Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — FY2014 Earnings Presentation
45 slides from Nextera Energy's earnings presentation, Jan 27, 2015
Slide 1: Earnings Conference Call Fourth Quarter and Full Year 2014
Earnings Conference Call Fourth Quarter and Full Year 2014 January 27, 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 under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from such forward-looking statements. The facto
Slide 3: NextEra Energy had an outstanding year
NextEra Energy had an outstanding year 2014 Highlights • Adjusted EPS grew 6.6% – Including negative 15 cents per share attributable to NEP launch • Cash flow from operations grew 7.8% – Maintained very strong credit position • Excellent progress on major capital initiatives, including: – (FPL) Rivi
Slide 4: FPL delivered year-over-year EPS growth in the fourth quarter and full year
FPL delivered year-over-year EPS growth of 8 cents in the fourth quarter and 29 cents for the full year Florida Power & Light Results Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) $286 $0.65 $1,517 $3.45 $248 $0.57 $1,349 $3.16 2013 2014 2013 2014 2013 2014 2013 2014 4
Slide 5: FPL's earnings growth was primarily driven by investments in the business
FPL’s earnings growth was primarily driven by investments in the business and an increase in wholesale operations Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) Fourth Full Quarter Year $B FPL – 2013 EPS $0.57 $3.16 35 $29.3 30 $27.7 Drivers: 25 New investme
Slide 6: Florida's economy continued to improve in 2014
Florida’s economy continued to improve in 2014 Florida Economy Florida Unemployment & Florida Case-Shiller Annual Change(2) 12% Labor Participation Rates(1) 65% 20% Oct-14 Labor 64% 15% 10% Participation Rate 10% (Right Axis) 63% 8% 5% 62% 0% 6% 61% -5% 60% -10% 4% -15% 59% 2% -20% 58% -25% 0% 57% -
Slide 7: FPL's full year retail sales increased in 2014
FPL’s full year retail sales increased in 2014 Customer Characteristics (through December 2014) Retail kWh Sales Customer Growth(1,3) (Change vs. prior-year period) (Change vs. prior-year quarter) Fourth Full 100 68 Quarter Year 80 UKU Impact Customer Growth & Mix 1.4% 1.2% # of 60 Customers (000’s)
Slide 8: Energy Resources' 2014 adjusted EPS increased over the prior year
Energy Resources’ 2014 adjusted EPS increased 6 cents over the prior year Energy Resources Results Fourth Quarter Full Year Net Income EPS Net Income EPS ($ MM) ($ MM) GAAP: $985 $2.24 $614 $1.39 $556 $1.30 $85 $0.20 2013 2014 2013 2014 2013 2014 2013 2014 Adjusted: $178 $0.40 $0.40 $833 $1.89 Inclu
Slide 9: Energy Resources' adjusted EPS growth driven by contracted renewables
Energy Resources’ adjusted EPS growth was largely driven by growth in its contracted renewables portfolio Energy Resources Full Year 2014 Adjusted EPS(1) Contribution Drivers $2.50 0.04 0.01 (0.04) (0.06) 0.29 0.06 (0.09) (0.15) $2.00 $1.83 $1.89 $1.50 $1.00 $0.50 $0.00 2013 New Existing Customer As
Slide 10: Energy Resources adjusted EBITDA and cash flow from operations increased
Energy Resources adjusted EBITDA and cash flow from operations increased in 2014 Adjusted Cash Flow from EBITDA(1) Operations $ MM $ MM 4,000 2,000 3,800 1,900 $1,856 3,600 1,800 3,400 $3,271 1,700 3,200 1,600 3,000 $2,916 1,500 $1,441 2,800 1,400 2,600 1,300 2,400 1,200 2,200 1,100 2,000 1,000 2013
Slide 11: Energy Resources had one of its best ever periods of origination
Energy Resources had one of its best ever periods of origination activity for new contracted renewables in 2014 Energy Resources’ Highlights • Development program now well ahead of expectations we shared at our March 2013 Investor Conference • Extremely well positioned to take advantage of end of 20
Slide 12: NextEra Energy Partners operated well and delivered results in line
NextEra Energy Partners operated well and delivered results in line with expectations NextEra Energy Partners Results Fourth Quarter 2014(1) Highlights ($ MM) • Solid operational performance • Financial results in line with $54 expectations • Announced acquisitions: $32 – Palo Duro acquisition close
Slide 13: NextEra Energy's adjusted EPS increased ~7% year-over-year
NextEra Energy’s adjusted EPS increased ~7% year-over-year NextEra Energy Results Fourth Quarter EPS Full Year EPS GAAP 2013 2014 Change GAAP 2013 2014 Change FPL $0.57 $0.65 $0.08 FPL $3.16 $3.45 $0.29 Energy Resources $0.20 $1.39 $1.19 Energy Resources $1.30 $2.24 $0.94 Corporate and Other ($0.02)
Slide 14: We expect our operating cash flow to continue to improve
We expect our operating cash flow to continue to improve NextEra Energy’s Free Cash Flow 2013 2014 2015 Cash Flow from Operations $5.1 B $5.5 B $5.7 B - $6.1 B (1) Capital Expenditures ($6.7) B ($7.0) B ($7.9) B - ($8.5) B (2) Other Investing Activities $0.6 B $0.6 B $1.1 B - $1.5 B Free Cash Flow B
Slide 15: 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 15 (1) See Appendix for definition of adjusted earnings expectations.
Slide 16: 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 definition o
Slide 17: Q&A Session
Q&A Session NExTera’ NexTera energy” ENERGY & PARTNERS Z 17
Slide 18: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z 18
Slide 19: NextEra Energy
NEX Tera ENERGY &
Slide 20: The percentage of PTCs allocated to investors continued to grow in 2014
The percentage of PTCs allocated to investors continued to grow in 2014 Wind Production Summary (2) 2009 2010 2011 2012 2013 2014 (1) Effective Capacity (MW) 6,493 7,624 8,386 8,887 10,117 10,351 Wind Production (TWh) 15.8 20.4 24.6 25.8 29.2 32.0 Implied Average Capacity Factor 28% 30% 34% 33% 33%
Slide 21: Potential drivers of variability to consolidated adjusted EPS
Potential drivers of variability to consolidated adjusted EPS 2015 Potential Sources of Variability(1) Florida Power & Light • Wholesale (primarily volume) ± $0.02 • Timing of investment ± $0.01 NextEra Energy Resources • Natural gas prices (± $1/MMBtu change) ± $0.06 - $0.07 • Wind resource (± 1% d
Slide 22: Energy Resources' 2014 Equivalent EBITDA by Asset Category
Energy Resources’ 2014 Equivalent EBITDA by Asset Category(1) Q3 2013 Primary Expectations(2) Actual Driver of Delta Contracted Wind $1,280 - $1,330 $1,272 Sale of wind assets (non-NEP) Contracted Other $440 - $470 $500 Texas Wind $345 - $395 $389 Seabrook $230 - $260 $293 Shorter refueling outage S
Slide 23: NextEra Energy Resources Projected 2015 Portfolio Financial Information
NextEra Energy Resources Projected 2015 Portfolio Financial Information (As of December 8, 2014) ($MM) Value of pre-tax tax Remaining Adjusted credits included in Debt Maintenance Pre-Tax Cash Contract 1 2 3 4 5 6 7 MW EBITDA adjusted EBITDA Service Capital Other Flows Life NEP Initial Portfolio 990
Slide 24: NextEra Energy Resources Projected 2016 Portfolio Financial Information
NextEra Energy Resources Projected 2016 Portfolio Financial Information (As of December 8, 2014) ($MM) Value of pre-tax tax Remaining Adjusted credits included in Debt Maintenance Pre-Tax Contract 1 2 3 4 5 6 7 MW EBITDA adjusted EBITDA Service Capital Other Cash Flows Life NEP Initial Portfolio 990
Slide 25: NextEra Energy's credit metrics met the targets laid out for 2014
NextEra Energy’s credit metrics met the targets we laid out for 2014 and are on track to continue to improve in 2015 NextEra Energy Credit Metrics Actual Target Actual Projected S&P A- Range 2013 2014 2014 2015 FFO/Debt 23%-35% 23% 25% 25% 26% Debt/EBITDA 2.5x-3.5x 3.5x 3.4x 3.3x 3.1x Actual Target
Slide 26: Cash provided by operations increased in 2014
Cash provided by operations increased in 2014 2014 Cash Flow and Financing Free Cash Flow $ MM Cash flow from operations $5,500 Less: Cash used in investing activities (6,361) Common dividends (1,261) Free Cash Flow Deficit(1) ($2,122) Financings FPL Mortgage Bonds and Term Loans 997 Capital Holding
Slide 27: Wind Production Index
Wind Production Index(1)(2) 2013 2014 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 3 Location MW Oct Nov Dec QTR YTD MW QTR MW QTR MW QTR MW Oct Nov Dec QTR YTD Midwest 3,066 90% 110% 90% 97% 97% 3,141 115% 3,066 106% 3,066 91% 3,066 104% 120% 85% 103% 105% West 2,730 93% 89% 92% 91% 93% 2,730 100% 2,730
Slide 28: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 9/30/14 $72.1 Amounts Realized During 4th Quarter 1.5 Primary Drivers: Change in Forward Prices (all positions) 443.9 Revenue Hedges – Power, Gas & Oil Subtotal – Income Statement 445.4 Prices $509
Slide 29: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ 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 30: 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 12/31/14 2015 2016 2017 2018 2019 - 2034 2015 - 2034 Generation Related: Natural gas related positions $ 362.0 $ (71.5) $ (52.4) $ (39.4) $ (32.6) $ (166.1)
Slide 31: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings to GAAP Net Income (Three Months Ended December 31, 2013) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 248 $ 85 $ (6) $ 327 Adjustments, net of income taxes: Net unrealize
Slide 32: 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 December 31, 2014) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) Attributable to NextEra Energy, I
Slide 33: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings to GAAP Net Income (Full Year Ended December 31, 2013) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 1,349 $ 556 $ 3 $ 1,908 Adjustments, net of income taxes: Net unrealize
Slide 34: 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. (Full Year Ended December 31, 2014) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) Attributable to NextEra Energy, Inc.
Slide 35: NextEra Energy Resources Portfolio Additions
NextEra Energy Resources Portfolio Additions(1,2) (3) March 2013 Backlog Incremental Opportunities U.S. Wind: MW COD U.S. Wind: MW COD (4) (4) Tuscola Bay II 100.3 2013 Tuscola Bay II 100.3 2013 (4) (4) Steele Flats 74.8 2013 Steele Flats 74.8 2013 Total U.S. Wind in Backlog: 175.1 Pheasant Run I 74
Slide 36: 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 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 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 That May Affect Future Results (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 39: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 40: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) 2014 (millions) 2014 Net income, full-year 2014 $ 53 Net income subsequent to NEP's initial public offering $ 25 Less Net income, year-to-date September 30, 2014 52 Add back: Net income, fourth quar
Slide 41: NextEra Energy Partners Portfolio Information
NextEra Energy Partners Portfolio Information(1,2) Contract Contract (3) NEP Current 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
Slide 42: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA Expectations This presentation refers to adjusted EBITDA expectations. NEP’s adjusted EBITDA expectations represent projected revenue less fuel expense, project operating expenses, a portion of corporate G&A associated with these
Slide 43: 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 44: Cautionary Statement And Risk Factors That May Affect Future Results (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 45: Cautionary Statement And Risk Factors That May Affect Future Results (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