Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q2 2015 Earnings Presentation
41 slides from Nextera Energy's earnings presentation, Aug 3, 2015
Slide 1: Earnings Conference Call Second Quarter 2015
Earnings Conference Call Second Quarter 2015 August 3, 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: Second Quarter 2015 Highlights
Successful second quarter; strong execution on growth plans resulting in increased financial expectations for both NextEra Energy and NEP Second Quarter 2015 Highlights • NextEra Energy achieved adjusted EPS growth of 9% over the prior-year comparable quarter and executed on future growth drivers •
Slide 4: FPL's second quarter EPS increased modestly year-over-year
FPL’s second quarter EPS increased modestly year-over-year Florida Power & Light Results – Second Quarter Net Income EPS ($ MM) $423 $435 $0.96 $0.97 2014 2015 2014 2015 4
Slide 5: FPL EPS contribution drivers
Continued investment in the business was the principal driver of growth, partially offset by share dilution Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) Second $B Quarter 35.0 $30.9 $29.3 FPL – 2014 EPS $0.96 30.0 4.1 3.0 Drivers: 25.0 New Investments $0.0
Slide 6: Florida Power & Light Highlights
Continued solid progress on major capital initiatives Florida Power & Light Highlights • Major capital initiatives remain on track versus March 2015 Investor Conference • Received Florida PSC approval of modified natural gas reserve guidelines for up to $500 million per year in potential additional
Slide 7: Florida's economy continues to grow at a healthy pace
Florida’s economy continues to grow at a healthy pace Florida Economy Florida Unemployment(1) Florida Building Permits(2) 12% 12,000 10% 10,000 May-15 8% 8,000 Jun-15 6% 6,000 4% 4,000 2% 2,000 0% 0 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan
Slide 8: FPL's second quarter retail sales and customer characteristics
FPL’s second quarter retail sales were driven by strong customer growth and weather-related usage Customer Characteristics (through June 2015) Retail kWh Sales Customer Growth(1,3) (Change vs. prior-year quarter) (Change vs. prior-year quarter) 100 Customer Growth & Mix 1.7% 80 66 # of 60 UKU Impact
Slide 9: Energy Resources Results – Second Quarter
Energy Resources’ adjusted EPS increased 9 cents per share over the prior-year comparable quarter Energy Resources Results(1) – Second Quarter GAAP Adjusted Net Income(2) EPS(2) Net Income EPS ($ MM) ($ MM) $273 $0.61 $251 $0.57 $213 $0.48 $81 $0.18 2014 2015 2014 2015 2014 2015 2014 2015 (1) See Ap
Slide 10: Energy Resources Adjusted EPS Contribution Drivers
Energy Resources core business was driven by contributions from new wind and solar additions Energy Resources Second Quarter Adjusted EPS(1) Contribution Drivers $0.80 $0.70 $0.10 $0.04 ($0.05) $0.60 ($0.05) $0.12 $0.57 ($0.07) $0.50 $0.48 $0.40 ($0.14) Wind resource Q2 2015: 93% of normal ($0.03) P
Slide 11: Energy Resources Adjusted EBITDA and CFO – First Half 2015
Energy Resources’ adjusted EBITDA and cash flow from operations increased year to date Energy Resources Adjusted EBITDA and CFO – First Half 2015 Adjusted EBITDA(1) Cash Flow from Operations(2) $ MM $ MM 2,000 $1,858 900 $796 1,800 $1,659 800 1,600 700 $624 1,400 600 1,200 500 1,000 400 800 600 300
Slide 12: Energy Resources Highlights
We are increasing our expectations for the 2015 to 2018 development program based on recent origination success Energy Resources Highlights(1) • Added ~555 MW new projects to backlog since the last call: – ~525 MW for delivery by end of 2016, including a new ~125 MW solar project – ~30 MW additional
Slide 13: NextEra Energy Partners – Second Quarter
NEP made excellent progress on growth objectives NextEra Energy Partners – Second Quarter Financial Results(1,2) Highlights ($ MM) • Excellent execution on growth 120 – Completed ~664 MW acquisition $102 during the quarter 100 – Announcing agreement to acquire 80 seven natural gas pipelines 60 $50 •
Slide 14: NEP Portfolio Additions: NET Midstream acquisition
NEP has reached an agreement to acquire NET Midstream, a developer, owner and operator of seven natural gas pipelines located in Texas NextEra Energy Partners – Portfolio Additions • NET Midstream acquisition adds high-quality cash flows that complement NEP’s existing renewables portfolio – 3.0 Bcf
Slide 15: NextEra Energy EPS Summary – Second Quarter
NextEra Energy’s adjusted earnings per share increased 13 cents versus the prior year comparable quarter NextEra Energy EPS Summary(1) – Second Quarter GAAP 2014 2015(2) Change FPL $0.96 $0.97 $0.01 Energy Resources $0.18 $0.61 $0.43 Corporate and Other ($0.02) $0.01 $0.03 Total $1.12 $1.59 $0.47 Ad
Slide 16: NextEra Energy Adjusted Earnings Per Share Expectations
NextEra Energy Adjusted Earnings Per Share Expectations(1) 2015 $5.40 - $5.70 2016 $5.85 - $6.35 $6.60 - $7.10 2018 (6% - 8% CAGR off 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, 2) Adjusted EBITDA CAFD 2015 $400 - $440 MM $100 - $120 MM 2016 $710 - $760 MM $250 - $280 MM Unit Distributions 2015 ~$1.23 annualized rate by year end 2016 - 2020 12% - 15% average annual growth (1) See Appendix for definition of Adj
Slide 18: NextEra Energy announces new dividend policy
NextEra Energy announces new dividend policy NextEra Energy Dividend Expectations Dividend Per Share Growth Dividend Policy • Targeting increased rate of dividend growth $4.30 - $4.60 • Dividend payout ratio expected to increase from 55% current level to 65% $3.08 by 2018 • Expected growth in DPS of
Slide 19: Q&A Session
Q&A Session NExTera’ NexTera energy” ENERGY & PARTNERS 2 19
Slide 20: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS 2 20
Slide 21: NExTera’
NExTera’ ENERGY @
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) ± $0.02 - $0.03 • Wind resou
Slide 23: Wind Production Index
Wind Production Index(1)(2) 2014 2015 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR Location MW Apr May Jun QTR MW QTR MW QTR YTD MW QTR MW Apr May Jun QTR YTD Midwest 3,066 114% 99% 103% 106% 3,066 91% 3,066 103% 105% 3,066 101% 3,066 102% 106% 79% 97% 100% West 2,730 106% 102% 108% 105% 2,730 91% 2,931
Slide 24: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($MM, after-tax) Asset/(Liability) Balance as of 3/31/15 $539.7 Primary Drivers: Amounts Realized During 2nd Quarter (59.2) Revenue Hedges – Power, Gas & Oil Change in Forward Prices (all positions) 82.2 Prices $45.6 Subtotal – Income Statement 23.0 All
Slide 25: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($MM 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 Balance
Slide 26: 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 6/30/15 2015 2016 2017 2018 2019 - 2034 2015 - 2034 Generation Related: Natural gas related positions $ 424.8 $ (32.5) $ (63.3) $ (60.0) $ (44.4) $ (224.6) $ (424.8)
Slide 27: 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 86 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/Br
Slide 28: Reconciliation of Adjusted Earnings to GAAP Net Income (Q2 2015)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended June 30, 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 29: Reconciliation of Adjusted Earnings to GAAP Net Income (Q2 2014)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (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 Incom e (Loss) Attributable to NextEra Energy, Inc.
Slide 30: Reconciliation of Adjusted Operating Cash flow to GAAP Operating Cash Flow
Reconciliation of Adjusted Operating Cash flow to GAAP Operating Cash Flow Actual Forecast (millions) 2014 2015 Inc/(Dec) Grow th Cash flow s from operating activities $ 5,500 $ 5,816 $ 316 5.7% FPL Clause recoveries 67 (163) Cedar Bay acquisition 520 Adjusted cash flow s from operating activities $
Slide 31: 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 32: 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 33: 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 34: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 35: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q2 2015 Net income $ 23 Add back: Depreciation and amortization 30 Interest expense 26 Income taxes 5 CITC / ITC 12 Production tax credits 22 Benefits associated with differential membership interes
Slide 36: 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 revenue less fuel expense, project operating expenses, a portion of corporate G&A asso
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 federal securities laws. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra
Slide 38: Cautionary Statement And Risk Factors (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 39: Cautionary Statement And Risk Factors (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 40: Cautionary Statement And Risk Factors (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
Slide 41: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) the natural gas pipeline industry is highly competitive, and increased competitive pressure could adversely affect NEP’s business if NEP completes the acquisition of NET Midstream; if third-party pipelines and other facilit