Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (June 2012)
44 slides from Nextera Energy's investor presentation, June 2012
Slide 1: May/June 2012 Investor Presentation
May/June 2012 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 built on a common platform
NextEra Energy is comprised of two strong businesses built on a common platform… A premier regulated utility… …and a diversified, competitive power producer Engineering & Construction Supply Chain Nuclear Generation Non-nuclear Generation 3
Slide 4: Today our position is strong and our outlook is exciting
Today our position is strong and our outlook is exciting… FPL Energy Resources Increasing capital… Largest ever renewable backlog… $B $30.0 • ~1,300 MW of U.S. wind $25.0 • ~600 MW of Canadian wind $20.0 • ~900 MW of solar $15.0 $10.0 • All expected to go into service $5.0 through 2016 $0.0 2011 201
Slide 5: 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 175 Good 150 Industry Average 125 NextEra 100 Energy 75 FPL 50 25 '03 '04 '05 '06 '07 '08 '09 '10 '11 Fossil Reliability – EFOR(3) 10% Indu
Slide 6: One of the cleanest emissions profiles among the nation's top 50 power producers
…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% Solar 16 0.3% Nuclear 22% Wind 12 13% Coal 8 6% NextEra Energy Natural Gas 4 Oil 1.0% 56% 0 NOx Emissions Rates CO2 Emissions Rates 4 (Lbs
Slide 7: A 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 8: 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. Electric Utility Industry 10-Years Ending December 31, 2011 S&P 500 Electric NextEra Utilities Index Energy Adjusted EPS Growth (CAGR) 2.2%(1) 6.3%(2) Dividends
Slide 9: 9
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Slide 10: Our approach to the business is founded on the virtuous circle
Our approach to the business is founded on the “virtuous circle” Customer Satisfaction Superior Constructive Customer Value Virtuous Circle Regulatory Delivery Environment Strong Financial Position 10
Slide 11: FPL's Customer Value Proposition
We deliver excellent value 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 – December 2011(1) $170 R
Slide 12: Value delivery is built on operational excellence and a superior cost proposition
Value delivery is built on operational excellence and a superior cost proposition FPL O&M Per Retail kWh 2.50 2.28¢ 2.25 2.00 (cents/kWh) Industry Average 1.75 1.64¢ 1.50 FPL(1) 1.25 1.00 (1) Sources: Ventyx (FERC Form 1) and FPL O&M reported annually in the 10-K; Note: 1) Excludes storm recovery 12
Slide 13: At FPL, we are investing heavily to improve long-term customer value
At FPL, we are investing heavily to improve long-term customer value without driving up customer bills 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. PS
Slide 14: FPL Base Rate Request
FPL submitted its formal base rate filing on March 19th FPL Base Rate Request • Summary of request: – $516.5 MM base revenue increase effective January 2, 2013 – $173.9 MM step increase coinciding with COD of the Cape Canaveral modernization – Three major drivers: Cape Canaveral cost recovery Less s
Slide 15: FPL's base rate increase is significantly offset by reductions in fuel
FPL’s base rate increase is significantly offset by reductions in the fuel portion of the bill FPL Base Rate Request: Bill Impact Base Portion of Bill Total Bill $100 $100 $90 $90 $80 $80 $70 $70 $60 $60 $50 $50 $40 $40 $30 $30 $20 $20 $10 $10 $0 $0 (1) (1) Typical Low Usage 1,000 kWh Bill Low Usage
Slide 16: Trends in employment and housing affordability have shown improvement
Trends in employment and housing affordability have shown improvement Florida Economy Florida Unemployment Rate(1) $B Tourism Taxable Sales(2) (12 month moving sum) 12% $68 $66 10% $64 8% $62 6% $60 4% $58 2% $56 0% $54 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan
Slide 17: NextEra Energy Resources
NEXTeCra’ ENERGY &% RESOURCES |
Slide 18: Our strategy at Energy Resources has been to 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 New Solar + Scale Nuclear Business (Seabrook) + Sco
Slide 19: Getting the most out of our extensive capital investment in physical assets
We seek to get the most out of our extensive capital investment in physical assets Capital Employed (YE 2011) Structured PMI/Retail Products 0.6% Wholesale Full Competitive Proprietary Requirements Retail Trading NEER less Marketing & Trading Capability - Asset Optimization PMI/Retail 99.4% Contribu
Slide 20: A strong portfolio and a track record of earnings growth
We have built a strong portfolio and a track record of earnings growth Energy Resources Capacity Energy Resources Growth 2002 to 2011(1) Adjusted Earnings(3) $ MM MW 20,000 792 800 18,000 737 16,000 679 14,000 553 12,000 449 10,000 8,000 258 6,000 173 4,000 151 122 2,000 0 2002 2003 2004 2005 2006 2
Slide 21: Wind is no longer a niche business
Wind is no longer a “niche” business Wind Production Summary 2007 2008 2009 2010 2011 Effective Capacity(1) (MW) 4,173 5,388 6,493 7,624 8,386 Wind Production (MM MWh) 11.4 15.4 15.8 20.4 24.6 Implied Average Capacity Factor 31% 33% 28% 30% 34% Total Production Eligible for PTCs (MM MWh) 10.5 14.4 1
Slide 22: 2012 through 2014 will be challenged by headwinds
2012 through 2014 will be challenged by headwinds… Natural Gas Prices(1) Production Tax Credit Roll-Off $/MMBtu $12 $ MM $10 $40 $37 $35 $35 $8 $30 $26 $25 $6 $20 $16 $15 $4 $9 $9 $10 $5 $2 $0 2009 2010 2011 2012E 2013E 2014E Lower natural gas prices hurt merchant The impact of wind projects reachin
Slide 23: Supported by the largest backlog of renewable projects in our history
…but supported by the largest backlog of renewable projects in our history Wind and Solar Development • In 2012, Energy Resources plans Estimated Cap Ex for Wind and to add ~1,300 MW of new U.S. Solar Projects through 2014(1) wind capacity, which are $5.9 - $6.3 B contracted or long-term hedged • We
Slide 24: Significantly hedged for the next several years
We are significantly hedged at both our levered and our unlevered assets for the next several years Energy Resources Equivalent Gross Margin Contracted or Hedged(1) On a consolidated basis our gross margin is currently hedged: Existing New 2012 96% 99% 2013 93% 100% 2014 87% 100% We remain foc
Slide 25: Lone Star Transmission
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Slide 26: Lone Star's CREZ line represents a significant 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 million of rate base • Received approval f
Slide 27: Adjusted earnings per share growth through 2014
Together, 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 re
Slide 28: Future Free Cash Flow Scenarios
An attractive option Future Free Cash Flow Scenarios “Backlog Only” Scenario(1) Alternate Scenario 2011 2014 • Additional attractive investment opportunities Cash from $4.1 B $5.0 - $5.5 B are identified Operations Less: Cash to $6.5 B $3.5 - $4.0 B Investing • Reduced free cash flow Free Cash Flow
Slide 29: Business mix expected to shift to more regulated and contracted by 2014
NextEra Energy’s business mix is expected to shift to a more regulated and long-term contracted business by 2014 Adjusted EBITDA(1) from Adjusted Earnings from Regulated and Long-Term Regulated Businesses Contracted Operations 100% 100% 84% 78% 80% 80% 65% 58% 60% 60% 40% 40% 20% 20% 0% 0% 2011 2014
Slide 30: Cash quality of earnings is comparable to other utilities
NextEra Energy’s cash quality of earnings is comparable to other utilities’ S&P 500 Electric Utility Index Companies Ratio of Cash Flow to Adjusted Earnings – 3-Yr Avg. (2009-2011)(1) Cash Flow to Adjusted Earnings Cash Flow to Adjusted Earnings Including Deferred Taxes(2) Excluding Deferred Taxes(3
Slide 31: Closing Summary
Closing Summary • Visible growth prospects • A solid foundation – Operational excellence – Financial strength – Clean emissions profile • Proven track record of success – Building businesses – Delivering growth – Creating shareholder value 31
Slide 32: Critical Success Factors for 2012
We are intensely focused on execution Critical Success Factors for 2012 • At FPL: – Continue to deliver outstanding customer value – Continue execution on major capital projects – Achieve satisfactory outcome of base rate case • At Energy Resources: – Ensure solid execution in daily operations – Mov
Slide 33: NExTera’
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Slide 34: Appendix
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Slide 35: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ 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 36: 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 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 $4.59 Adjustments: Net unrealized mark-to-market (gains)
Slide 37: NextEra Energy Resources Reconciliation of Adjusted Earnings to Net Income
NextEra Energy Resources, LLC Reconciliation of Adjusted Earnings to Net Income ($ 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 38: Reconciliation of Adjusted to GAAP 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 39: 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 Net income $1,923 ($86) (1) $1,837 Add back interest 1,034 0 1,034 Add back income taxes 529 (57) (1) 472 Add back d
Slide 40: Reconciliation of Cash Flow/Adjusted Earnings (Including Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Including Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income (1) Ratio 2009 2010 2011 Average 2009 2010 2011 Average Adjusted Cash Flow $3,686 $4,077
Slide 41: Reconciliation of Cash Flow/Adjusted Earnings (Excluding Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Excluding Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income (1) Ratio 2009 2010 2011 Average 2009 2010 2011 Average Adjusted Cash Flow $3,413 $3,566
Slide 42: 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 43: Cautionary Statement And Risk Factors That May Affect Future Results (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) risks to NextEra Energy and FPL's retail businesses of compromise of sensitive customer data; risks to NextEra Energy and FPL of volatility in the market values of derivative instruments and limited liquidity in OTC markets
Slide 44: NExTera’
NExTera’ ENERGY @