Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (September 2013)
47 slides from Nextera Energy's investor presentation, September 2013
Slide 1: September 2013 Investor Presentation
September 2013 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: Agenda
Agenda • NextEra Energy, Inc. Overview • Florida Power & Light • NextEra Energy Resources • NextEra Energy Transmission • NextEra Energy, Inc. Financial Review 3
Slide 4: NextEra Energy – Investment Proposition
NextEra Energy is well-positioned for future growth NextEra Energy – Investment Proposition • Above-average and highly visible growth through 2016 – Four years of regulatory certainty at FPL – Strong backlog at Energy Resources with upside potential • Strong and increasing cash flow from operations
Slide 5: 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 • $34.1 B market capitalization(1) • 42,526 MW in operation • $65 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 6: Built on a foundation of operational excellence and financial strength
NextEra Energy is built on a foundation of operational excellence and financial strength SAIDI: System Average (1) Interruption Duration Index Utility Credit Ratings(3) Minutes 35% 34% 150 FL Industry Average Good 125 30% 100 NextEra FPL Energy 75 25% 50 21% 25 20% '06 '07 '08 '09 '10 '11 '12 Fossil
Slide 7: One of the cleanest emissions profiles among top 50 power producers
NextEra Energy has one of the cleanest emissions profiles among the nation’s top 50 power producers NextEra Energy 2012 Fuel Mix(1) SO2 Emissions Rates(2) (MWh) (Lbs/MWh) 9.0 Nuclear Solar <1% 7.5 22% Nuclear Wind 21%15% Wind Coal 3% 6.0 14% Hydro 1% 4.5 Oil <1% NextEra 3.0 Energy Natural Gas 59% 1.
Slide 8: Continued long-term record of delivering shareholder value
In 2012, we continued our long-term record of delivering shareholder value Adjusted Earnings Per Share(1) Total Shareholder Return(2) 20% 18% 50% 47% $4.57 16% $4.30 $4.39 40% $3.84 $4.05 15% 36% $3.49 28% $3.04 30% $2.41 $2.48 $2.49 $2.63 10% 20% 5% 1% 10% 0% 0% '02 '03 '04 '05 '06 '07 '08 '09 '10
Slide 9: Leading total shareholder return on a YTD basis
NextEra Energy has one of the leading total shareholder returns on a YTD basis in our industry and outperformed both the S&P 500 and the S&P 500 Utilities Index over the period Top 10 Power Companies(1) – YTD Total Shareholder Return 25% 20.9% 20% 19.2% 16.2% 15.0% 15% 10% 9.9% 8.9% 6.3% 6.3% 5% 5.1
Slide 10: Solid earnings results through first half of the year
Through the first half of the year, the company reported solid earnings results NextEra Energy Results(1) – First Half 2013 Adjusted Earnings Adjusted EPS ($ MM) $1,097 $2.59 $949 $2.29 2012 2013 2012 2013 10 (1) See Appendix for reconciliation of adjusted amounts to GAAP amounts
Slide 11: Moving forward on a number of incremental investments
We are moving forward on a number of incremental investments Incremental Capital Opportunities Opportunity Status FPL Filed plan with PSC to invest additional • Storm hardening ~$400 MM in 2013-2016 Infrastructure improvements of ~$700 MM in • Reliability investment 2013-2016 Submitted clause recove
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Slide 13: 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 • 4.6 MM customer accounts • 24,653 MW in operation • $10.1 B in operating revenues • $36 B in total assets 13
Slide 14: Florida's economy continues to improve
Florida’s economy continues to improve Florida Economy Change from PY (%) Housing Starts(1) Florida Building Permits(2) 100% 12,000 FL 80% U.S. 10,000 Index 60% 40% 8,000 20% 6,000 0% -20% 4,000 -40% 2,000 -60% -80% 0 Jul-04 Jul-06 Jul-08 Jul-10 Jul-12 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-1
Slide 15: FPL has identified $4 B to $5 B in incremental capital expenditures
FPL has identified $4 B to $5 B in incremental capital expenditures over the next four years in addition to its ~ $9 B “baseline” case Incremental Capital Expenditures Through 2016 • Incremental storm hardening • Infrastructure / reliability investment • Generation upgrades $4 B - $5 B • Natural gas
Slide 16: Incremental Storm Hardening Investment
FPL filed a plan with the PSC to invest in storm hardening and reliability opportunities Incremental Storm Hardening Investment • FPL filed plans with the PSC to continue investing in strengthening the grid against storms and help keep everyday reliability high – Expect to invest ~$400 MM through 20
Slide 17: Natural Gas Pipeline Investments
FPL has completed its analysis of natural gas pipeline options 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 – Plus: Florida Southeast Connection (NextEra Ener
Slide 18: Generation Upgrades
Achieving improved environmental standards require replacement of FPL’s fleet of existing gas turbine peakers Generation Upgrades • Petition filed with FPSC to upgrade FPL’s peaking capacity with more efficient, advanced combustion turbines (CTs) – ~$820 million program • If approved by FPSC, costs
Slide 19: Service Territory Wholesale Power Sales
Wholesale deals can leverage FPL’s efficient generation resources and provide benefits to existing retail customers Service Territory Wholesale Power Sales Estimated Net Income • Opportunity to expand from Wholesale existing service territory $ MM – City of Vero Beach City Council $40 voted to appro
Slide 20: Solar Investment
FPL is exploring opportunities toward the end of our current settlement agreement to invest in incremental solar projects to provide additional fuel diversity in Florida Solar Investment DeSoto Solar Expansion • 25-50 MW solar PV project Manatee Solar • Potential for additional 275 MW • Potential fo
Slide 21: NextEra Energy Resources
NEXTera’ ENERGY & RESOURCES
Slide 22: Energy Resources' risk profile continues to improve
Energy Resources’ risk profile continues to improve as the business mix shifts to more long-term contracted assets Energy Resources’ Adjusted EBITDA(1) 100% 11% 15% 14% 75% 26% 22% 40% 50% 59% 64% 25% 49% 0% 2009 2012 2014 Long‐Term Contracted Merchant Peripheral Businesses In 2014, we expect 64% of
Slide 23: Contracted Assets: over 11,000 MW
Our generation portfolio consists of over 11,000 MW of contracted assets, which are primarily wind and nuclear Energy Resources: Contracted Assets(1) Technology MW Wind 8,213 Nuclear 1,621 Solar 193 Natural Gas 1,004 Total: 11,031 23 (1) As of December 31, 2012
Slide 24: Renewable Energy Development Opportunities
Energy Resources has strong renewable energy prospects beyond the current backlog Renewable Energy Development Opportunities Wind Solar • PTC extension creates an • Expect up to 300 MW of opportunity for new U.S. additional opportunities wind development through 2016 • Expect U.S. wind program – 40
Slide 25: Business mix shifts toward long-term contracted assets through 2016
The resulting business mix continues to shift toward long-term contracted assets through 2016 Energy Resources’ Adjusted EBITDA(1) 100% 11% 14% 15% 75% 22% 19% 40% 50% 64% 66% 25% 49% 0% 2009 2014 2016 Long‐Term Contracted Merchant Peripheral Businesses 25 (1) See Appendix for definition of Adjusted
Slide 26: NextEra Energy Transmission
NEXT@ra’ ENERGY &% TRANSMISSION
Slide 27: Lone Star Transmission
The Lone Star CREZ project in Texas is the cornerstone of our growing competitive transmission business Lone Star Transmission • COD March 2013 • 330-mile, 345-kV line and five substations in Texas • Fully energized on time and under budget • Total capital investment of approximately $760 MM • Autho
Slide 28: Competitive Transmission Opportunity Set
The overall market for new transmission projects is aligned regionally, with increasing opportunities to compete Competitive Transmission Opportunity Set • Competing for >$3 B of opportunities to be decided by 2014, including in: – Alberta – Hawaii – New England – New York • Recently awarded the 250
Slide 29: NextEra Energy Financial Review
NEXT@ra’ ENERGY &
Slide 30: Backlog supports 5% EPS CAGR through 2016
Our backlog supports reasonable expectations of a 5% CAGR through 2016; incremental investment could increase that to 7% NextEra Energy Adjusted Earnings Per Share Expectations $5.50 to $6.00 $4.57(1) 2012 Actual 2016 Adjusted EPS Expectation We anticipate 2013 adjusted EPS will be in the upper half
Slide 31: Credit metrics to return to historical levels by 2014
We expect our credit metrics to return to historical levels by 2014 NextEra Energy’s Credit Metrics(1) Adjusted Debt to Total Capital Adjusted FFO to Debt 53.0% 30.0% 52.0% 51.8% 25.2% 25.0% 52.0% 25.0% 51.0% 20.3% 20.0% 17.0% 50.0% 49.4% 15.0% 49.0% 48.3% 10.0% 48.0% 47.0% 5.0% 46.0% 0.0% 2009 2012
Slide 32: Financing Strategy: 2013 - 2016
We continue to expect to need up to $1.5 B of common equity in the 2014 time frame to support our growth objectives through 2016 Financing Strategy: 2013 - 2016 • At FPL: – Maintain consistent balance sheet ~60% regulatory equity ratio – Focus on long-dated maturities, but may selectively shorten up
Slide 33: Free cash flow position to improve every year
We expect our free cash flow position to improve every year NextEra Energy’s Free Cash Flow Before Dividends 2013 2014 2016 Operating Cash Flow $4.7 B to $4.9 B $5.6 B to $5.9 B $6.2 B to $6.6 B Capital Expenditures(1) ($5.0) B to ($5.7) B ($4.4) B to ($6.9) B ($2.8) B to ($4.9) B Other Investing $0
Slide 34: Market risk mitigated by significantly hedged position
Market risk is expected to be mitigated by our significantly hedged position over the next several years Energy Resources Equivalent Gross Margin Contracted or Hedged(1) 98% 100% 100% 100% 100% 100% 95% 92% 87% 80% 60% 40% 20% 0% 2013 2014 2015 2016 Existing New (1) Projected equivalent gross margin
Slide 35: Business mix shifting toward regulated and long-term contracted
NextEra Energy’s business mix is expected to continue to shift towards more regulated and long-term contracted Adjusted EBITDA(2) from Adjusted Earnings from Regulated and Long-Term Regulated Businesses(1) Contracted Operations 100% 100% 84% 78% 80% 80% 65% 58% 60% 60% 40% 40% 20% 20% 0% 0% 2011 201
Slide 36: Dividend policy reflects increase in regulated and contracted contribution
NextEra Energy’s current dividend policy reflects its expected increase in the proportionate contribution from its rate-regulated businesses and long-term contracted assets Dividend Per Share(1) Growth Dividend Policy • Implemented dividend policy 2011 to 2014 CAGR: ~10% $2.80 - $3.00 ? $2.64(2) of
Slide 37: NEXT@ra’
NEXT@ra’ ENERGY &
Slide 38: Appendix
NEXTera’ ENERGY 2 a Appendix
Slide 39: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ millions) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Net Income $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) losses as
Slide 40: Reconciliation of Adjusted EPS to Earnings Per Share
NextEra Energy, Inc. Reconciliation of Adjusted Earnings Per Share to Earnings Per Share 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Earnings Per Share (assuming dilution) $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-market (gains)
Slide 41: 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 42: Reconciliation of Adjusted Earnings to GAAP Net Income (6M 2012)
Reconciliation of Adjusted Earnings to GAAP Net Income (Six Months Ended June 30, 2012) Florida Power Energy Corporate & (millions, except per share amounts) & Light Resources Other NextEra Energy, Inc. Net Income (Loss) $ 592 $ 472 $ 4 $ 1,068 Adjustments, net of income taxes: Net unrealized mark-t
Slide 43: Reconciliation of Adjusted Earnings to GAAP Net Income (6M 2013)
Reconciliation of Adjusted Earnings to GAAP Net Income (Six Months Ended June 30, 2013) Florida Power Energy Corporate & (millions, except per share amounts) & Light Resources Other NextEra Energy, Inc. Net Income (Loss) $ 679 $ 189 $ 15 $ 883 Adjustments, net of income taxes: Net unrealized mark-to
Slide 44: Definitional information
Definitional information NextEra Energy Resources, LLC. Adjusted EBITDA Adjusted EBITDA includes Energy Resources’ consolidated investments as well as its share of earnings from equity method investments. Adjusted EBITDA for each category set forth above is represented by (a) revenue, including a pr
Slide 45: 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 46: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) failure or breach of NextEra Energy's information technology systems; risks to NextEra Energy's retail businesses of compromise of sensitive customer data; risks to NextEra Energy of volatility in the market values of deriv
Slide 47: NEXT@ra’
NEXT@ra’ ENERGY &
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