definition of Adjusted Earnings expectations 30
Slide 31: NextEra Energy Partners' Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners’ Adjusted EBITDA and CAFD Expectations(1) Adjusted EBITDA CAFD 12/31/16 Run Rate(2) $670 - $760 MM $230 - $290 MM 12/31/17 Run Rate(3) $875 - $975 MM $310 - $340 MM (1) See Appendix for definition of Adjusted EBITDA and CAFD expectations (2) Reflects calendar year 2017 expect
Slide 32: NEP to grow LP distributions by 12-15% annually through 2022
Our current expectations are for NEP to grow LP distributions by 12 – 15% annually through at least 2022 NextEra Energy Partners’ Long-Term Distribution per Unit Growth Expectations(1) Annual 12% - 15% Growth(2) $1.58-$1.62 $1.41 Q4 2016 Q4 2017E Q4 2022E (1) Represents expected fourth quarter annua
Slide 33: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS 2 33
Slide 34: NextEra Energy
NExTera’ ENERGY @
Slide 35: Contracted Renewables Development Program
Contracted Renewables Development Program(1,2) Wind Location MW COD Solar Location MW COD Breckinridge OK 98 2015 Shafter CA 20 2015 Goshen Ontario 102 2015 Adelanto I & II CA 27 2015 East Durham Ontario 22 2015 McCoy Solar CA 250 2016 Cedar Point JV Ontario 50 2015 Blythe CA 110 2016 Golden Hills C
Slide 36: 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 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $ 2.34 $ 3.23 $ 3.27 $ 4.07 $ 3.97 $ 4.74 $ 4.59 $ 4.56 $ 4
Slide 37: 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 38: 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 39: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) inability or failure by NextEra Energy Resources to manage properly or hedge effectively the commodity risk within its portfolio; potential volatility of NextEra Energy's results of operations caused by sales of power on th
Slide 40: Forward Looking Statements
Forward Looking Statements Forward-looking statements also include, but are not limited to, statements about the anticipated benefits of the proposed transactions involving NEE, EFH, TTHC, OMI and Oncor, including future financial or operating results of NEE or Oncor, NEE’s, EFH’s or Oncor’s plans,
Slide 41: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 42: Expected Cash Available for Distribution (2016 Run Rate)
Expected Cash Available for Distribution(1) (December 31, 2016 Run Rate CAFD) $750-$840 ($10-$20) ($50-$60) $670-$760 ($250-$270)(2) ($155-$205)(3) $ MM ($25-$30)(4) ($3-$8) $230-$290(5) Project-Level Corporate IDR Fees Adjusted Debt Service Pre-Tax Tax Non-Cash Maintenance Estimated Adjusted Expens
Slide 43: Expected Cash Available for Distribution (2017 Run Rate)
Expected Cash Available for Distribution(1) (December 31, 2017 Run Rate CAFD) $960-$1,060 ($15-$25) ($60-$70) $875-$975 ($290-$320)(2) ($240-$280)(3) $ MM ($30-$35)(4) ($3-$8) $310-$340(5) Project-Level Corporate IDR Fees Adjusted Debt Service Pre-Tax Tax Non-Cash Maintenance Estimated Adjusted Expe
Slide 44: NEP's tax shield creates the need to employ tax equity financing
NEP’s tax shield creates the need to employ tax equity financing for projects that generate a large portion of their economics from tax credits PAYGO Tax Equity Financing • Tax equity financing is used Project Cash Flow Split(1) to monetize tax attributes • Under tax equity, an investor 8%-12% makes
Slide 45: 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 46: 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 47: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP may incur significant costs and liabilities as a result of pipeline integrity management program testing and any necessary pipeline repair or preventative or remedial measures; The Texas pipelines’ operations could incu
Slide 48: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Acquisitions of existing clean energy projects involve numerous risks; Renewable energy procurement is subject to U.S. state and Canadian provincial regulations, with relatively irregular, infrequent and often competitive p
Slide 49: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Holders of NEP's common units have limited voting rights and are not entitled to elect NEP's general partner or NEP GP’s directors; NEP's partnership agreement restricts the remedies available to holders of NEP's common uni
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