Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (September 2012)
55 slides from Nextera Energy's investor presentation, Sep 19, 2012
Slide 1: September Investor Presentation
September Investor Presentation September 19-20, 2012
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: 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… • $28.4 B market capitalization(1) • 41,272 MW in operation • $60 B in total assets • One of the largest U.S. electric utilities • U.S. leader in renewable generation • 4.6 MM customer accounts • Assets in 23 states
Slide 4: Built on a foundation of operational excellence and financial strength
…built on a foundation of operational excellence and financial strength… SAIDI: System Average (1) Interruption Duration Index Utility Credit Ratings(2) Minutes 150 Good 30% 125 FL Industry Average 28% NextEra 100 Energy FPL 25% 23% 75 21% 50 20% 25 16% '06 '07 '08 '09 '10 '11 15% Fossil Reliability
Slide 5: One of the cleanest emissions profiles among top 50 power producers
…with one of the cleanest emissions profiles among the nation’s top 50 power producers… NextEra Energy 2011 Fuel Mix(1) SO2 Emissions Rates Hydro (MWh) (Lbs/MWh) 1.0% 9.0 Solar 0.3% Nuclear 22% Wind 6.0 13% Coal 6% NextEra 3.0 Energy Natural Gas Oil 1.0% 56% 0.0 NOx Emissions Rates CO2 Emissions Rat
Slide 6: Proven track record of building businesses and delivering growth
…and a proven track record of building businesses and delivering growth FPL Cumulative Capital Employed(1) Adjusted Earnings Per Share(2) $4.30 $4.39 $21.7 $4.05 $3.84 $19.5 $3.49 $17.7 $15.9 $3.04 $13.8 $14.8 $2.63 $11.6 $12.3 $2.41 $2.48 $2.49 $10.0 $10.8 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '0
Slide 7: Outperforming our industry over an extended period
Over an extended period of time, we have been successful in attaining our goal of outperforming our industry NextEra Energy Performance vs. Industry 10 Years Ending December 31, 2011 S&P 500 Utilities NextEra S&P 500 Index Energy Adjusted EPS (CAGR)(1) 8.0% 0.7% 6.3%(2) Dividend per Share (CAGR)(3)
Slide 8: Year-to-date, we have continued to outperform our industry
Year-to-date, we have continued to outperform our industry 2012 – YTD Total Shareholder Return 18% 16.0% 16% 14% 13.4% 12% 10% 8% 6% 4% 2.8% 2% 0% NextEra S&P 500 S&P 500 Energy Utilities Index 8 Source: FactSet; YTD information measured from December 31, 2011 to September 12, 2012.
Slide 9: FPL
PL...
Slide 10: We deliver excellent value to our customers
We deliver excellent value to our customers… FPL’s Customer Value Proposition Competitive, Award-Winning Clean Affordable Bills + Superior Reliability + Customer Service + Environmental Profile Florida Electric Utility Residential Bill Comparison of Average Typical Monthly Bills from January – March
Slide 11: Investing capital to keep bills low with industry-leading operational performance
…through investing capital to keep customer bills low while providing industry-leading operational performance FPL Customer Value Proposition ¢/kWh O&M ¢/kWh: 1996-2011 (1) Fossil Generation Fuel Efficiency 2.50 2.25 Industry Average (16%) 2.00 1.75 1.50 FPL 1.25 1.00 Frequency of Interruptions Regu
Slide 12: We are investing heavily to improve long-term customer value
We are investing heavily to improve long-term customer value FPL’s Capital Expenditures(1) $4.0 $3.0 $B $2.0 $1.0 $- 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E FPL’s Major Capital Projects Estimated Approx. Project Name Fuel Est. PSC In-Service Size (MW) Type Cost ($ B) Appr
Slide 13: Nuclear uprates at St. Lucie and Turkey Point nearing completion
Uprates at FPL’s St. Lucie and Turkey Point nuclear plants are nearing completion Nuclear Uprates • ~525 MW of uprates(1) • Total cost of project expected to be $2.95 - $3.15 B(2) • All carrying charges are recovered under the nuclear cost recovery rule - Annual filings with the Florida Public Servi
Slide 14: Cape Canaveral and Riviera Beach modernizations
The modernizations at Cape Canaveral and Riviera Beach will deliver greater efficiency and cost savings to our customers Modernizations of Cape Canaveral and Riviera Beach Plants Cape Riviera Canaveral Beach Capital Cost ($B) $1.0 $1.3 Installed Capacity (MW) 1,210 1,210 Modernized Cape Canaveral En
Slide 15: Port Everglades modernization
The Port Everglades modernization is expected to provide significant savings for customers while reducing emissions Port Everglades Modernization Capital Cost ($ B) $1.2 Installed Capacity (MW) 1,280 In-Service Date 2016 Current Port Everglades Plant Expected Net Customer $402 Benefits(1) ($MM) Mode
Slide 16: FPL base rate filing and technical hearing
FPL submitted its formal base rate filing in March and the technical hearing began on August 20th FPL Base Rate Request Summary • $516.5 MM base revenue increase effective January 2, 2013 • $173.9 MM step increase coinciding with COD of the Cape Canaveral modernization • $691 MM in total revenue req
Slide 17: Drivers of FPL's revenue request
More than 75% of the request is related to the removal of the surplus depreciation amortization credit and the Cape Canaveral modernization FPL’s Revenue Request – 2013 vs. 2012 $ MM $800 $174(2) (25%) $691 $700 $600 $70 $517(1) (10%) $80 $500 (12%) $367 $400 (53%) $300 $200 $100 $- Surplus Deprecia
Slide 18: Base rate request offset by fuel reductions
FPL’s base rate increase request is significantly offset by reductions in the fuel portion of the bill FPL Base Rate Request: Bill Impact(1) Base Portion of Bill Total Bill $100 $100 $94.62 $96.80 $90 $90 $80 $80 $70 $70 $60 $60 $52.99 $54.68 $52.06 $50 $44.95 $50 $40 $40 $30.89 $30 $26.60 $30 $20 $
Slide 19: FPL signed a settlement with four intervenors
FPL has signed a settlement with four intervenors FPL Base Rate Request Proposed Settlement • Main components of settlement – Effective January 2013 through December 2016 – $378 MM retail base revenue increase effective January 2013 – Allowed regulatory ROE of 10.7% midpoint with a 100 basis point b
Slide 20: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 21: Energy Resources strategy builds on core strengths
Our strategy at Energy Resources has always been to build around our core strengths, taking advantage of market opportunities Energy Resources Strategy Core Strengths Visible Growth Opportunities + Operational Excellence + Financial Strength Skills New Solar + Scale Nuclear Business (Seabrook) + Sco
Slide 22: Strong portfolio and track record of earnings growth
We have built a strong portfolio and a track record of earnings growth Energy Resources’ Growth – 2002 to 2011 2002 2011 Wind Capacity (MW) 1,745 8,569 Total Capacity (MW) 7,250 16,607 Total Assets ($ B) 6.4 23.5 Operating Revenues ($ MM) 829 4,502 Adjusted Earnings ($ MM)(1) 122 679 22 (1) See Appe
Slide 23: 2012 through 2014 challenged by headwinds
2012 through 2014 will continue to be challenged by headwinds… Natural Gas Prices(1) Production Tax Credit Roll-Off $/MMBtu $ MM $12 $40 $37 $35 $10 $35 $30 $26 $8 $25 $20 $16 $6 $15 $9 $9 $10 $4 $5 $2 $0 2009 2010 2011 2012E 2013E 2014E Lower natural gas prices hurt merchant The impact of wind proj
Slide 24: Largest backlog of renewable projects in our history
…but supported by the largest backlog of renewable projects in our history Wind and Solar Development • Majority of 2012 U.S. wind Estimated Cap Ex for Wind and Solar Projects through 2014(1) projects will come online in the fourth quarter $6.1 - $6.5 B • Wind and solar additions will drive earnings
Slide 25: Wind fleet of roughly 10,000 MW by year-end 2012
By year-end 2012, we expect Energy Resources to own and operate a wind fleet of roughly 10,000 MW Wind Development Update • We recently acquired a 165 MW Kansas wind farm – Expected COD November 2012 – Project has a signed 20-year PPA • We now expect to add ~1,500 MW of new U.S. wind in 2012 • We ad
Slide 26: Canadian wind and solar update
Renewables development in Canada is progressing as planned and continues to be a source of potential growth Canadian Wind and Solar Update • ~600 MW of Canadian wind under FIT contract – Expected COD of 2012 through 2015, with majority of projects coming into service in 2013 and 2014 • 40 MW of Cana
Slide 27: Genesis solar project
Genesis solar project has an approved long-term contract and the first unit is expected to come online in November 2013 Genesis Project Overview • 250 MW, solar thermal project comprised of two 125 MW units • The long-term power purchase agreement with Pacific Gas & Electric has been approved by CPU
Slide 28: Desert Sunlight project
Energy Resources’ Desert Sunlight project is progressing well and is on budget Desert Sunlight Project Overview • 550 MW solar PV project – Energy Resources owns 50% of the project • Energy Resources’ total invested capital estimated to be approximately $1.1 B – Plan to elect CITCs in 2013-2015 • PP
Slide 29: Spain Solar Project update
Construction is on schedule and on budget for Energy Resources’ Spain Solar Project Spain Solar Project Update • Transmission facilities complete and in service • Construction is roughly 98% and 82% complete on Unit 1 and Unit 2, respectively • Expected Commercial Operations Dates: Unit 1 • Unit 1 –
Slide 30: Market risk mitigated by significantly hedged position
Market risk will be mitigated by our significantly hedged position over the next several years Energy Resources Equivalent Gross Margin Contracted or Hedged(1) 97% 100% 100% 100% 100% 94% 89% 80% 60% 40% 20% 0% 2012 2013 2014 Existing Assets New Assets We remain focused on having a highly contracted
Slide 31: Lone Star Transmission
L®NEStar NESTA
Slide 32: Lone Star's CREZ line a regulated growth opportunity
Successful development of Lone Star’s CREZ line represents a significant regulated growth opportunity Lone Star Transmission CREZ Line • In January 2009, Lone Star was selected by Texas PUC as a CREZ(1) transmission service provider – ~320-mile line – ~$800 MM of rate base • Received approval for th
Slide 33: NextEra Energy
NExTera’ ENERGY @
Slide 34: Intensely focused on execution: critical success factors for 2012
We are intensely focused on execution Critical Success Factors for 2012 • At FPL: – Continue to deliver outstanding customer value – Continue execution on major capital projects – Achieve satisfactory outcome of base rate case • At Energy Resources: – Ensure solid execution in daily operations – Mov
Slide 35: Adjusted Earnings Per Share Expectations
Adjusted Earnings Per Share Expectations 2012 $4.35 - $4.65 2014 $5.05 - $5.65 NextEra Energy’s adjusted earnings expectations exclude the cumulative effect of adopting new accounting standards, the unrealized mark-to-market effect of non-qualifying hedges, and net other than temporary impairment lo
Slide 36: Investment opportunities drive adjusted EPS growth through 2014
NextEra Energy’s investment opportunities form the basis for our expected adjusted earnings per share growth through 2014 NextEra Energy Adjusted Earnings Per Share Growth Adj. EPS $6.00 $5.05 - $5.65 $5.00 $4.39 $4.00 $3.00 $2.38 $2.00 $1.00 $0.00 2001 2011 2014E Note: See Appendix for reconciliati
Slide 37: We will continue to strengthen our balance sheet
We will continue to strengthen our balance sheet Future Free Cash Flow Scenarios “Backlog Only” Scenario Alternate Scenario • Additional attractive 2011(1) 2014 investment opportunities are Cash from identified $4.1 B $5.0 - $5.5 B Operations Less: Cash to $6.5 B $3.5 - $4.0 B • Reduced free cash fl
Slide 38: Business mix shifting to more regulated and contracted
NextEra Energy’s business mix is expected to shift to a more regulated and long-term contracted business by 2014 Adjusted EBITDA(1) from Adjusted Earnings from Regulated and Long-Term Regulated Businesses Contracted Operations 100% 100% 84% 78% 80% 80% 65% 58% 60% 60% 40% 40% 20% 20% 0% 0% 2011 2014
Slide 39: Dividend policy reflects increasing regulated and contracted contribution
NextEra Energy’s current dividend policy reflects its expected increase in the proportionate contribution from its rate- regulated businesses and long-term contracted assets Dividends Per Share(1) Historic Dividend Per Share Growth Dividend Policy • Expected increase in the proportion (2) $2.40 of N
Slide 40: Consistent strategy, implementation adjusts to external conditions
Our strategy will be consistent, but implementation will adjust to external conditions NextEra Energy Long-Term Strategy • We will continue our focus on providing clean energy, keeping costs low, and maintaining our record of excellent execution • Our balance sheet will continue to be a source of co
Slide 41: Potential areas of growth – FPL
Our focus will be on selectively pursuing opportunities to successfully grow the company Potential Areas of Growth – FPL • Market driven growth – Favorable demographics – Incremental capital expenditures that deliver customer benefits • Infrastructure improvement • Gas pipeline • Renewables • Servic
Slide 42: Potential areas of growth – Energy Resources and Transmission
Our focus will be on selectively pursuing opportunities to successfully grow the company Potential Areas of Growth – Energy Resources • U.S. and Canadian wind • U.S. solar • Renewable asset acquisitions • Gas infrastructure • Optimization of non-renewable competitive generation assets Potential Area
Slide 43: Closing Summary
Closing Summary • A solid foundation – Operational excellence – Financial strength – Clean emissions profile • Proven track record of success – Building businesses – Delivering growth – Creating shareholder value • Visible growth prospects 43
Slide 44: NextEra Energy
NExTera’ ENERGY @
Slide 45: Appendix
N Gone ENERGY & = Appendix
Slide 46: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net Income $791 $479 $903 $896 $901 $1,281 $1,312 $1,639 $1,615 $1,957 $1,923 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses asso
Slide 47: Reconciliation of Adjusted EPS to Earnings Per Share
NextEra Energy, Inc. Reconciliation of Adjusted Earnings Per Share to Earnings Per Share 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Earnings Per Share (assuming dilution) $2.34 $1.38 $2.53 $2.48 $2.34 $3.23 $3.27 $4.07 $3.97 $4.74 $4.59 Adjustments: Net unrealized mark-to-market (gains)
Slide 48: NextEra Energy Resources Reconciliation of Adjusted Earnings to Net Income
NextEra Energy Resources, LLC Reconciliation of Adjusted Earnings to Net Income ($ millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net Income (Loss) $81 ($173) $192 $148 $146 $540 $461 $831 $759 $980 $774 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses
Slide 49: Reconciliation of Adjusted Earnings to GAAP Net Income (Six Months 2011)
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Six Months Ended June 30, 2011) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 506 $ 304 $ 38 $ 848 Adjustments, net of income taxes: Net unrealized m
Slide 50: Reconciliation of Adjusted Earnings to GAAP Net Income (Six Months 2012)
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Six Months Ended June 30, 2012) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 592 $ 472 $ 4 $ 1,068 Adjustments, net of income taxes: Net unrealized
Slide 51: 2011 Sources and Uses of Cash
Reconciliation of Adjusted to GAAP 2011 Sources and Uses of Cash (Full Year Ended December 31, 2011) USES SOURCES Limited Commercial Recourse FPL Differential Paper, Cash to Common Total Cash From Project Mortgage Membership Corporate Cash, & Total Investing Dividends Uses Operations Debt (net) Bond
Slide 52: Reconciliation of 2011 Adjusted EBITDA to EBITDA
Reconciliation of 2011 Adjusted Earnings Before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA) to EBITDA (Full-Year Ended December 31, 2011) GAAP Adjustments Adjusted (1) Net income $1,923 ($86) $1,837 Add back interest 1,034 0 1,034 (1) Add back income taxes 529 (57) 472 Add back d
Slide 53: 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 54: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) failure or breach of NextEra Energy's and FPL's information technology systems; risks to NextEra Energy and FPL's retail businesses of compromise of sensitive customer data; risks to NextEra Energy and FPL of volatility in
Slide 55: NextEra Energy
NExTera’ ENERGY @
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