Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (February 2013)
52 slides from Nextera Energy's investor presentation, February 2013
Slide 1: February Investor Presentation
February Investor Presentation
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… • $30.5 B market capitalization(1) • 42,179 MW in operation • $64 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 24 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 Good 150 30% FL Industry Average 28% 125 NextEra Energy 100 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 7.5 22% Wind 6.0 13% Coal 4.5 6% NextEra 3.0 Energy Natural Gas Oil 1.0% 56% 1.5 0.0 NOx Emissions Rates CO2 E
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) $25.1 $4.57 $21.7 $4.30 $4.39 $19.5 $3.84 $4.05 $17.7 $3.49 $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 '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-Year CAGR Ending December 31, 2012 S&P 500 Utilities NextEra S&P 500 Index Energy Adjusted EPS (2001-2011)(1) 8.0% 0.7% 6.3%(2) Dividend per Share(3
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Slide 9: Our strategy at FPL is founded on the virtuous circle
Our strategy at FPL is founded on the “virtuous circle” Customer Satisfaction Superior Constructive Customer Value Virtuous Circle Regulatory Delivery Environment Strong Financial Position 9
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 2012 –
Slide 11: Efficiency improvements to sustain a superior cost position
…by investing in significant efficiency improvements to sustain a superior cost position relative to our industry FPL Customer Value Proposition SAIDI: System Average # of Minutes Interruption Duration Index(1) O&M ¢/kWh: 1996-2012(2) 150 Industry Average 2.50 2.25 125 FL Industry Average 2.00 100 I
Slide 12: Excellent progress on major capital projects in 2012
We made excellent progress on our major capital projects in 2012 FPL’s Major Capital Projects Modernization Projects Nuclear Uprates • Cape Canaveral is 96% • Completed uprates added complete and is on time and ~395 MW to fleet under budget with an expected COD of June 2013 – St. Lucie Unit 1 • Rivi
Slide 13: Satisfactory outcome to our base rate case in 2012
We also reached a satisfactory outcome to our base rate case in 2012, a positive for both FPL customers and our shareholders Base Rate Case Settlement • Main components of settlement: – Effective January 2013 through December 2016 – $350 MM retail base revenue increase effective January 2, 2013 – Al
Slide 14: Using capital to improve long-term customer value proposition
We will seek ways to use capital to improve our long-term customer value proposition FPL’s Capital Expenditures(1) $B $4.0 $3.5 $3.0 ? ? $2.5 ? ? ? $2.0 $4.1 $1.5 $2.5 $2.4 $1.0 $1.8 $1.6 $1.5 $0.5 $0.0 2012 2013E 2014E 2015E 2016E 2017E 14 (1) Capital expenditure dollars exclude nuclear fuel and ar
Slide 15: Florida will need additional natural gas infrastructure
Florida will need additional natural gas infrastructure Florida Gas Pipeline Proposal • Issued RFP for third natural gas pipeline to serve Florida – Will provide for 400,000 MMBtu/day of natural gas capacity beginning in 2017 and an additional 200,000 MMBtu/day starting in 2020 – Expect to offer a s
Slide 16: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 17: Energy Resources strategy: build around core strengths
Our strategy at Energy Resources has always been to build around our core strengths, taking advantage of market opportunities Energy Resources Strategy Core Strengths Visible Growth Opportunities + Operational Excellence + Financial Strength Skills Solar + Scale Marketing & Trading + Scope Nuclear B
Slide 18: Energy Resources executed well on major capital projects in 2012
Despite headwinds, Energy Resources executed well on major capital projects in 2012… Energy Resources’ 2012 Highlights • Commissioned roughly 1,500 megawatts of wind in the U.S., a record for any company in our industry – Also brought our 10,000th megawatt of wind online in December • Commissioned f
Slide 19: Energy Resources' growth, 2001 to 2012
…which has helped us continue our excellent track record of delivering growth Energy Resources’ Growth – 2001 to 2012 2001 2012 Wind Capacity (MW) 1,172 10,057 Total Capacity (MW) 5,063 18,122 Total Assets ($ B) $4.9 $27.2 Operating Revenues ($ MM) $869 $3,895 Adjusted Earnings ($ MM)(1) $73 $693 Ad
Slide 20: Energy Resources' major capital projects in 2013
We will remain focused on execution in 2013 Energy Resources’ Major Capital Projects • Three large-scale solar projects will begin to enter service in 2013 – Genesis: Two 125 MW units; $1.2 B capital cost COD: November 2013 and April 2014 – Desert Sunlight: 275 MW net ownership; $1.1 B capital cost
Slide 21: Adding to our backlog of development projects
We will also be focused on adding to our backlog of development projects Wind and Solar Development • Currently developing our Estimated Cap Ex(1) for Wind and Solar Projects in Backlog 2013 and 2014 U.S. wind program $3.6 - $4.0 B • ~$1.7 B for backlog wind projects through 2016 Wind – Includes our
Slide 22: Continued growth to offset PTC roll-off headwind
Our continued growth in the business will help offset the PTC roll- off headwind that we will continue to face Production Tax Credit Roll-Off(1) Annual Wind MW Build MW $ MM 1,600 $50 $45 1,400 $45 1,200 $40 $37 $35 $35 1,000 $30 $26 800 $25 $20 600 $16 $16 $15 400 $10 200 $5 $0 0 '00 '01 '02 '03 '0
Slide 23: Wind fleet comparable to a top 15 utility
Our wind fleet has grown to a size comparable to a top 15 utility Wind Production Summary 2007 2008 2009 2010 2011 2012 (1) Effective Capacity 4,173 5,388 6,493 7,624 8,386 8,881 Wind Production 11.4 15.4 15.8 20.4 24.6 25.8 Implied Average Capacity Factor 31% 33% 28% 30% 34% 33% Total Production El
Slide 24: Portfolio shifting to a more long-term contracted business
Energy Resources’ portfolio is shifting to a more long-term contracted business, while contributions from our peripheral businesses remain roughly flat as a proportion of the total Energy Resources’ Adjusted EBITDA(1) 100% 11% 15% 15% 75% 20% 26% 40% 50% 59% 65% 25% 49% 0% 2009 2012 2014 Long-Term C
Slide 25: Market risk mitigated by a 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) 100% 98% 100% 97% 95% 80% 60% 40% 20% 0% 2013 2014 Existing New We remain focused on having a highly contracted portfolio; existing assets a
Slide 26: NextEra Energy Transmission
NEXT@ra’ ENERGY &% TRANSMISSION
Slide 27: Lone Star's CREZ line: a significant regulated growth opportunity
Successful development of Lone Star’s CREZ line represents a significant regulated growth opportunity Lone Star Transmission CREZ Line Project Overview Initial Rate Case Proceeding • In January 2009, Lone Star was • Texas PUC issued final order for selected by Texas PUC as a a $14.7 MM revenue requi
Slide 28: Transmission business as a driver of growth later in the decade
We expect our transmission business to be a driver of growth in the latter part of the decade Transmission Rationale • Supports renewables development • Supports fossil development • Improves market for existing assets • Reduces business risk profile • Increases shareholder value 28
Slide 29: NextEra Energy Financial
NEXT@Cra’ ENERGY &
Slide 30: Adjusted Earnings Per Share Expectations
Adjusted Earnings Per Share Expectations 2013 $4.70 - $5.00 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 31: Investment opportunities form basis for expected adjusted EPS growth
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 $4.70 - $5.00 $4.57 $4.00 $3.00 $2.41 $2.00 $1.00 $0.00 2012 2013E 2014E Note: See Appendix f
Slide 32: 2012 Actual and Future Financing Plans
2012 marked NextEra Energy’s biggest year of capital investment at both FPL and Energy Resources 2012 Actual and Future Financing Plans 2012 Sources and Uses of Cash Future Financing Plans USES $ MM % • Capital needs in 2013 to Cash to Investing $8,928 90% decline as new investments Common Dividends
Slide 33: Cash quality of earnings comparable to other utilities
NextEra Energy’s cash quality of earnings is comparable to other utilities’ S&P 500 Electric Utility Index Companies Ratio of Cash Flow to Adjusted Earnings – 3-Yr Avg. (2009-2011)(1) Cash Flow to Adjusted Earnings Cash Flow to Adjusted Earnings Including Deferred Taxes(2) Excluding Deferred Taxes(3
Slide 34: Business mix shifting to more regulated and long-term 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 35: Current dividend policy reflects increased contribution from regulated businesses
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 • Target payout ratio of 55% in $2.40 $2.20 2014, im
Slide 36: Focus for 2013
Focus for 2013 • FPL: – Maintain leading customer value proposition – Continue execution on “mega projects” Fourth nuclear uprate Cape Canaveral in service mid-year Riviera and Port Everglades on track to enter service in 2014 and 2016 – Focus on productivity and cost-effectiveness – Identify increm
Slide 37: NextEra Energy
NEXT@Cra’ ENERGY &
Slide 38: Appendix
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Slide 39: Energy Resources' 2012 Equivalent EBITDA by Asset Category
Energy Resources’ 2012 Equivalent EBITDA by Asset Category(1) ($ MM) Q3 2011 Primary Expectations(2) Actual Driver of Delta Contracted Wind $1,010 - $1,060 $940 Wind resource Contracted Other $445 - $475 $510 Decommissioning fund investment gains Texas Wind $200 - $250 $250 Northeast (Nuclear & Hydr
Slide 40: NextEra Energy Resources 2013 Portfolio Financial Information
NextEra Energy Resources 2013 Portfolio Financial Information (as of December 10, 2012) Equivalent Equivalent Contribution to 1 2 3 Expected Gross Margin % Gross Equivalent Remaining Following 1 Generation Range Margin EBITDA Contract Year PTC MWs Twh's $ in millions Hedged $ in millions Life Expira
Slide 41: Existing assets largely contracted or hedged for 2013
Energy Resources’ existing assets are largely contracted or hedged for 2013 2013 Equivalent Gross Margin Contributions(1) 2013 Portfolio Sensitivities 6% New Investments(2) • $1/MMBtu change in 12% natural gas ≈ 3 cents in Other (3) adjusted EPS(4) 57% 25% Contracted Assets Merchant Assets (98% hedg
Slide 42: NextEra Energy Resources 2014 Portfolio Financial Information
NextEra Energy Resources 2014 Portfolio Financial Information (as of December 10, 2012) Equivalent Equivalent Contribution to 1 2 3 Expected Gross Margin % Gross Equivalent Remaining Following 1 Generation Range Margin EBITDA Contract Year PTC MWs Twh's $ in millions Hedged $ in millions Life Expira
Slide 43: Existing assets largely contracted or hedged for 2014
Energy Resources’ existing assets are largely contracted or hedged for 2014 2014 Equivalent Gross Margin Contributions(1) 2014 Portfolio Sensitivities • $1/MMBtu change in 12% New Investments(2) natural gas ≈ 4-5 cents in adjusted EPS(4) 13% Other (3) 51% Contracted Assets (97% hedged) • 1% change i
Slide 44: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Net Income $791 $479 $903 $896 $901 $1,281 $1,312 $1,639 $1,615 $1,957 $1,923 $1,911 Adjustments, net of income taxes: Net unrealized mark-to-market (gains)
Slide 45: Reconciliation of Adjusted Earnings Per Share 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 2012 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 $4.56 Adjustments: Net unrealized mark-to-mark
Slide 46: NextEra Energy Resources, LLC Reconciliation of Adjusted Earnings to Net Income
NextEra Energy Resources, LLC Reconciliation of Adjusted Earnings to Net Income ($ millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Net Income (Loss) $81 ($173) $192 $148 $146 $540 $461 $831 $759 $980 $774 $687 Adjustments, net of income taxes: Net unrealized mark-to-market (gai
Slide 47: Reconciliation of Cash Flow/Adjusted Earnings (Including Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Including Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income (1) Ratio 2009 2010 2011 Average 2009 2010 2011 Average Adjusted Cash Flow $3,686 $4,077
Slide 48: Reconciliation of Cash Flow/Adjusted Earnings (Excluding Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Excluding Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income (1) Ratio 2009 2010 2011 Average 2009 2010 2011 Average Adjusted Cash Flow $3,413 $3,566
Slide 49: Reconciliation of 2011 Adjusted EBITDA to Net Income
Reconciliation of 2011 Adjusted Earnings Before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA) to Net Income (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 ba
Slide 50: 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 51: 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 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 52: NextEra Energy
NEXT@Cra’ ENERGY &
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