Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q2 2014 Earnings Presentation
39 slides from Nextera Energy's earnings presentation, Jul 29, 2014
Slide 1: Earnings Conference Call Second Quarter 2014
Earnings Conference Call Second Quarter 2014 July 29, 2014
Slide 2: Cautionary Statements And Risk Factors That May Affect Future Results
Cautionary Statements And Risk Factors That May Affect Future Results Any statements made herein about future operating and/or financial results and/or other future events are forward-looking statements under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These f
Slide 3: Strong quarter across all parts of the NextEra portfolio
Strong quarter across all parts of the NextEra portfolio Second Quarter 2014 Highlights • Successful launch of NextEra Energy Partners • FPL: – Port Everglades remains on track for mid-2016 – Recognized as most trusted utility in the nation by Cogent Reports – Announced proposal to invest in long-te
Slide 4: FPL delivered solid earnings growth during the quarter
FPL delivered solid earnings growth during the quarter Florida Power & Light Results – Second Quarter Net Income EPS ($ MM) $423 $391 $0.92 $0.96 2013 2014 2013 2014 4
Slide 5: FPL's EPS grew 4 cents versus Q2 2013
FPL’s EPS grew 4 cents versus Q2 2013, driven by continued investment in the business and wholesale operations Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) Second Quarter $B FPL – 2013 EPS $0.92 29.2 30 27.5 Drivers: 25 New Investments, incl clauses 0.04 2
Slide 6: Florida's economy continues to progress well
Florida’s economy continues to progress well Florida Economy Florida Unemployment & Labor Participation Rates(1) 12,000 Florida Building Permits(2) 12% 65% Labor 64% 10% Participation Rate 10,000 (Right Axis) May-14 63% 8% 8,000 62% 6% 61% 6,000 4% 60% 4,000 59% 2% 2,000 58% 0% 57% 0 Jan-07 Jan-08 J
Slide 7: FPL's retail sales volume is up from the second quarter last year
FPL’s retail sales volume is up from the second quarter last year Customer Characteristics (through June 2014) Retail kWh Sales Customer Growth(1,3) (Change vs. prior-year quarter) (Change vs. prior-year quarter) 100 91 80 Customer Growth & Mix 1.0% # of Customers 60 (000’s) + Usage Growth Due to We
Slide 8: FPL proposed an innovative plan to invest in natural gas supplies
FPL proposed an innovative plan to invest in natural gas supplies Natural Gas Supply Project • JV with PetroQuest • Up to 38 production wells in Woodford Shale region • Connected to existing natural gas transportation (1) • Capex estimated to begin at ~$70 MM, with potential growth up to ~$190 MM (2
Slide 9: Energy Resources' adjusted EPS declined primarily from unusual items
Energy Resources’ adjusted earnings per share declined primarily as a result of unusual items associated with establishing NEP Energy Resources Results(1) – Second Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $229 $0.54 $0.56 $238 $213 $0.48 $81 $0.18 2013 2014 2013 2014 2013 20
Slide 10: Energy Resources' core business delivered strong results
Energy Resources’ core business delivered strong results Energy Resources Second Quarter 2014 Adjusted EPS(1) Contribution Drivers $0.80 $0.07 ($0.05) $0.70 $0.06 ($0.06) $0.05 ($0.05) $0.60 $0.56 ($0.10) $0.50 $0.48 $0.40 $0.30 $0.20 $0.10 $0.00 Q2 2013 New Asset Sales Customer Existing Corporate,
Slide 11: NextEra Energy Partners' assets performed well
NextEra Energy Partners’ assets performed well NextEra Energy Partners Second Quarter 2014 Highlights • Initial public offering closed on July 1st – NEP was not operational during the second quarter – Presentation of results does not conform with expected format going forward • General highlights fo
Slide 12: Energy Resources executed well on major capital projects
Energy Resources executed well on major capital projects Energy Resources’ Highlights • Development backlog remains on track – Brought into service 13 MW of contracted U.S. solar • Continue to pursue incremental opportunities – Signed a new long term PPA for ~100 MW of U.S. wind – See potential for
Slide 13: NextEra Energy's adjusted EPS decreased 3 cents versus prior year
NextEra Energy’s adjusted earnings per share decreased 3 cents versus the prior year comparable quarter NextEra Energy EPS Summary(1) – Second Quarter GAAP 2013 2014 Change FPL $0.92 $0.96 $0.04 Energy Resources $0.54 $0.18 ($0.36) Corporate and Other ($0.02) ($0.02) $0.00 Total $1.44 $1.12 ($0.32)
Slide 14: NextEra Energy Adjusted Earnings Per Share Expectations
NextEra Energy Adjusted Earnings Per Share Expectations 2014 $5.15 - $5.35 $5.50 - $6.00 2016 (5% - 7% CAGR off a 2012 base) 14
Slide 15: NextEra Energy Partners Next Twelve Months Expectations
NextEra Energy Partners Next Twelve Months Expectations(1) Initial Portfolio EBITDA $245 - 255 MM CAFD $85 - 90 MM 15 (1) Twelve-month period ending June 30, 2015
Slide 16: Q&A Session
16 Q&A Session NeExTera’ ENERGY
Slide 17: Appendix
17 Appendix NeExTera’ ENERGY
Slide 18: NEX Tera
NEX Tera ENERGY &
Slide 19: Our current credit expectations are in line with the targets set in 2013
Our current credit expectations are in line with the targets we set out in 2013 2014 Credit Expectations 2014 Current (2) 2013 Actuals 2014 Target Expectations (1) S&P FFO / Debt 22.7% 25% 24% - 25% Debt / EBITDA(3) 3.5x 3.4x 3.2x - 3.3x Adj. Debt to Total Capital(3) 48.7% 48% 47% - 49% Moody's(1) C
Slide 20: Potential drivers of variability to consolidated adjusted EPS
Potential drivers of variability to consolidated adjusted EPS Balance of 2014 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) ± $0.01 - $0.02 • Wind resou
Slide 21: NextEra Energy Resources Projected 2014 Portfolio Financial Information
NextEra Energy Resources Projected 2014 Portfolio Financial Information (as of June 12, 2014) Equivalent Equivalent Equivalent 1 1 2 3 Expected Gross Margin % Gross EBITDA Remaining Following Generation Range Margin Range Contract Year PTC MW TWh $ MM Hedged $ MM Life Expiration Contracted Wind4,6 8
Slide 22: Energy Resources' existing assets are largely contracted or hedged for 2015
Energy Resources’ existing assets are largely contracted or hedged for 2015 2015 Equivalent Gross Margin Contributions(1) 2015 Portfolio Sensitivities • $1/MMBtu change in 15% New Investment(2) natural gas ≈ 5 - 6 cents in adjusted EPS(5) 13% 49% Other (3) Contracted Assets(4) (96% hedged) 23% Merch
Slide 23: NextEra Energy Resources Projected 2015 Portfolio Financial Information
NextEra Energy Resources Projected 2015 Portfolio Financial Information (as of June 12, 2014) Equivalent Equivalent Equivalent 1 1 2 3 Expected Gross Margin % Gross EBITDA Remaining Following Generation Range Margin Range Contract Year PTC MW TWh $ MM Hedged $ MM Life Expiration Contracted Wind4,6 8
Slide 24: Wind Production Index
Wind Production Index(1)(2) 2013 2014 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR Location 3 MW Apr May Jun QTR MW QTR MW QTR YTD MW QTR MW Apr May Jun QTR YTD Midwest 2,816 104% 107% 101% 104% 2,816 89% 3,066 97% 97% 3,141 116% 3,066 114% 99% 103% 106% 111% West 2,953 101% 97% 90% 96% 2,953 90% 2,730 9
Slide 25: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 3/31/14 $222.8 Amounts Realized During 2nd Quarter (11.1) Primary Drivers: Revenue Hedges – Gas Change in Forward Prices (all positions) (128.5) & Power Prices ($143.3) Subtotal – Income Statement
Slide 26: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) 1st Quarter 2nd Quarter Asset / Deals Asset / Deals Asset / (Liability) Change in Executed Total (Liability) Change in Executed Total (Liability) Balance Amounts Forward During Unrealized Balance Amounts Forward During Unrealized
Slide 27: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges(1) – Summary of Forward Maturity ($ millions, after-tax) Gain / (Loss) (2) Asset / (Liability) Balance Total Description 6/30/14 2014 2015 2016 2017 2018 - 2034 2014 - 2034 Natural gas related positions $ 154.6 $ (1.8) $ 17.7 $ (9.1) $ (10.3) $ (151.1) $ (154.6) Spark spread re
Slide 28: Energy Resources Anticipated Megawatts
Energy Resources Anticipated Megawatts(1) Operational Under contract, Under contract, Development, with as of expected in-service expected in-service potential in-service (2) (3) 12/31/13 2014 2015-2016 by 2016 Initial Portfolio 805 185 ROFO 576 302 671 Other Contracted: Renewables 7,457 1,144 497 ~
Slide 29: NextEra Energy Resources Portfolio Additions
NextEra Energy Resources Portfolio Additions(1) (2) March 2013 Investor Conference Backlog Incremental Opportunities Incl. in Incl. in U.S. Wind: MW COD Form 10-Q(3) U.S. Wind: MW COD Form 10-Q(3) Tuscola Bay II (4) 100.3 2013 Yes Tuscola Bay II(4) 100.3 2013 Yes Steele Flats(4) 74.8 2013 Yes Steele
Slide 30: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings to GAAP Net Income (Three Months Ended June 30, 2014) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 423 $ 81 $ (12) $ 492 Adjustments, net of income taxes: Net unrealized m
Slide 31: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings to GAAP Net Income (Three Months Ended June 30, 2013) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 391 $ 229 $ (10) $ 610 Adjustments, net of income taxes: Net unrealized
Slide 32: Definitional information
Definitional information NextEra Energy Resources, LLC. Adjusted Earnings NextEra Energy Resources’ adjusted earnings exclude the cumulative effect of adopting new accounting standards, the unrealized mark-to-market effect of non-qualifying hedges as well as the net other than temporary impairment l
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 (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) failure or breach of NextEra Energy's or FPL's information technology systems; risks to NextEra Energy and FPL's retail businesses from compromise of sensitive customer data; losses from volatility in the market values of d
Slide 35: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 36: NextEra Energy Partners IPO and ROFO Assets
NextEra Energy Partners IPO and ROFO Assets(1) Contract Contract (2) NEP IPO Portfolio: MW COD Expiration NEP ROFO Portfolio : MW COD Expiration Northern Colorado 22.5 Sept 2009 2029 Story II 150 Dec 2009 2030 151.8 Sept 2009 2034 Day County 99 Apr 2010 2040 Elk City Wind 98.9 Dec 2009 2030 Baldwin
Slide 37: Cautionary Statement And Risk Factors That May Affect Future Results
Cautionary Statement And Risk Factors That May Affect Future Results This news release 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 38: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) which face risks related to project siting, financing, construction, permitting, the environment, governmental approvals and the negotiation of project development agreements; NEP's ability to effectively consummate future
Slide 39: 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 available for distribution to or from NEP OpCo and from NEP to NEP's common unitholders, and the amo