Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (2015)
50 slides from Nextera Energy's investor presentation, 2015
Slide 1: 2015 Asia Investor Presentation
2015 Asia Investor Presentation
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: Table of Contents
Table of Contents • NextEra Energy, Inc. Overview (NYSE: NEE) Slide 4 • Florida Power & Light Slide 9 • NextEra Energy Resources Slide 16 • NextEra Energy Partners, LP (NYSE: NEP) Slide 24 • Financial Review Slide 30 • Appendix Slide 33 3
Slide 4: NextEra Energy is comprised of two strong businesses supported by a common platform
NextEra Energy (NYSE: NEE) is comprised of two strong businesses supported by a common platform • $46 B market capitalization (1) • 44,869 MW in operation (2) • $75 B in total assets • One of the largest U.S. electric utilities • U.S. leader in renewable generation • 4.7 MM customer accounts • Asset
Slide 5: Built on a foundation of operational excellence and financial strength, and focused on clean generation
Built on a foundation of operational excellence and financial strength, and focused on clean generation Cost and Reliability Generation Profile 2013 Utility & Corporate Benchmarks 2014 NextEra Energy Fuel Mix MWhs(4) Good Industry 6.9% Nuclear Wind Good 26% 17% Industry ~$24 FL Avg ~97 Natural Gas C
Slide 6: We have a long-term track record of delivering shareholder value
We have a long-term track record of delivering shareholder value Adjusted Earnings Per Share(1) Total Shareholder Return(2) 35% 100% 93% $5.30 28% 29% 90% $4.97 30% 75% $4.57 80% $4.30 $4.39 25% 70% $3.84 $4.05 $3.49 20% 60% $3.04 48% 50% $2.49 $2.63 15% 14% 40% 10% 30% 20% 5% 10% 0% 0% One Year Thr
Slide 7: NextEra Energy – Investment Proposition
NextEra Energy is well-positioned for future growth NextEra Energy – Investment Proposition • Visible growth opportunities at both primary businesses – At FPL, investing capital to improve customer value – At Energy Resources, strong pipeline of renewable generation development opportunities • Align
Slide 8: NextEra Energy – Partnership with NEP
NextEra Energy investment proposition is enhanced by the formation of NextEra Energy Partners (NYSE: NEP) NextEra Energy – Partnership with NEP • Best in class YieldCo vehicle through creation of – Strong sponsor with proven development track record – Extensive potential drop down visibility – Well-
Slide 9: Florida Power & Light
9
Slide 10: Florida Power & Light is one of the best utility franchises in the U.S.
Florida Power & Light is one of the best utility franchises in the U.S. Florida Power & Light(1) • One of the largest U.S. electric utilities • Vertically integrated, retail rate-regulated • 4.7 MM customer accounts • 25,092 MW in operation • $11.4 B in operating revenues(1) • $39 B in total assets
Slide 11: FPL currently operates under a settlement agreement extending through the end of 2016
FPL currently operates under a settlement agreement extending through the end of 2016 Settlement Agreement • Effective for a four-year term beginning January 2013 through December 2016 • Base rate adjustment increase of $350 MM effective January 2013 and Generation Base Rate Adjustment (GBRA) upon c
Slide 12: Focus on efficiency has driven best in class performance
Focus on efficiency has driven best in class performance 2013 Operational Cost Effectiveness $100.00 Good Adjusted Regressed Top Quartile Top Decile $/Retail MWh(1) FPL 2013 = $15.19/MWh Log/Log $10.00 1,000,000 10,000,000 100,000,000 1,000,000,000 Retail MWh (1) FERC Form 1, 2013. Excludes pensions
Slide 13: Solar Investment
FPL is moving forward on three ~75 MW solar projects to take advantage 2016 ITC window and prior development work Solar Investment • Combined ~225 MW – $400 to $420 MM • Expected in-service in 2016 • Existing FPL properties: – Manatee County – DeSoto County – Charlotte County • Near existing FPL tra
Slide 14: Natural Gas Supply Project
The Florida Public Service Commission approved FPL’s initial proposal an innovative plan to invest in natural gas supplies Natural Gas Supply Project • JV with PetroQuest • Development of production wells in Woodford Shale region • Connected to existing natural gas transportation(1) • Represents 2.4
Slide 15: Natural Gas Pipeline Investments
The Florida Public Service Commission has approved FPL’s natural gas pipeline proposal Natural Gas Pipeline Investments • Best economic solution for customers – Sabal Trail Transmission (Spectra Energy): – ~465 miles to Central Florida Hub – Estimated capital cost of ~$3 B – NextEra Energy to invest
Slide 16: NextEra Energy Resources
NEXTeCra’ ENERGY &% RESOURCES |
Slide 17: What is Energy Resources?
What is Energy Resources? A Set of Skills + A Set of Assets • Largest greenfield developer in • Largest wind and solar renewable North America over the last decade portfolio in North America – Over 12,000 MW of greenfield • Over 12,500 MW of stable long-term development contracted projects • Leader
Slide 18: Energy Resources' generation portfolio consists of a diverse set of technologies
Energy Resources’ generation portfolio consists of a diverse set of technologies positioned in a number of regions Energy Resources’ Generation Portfolio(1) Wind Nat Gas 11,427 MW 3,991 MW Nuclear 2,721 MW Oil - 796 MW Solar - 742 MW Contracted 66% Not Contracted 34% 18 (1) As of December 31, 2014;
Slide 19: Energy Resources' Highlights
Energy Resources had one of its best ever periods of origination activity for new contracted renewables in 2014 Energy Resources’ Highlights • Development program signed contracts for roughly 1,400 megawatts of new renewables projects during 2014 • Extremely well positioned to take advantage of end
Slide 20: Renewable projects are increasingly price competitive with conventional generation
Renewable projects are increasingly price competitive with conventional generation U.S. Wind U.S. Solar Delivered Cost of Electricity(1) Delivered Cost of Electricity(2) Levelized cost to wholesale customer ($/MWh) Levelized cost to wholesale customer ($/MWh) $70 $67 $220 $200 $210 $60 $55 $180 $50
Slide 21: 111(d) has the potential to drive significant demand for additional renewable energy
111(d) has the potential to drive significant demand for additional renewable energy EPA Proposed Clean Air Act 111(d) Rule • Published in June 2014 for comment; process is ongoing • Rule proposes state-by-state CO2 emission targets, expressed in pounds of CO2 per megawatt hour • State emission targ
Slide 22: Energy Resources' strategy implies a shift in portfolio mix towards long-term contracted assets
Energy Resources’ strategy implies a shift in portfolio mix towards long-term contracted assets Energy Resources Adjusted EBITDA(1) 100% 11% 15% 13% 75% 24% 40% 26% 50% 59% 63% 25% 49% 0% 2009 2012 2014 Long-Term Contracted Merchant Peripheral Businesses (1) See appendix slide 43 for definition of A
Slide 23: Mountain Valley Pipeline project continues to progress
Development activities for the Mountain Valley Pipeline project continue to progress Mountain Valley Pipeline Project • JV with EQT • Designed to connect Marcellus and Utica shales with markets in the Southeast regions – ~300 mile natural gas pipeline – Route from existing Equitrans transmission sys
Slide 24: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 25: NextEra Energy Partners – Investment Proposition
NextEra Energy Partners is a best-in-class YieldCo NextEra Energy Partners – Investment Proposition • Growth-oriented partnership formed by NextEra Energy – Strong sponsor with proven development track record – Access to management, skills and industry-leading expertise of NEE to monitor and operate
Slide 26: Asset portfolio of geographically diversified projects under long-term contracts
Asset portfolio consists of 11 geographically diversified projects operating under long-term contracts Asset Portfolio Capacity: ~1,240 MW 26 As of January 9, 2015
Slide 27: NEP's distributable cash flow is driven by OpCo distributions
NEP’s distributable cash flow is driven by OpCo distributions Distribution Policy Public Unitholders • The operating subsidiaries manage the project entities, service debt payments and NextEra Energy NextEra Energy fund any maintenance CapEx Partners requirements • The OpCo manages the cash Distribu
Slide 28: Structure incorporates the IDR Fee structure from typical MLPs
Structure incorporates the IDR Fee structure from typical MLPs Incentive Distribution Fee Overview • IDR Fee entitles an affiliate of sponsor to receive an increasing share of distributions as benchmarks for OpCo distributions are achieved (up to 50%) Cash Flow $/ Unit & Split levels Example with $2
Slide 29: Aligned interests with NextEra Energy
Aligned interests with NextEra Energy IDR Fee Asset Sale Interest Proceeds Accretive Increase Drop- IDR Fee Downs Cash Flows Driving LP Unit Growth is the Key LP Distribution Growth Retained LP Stake 29
Slide 30: Financial Review
NeExTera’ ENERGY @ FINANCIAL REVIEW
Slide 31: NextEra Energy's credit metrics met the targets we 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 32: NextEra Energy has received approximately $18.1 billion of credit
NextEra Energy has received approximately $18.1 billion(1) of credit, including commitments and funded transactions Country Breakdown by Funding We have a balanced and well-diversified lending group (1) $18.1 billion of credit includes corporate credit facilities commitments and term loans outstandi
Slide 33: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS 2 33
Slide 34: NextEra Energy
NeExTera’ ENERGY @
Slide 35: History of State Deregulation
While the majority of states use “cost-of-service” ratemaking, a number of states have gone through deregulation History of State Deregulation • During the 1990s, a number of states adopted different regulatory models to encourage competition among generators to serve retail customers • Status of el
Slide 36: Major Regulatory Agencies
Multiple regulators, at the federal and state level, govern rate setting, transmission, reliability, and environmental protection Major Regulatory Agencies • Federal Energy Regulatory Commission (FERC) – FERC has also encouraged the formation of regional transmission organizations (RTOs) and Indepen
Slide 37: Florida Public Service Commission
Florida is regulated by a state agency known as the Florida Public Service Commission Florida Public Service Commission • Consists of five members selected for their knowledge and experience in fields substantially related to the duties and functions of the Commission – Commissioners are appointed b
Slide 38: FPL's costs are recovered through base rates as well as clause mechanisms
FPL’s costs are recovered through base rates as well as through clause mechanisms Cost Recovery Mechanisms • Base rates – designed to recover the costs of constructing, operating, and maintaining a utility system – Generally, most of FPL’s return is earned through base rates • Cost recovery clauses
Slide 39: The United States power industry varies meaningfully by region
The United States power industry varies meaningfully by region United States Power Markets Large and small regulated and Regulated Geographically Transmission & dispersed merchant utilities Distribution regulated utilities Large merchant utilities Large regulated utilities Large regulated utilities
Slide 40: NEE Investor Relations Website
The Investor Relations website is a great source for company information NEE Investor Relations Website • You can find the IR home page here on the main www.nexteraenergy.com site: 40
Slide 41: Reconciliation of Earnings Per Share to Adjusted Earnings Per Share
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $2.48 $2.34 $3.23 $3.27 $4.07 $3.97 $4.74 $4.59 $4.56 $4.47 $5.6
Slide 42: NextEra Energy Resources Portfolio Additions
NextEra Energy Resources Portfolio Additions(1,2) March 2013 Backlog (3) Incremental Opportunities U.S. Wind: MW COD U.S. Wind: MW COD Tuscola Bay II(4) 100.3 2013 Tuscola Bay II(4) 100.3 2013 Steele Flats(4) 74.8 2013 Steele Flats(4) 74.8 2013 Total U.S. Wind in Backlog: 175.1 Pheasant Run I 74.8 2
Slide 43: Definitional information
Definitional information NextEra Energy Resources, LLC. Adjusted EBITDA (Slide 22) Adjusted EBITDA includes NextEra Energy Resources consolidated investments, excluding Spain, its share of NEP IPO and estimated investments consistent with accelerated growth, as well as its share of equity method inv
Slide 44: 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 45: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) occurrence of work strikes or stoppages and increasing personnel costs; NextEra Energy's ability to successfully identify, complete and integrate acquisitions, including the effect of increased competition for acquisitions;
Slide 46: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 47: NextEra Energy Partners Portfolio Information
NextEra Energy Partners Portfolio Information(1,2) Contract Contract NEP Current Portfolio: Type MW COD Expiration NEP ROFO Portfolio(3): 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 A
Slide 48: 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 49: 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 50: 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