Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — 2012 Credit Suisse Energy Summit
41 slides from Nextera Energy's conference presentation, Feb 7, 2012
Slide 1: 2012 Credit Suisse Energy Summit
2012 Credit Suisse Energy Summit Moray Dewhurst Vice Chairman and CFO February 7, 2012
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: …with highly visible growth prospects…
…with highly visible growth prospects… FPL Energy Resources Rate base growth… Largest ever renewable backlog… $B % 14: 8.1 • 1,150 to 1,500 MW of contracted U.S. $30.0 011-20 ted C AGR 2 $25.0 Estima wind $20.0 • 850 to 950 MW of solar $15.0 • Approximately 600 MW of Canadian $10.0 wind $5.0 • All e
Slide 5: …a foundation of operational excellence and financial strength…
…a foundation of operational excellence and financial strength… SAIDI: System Average (1) Interruption Duration Index Utility Credit Ratings(2) Minutes 175 Good NextEra 150 Industry Average Energy 30% 125 26% 100 25% 24% 75 FPL 50 20% 25 20% 17% '03 '04 '05 '06 '07 '08 '09 '10 '11 15% Fossil Reliabi
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 2010 Fuel Mix SO2 Emissions Rates Hydro (MWh) (Lbs/MWh) 1.0% Solar 16 0.2% Nuclear Wind 26.4% 12 Coal 11.9% 3.6% 8 NextEra Oil Energy 2.7% Natural Gas 4 54.2% 0 NOx Emissions Rates CO2 Emissions Rates 4
Slide 7: …and 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) : 6.9% CAGR $4.30 $4.39 : 9.0% $3.84 $4.05 CAGR $19.5 $21.8 $3.49 $17.7 $14.8 $15.9 $3.04 $13.8 $11.6 $12.3 $2.49 $2.63 $10.0 $10.8 $2.41 $2.48 '02 '03 '04 '05 '0
Slide 8: Over an extended period of time, we have been successful in attaining our goal of outperforming our industry
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-Year CAGR S&P 500 NextEra Electric Energy Utility Adjusted EPS Growth (2000-2010)(1) 3.4% 7.0% Dividends per Share Growth (2001-201
Slide 9: FPL
PL...
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: We deliver excellent value
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 Industry Average O&M ¢ / retail $1.75 1.65¢ kWh 1.54¢ $1.50 1.46¢ FPL(1) $1.25 $1.00 (1) Sources: Ventyx (FERC Form 1) and FPL O&M reported annually in the 10-K; Note: 1)
Slide 13: We are investing heavily to improve long-term customer value without driving up customer bills
We are investing heavily to improve long-term customer value without driving up customer bills FPL’s Capital Expenditures(1) $3.5 $3.0 $2.5 $ B $2.0 $1.5 $1.0 $0.5 $- 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E FPL’s Major Capital Projects Estimated Approx. Project Name Fuel
Slide 14: FPL will file for rate relief in 2012
FPL will file for rate relief in 2012 FPL 2012 Base Rate Proceeding • Capital investments (averaging $3 B per year between 2011 and 2013) improve system heat rate, lower fuel consumption – Investments benefit customers through lower fuel costs • Test Year Letter filed January 17, 2012 • Estimated $6
Slide 15: Base rate impacts are expected to be offset by improved system efficiency and lower fuel prices
Base rate impacts are expected to be offset by improved system efficiency and lower fuel prices FPL Base Rate Request: Bill Impacts • Base rates estimated to go up $6.80 per month(1), or 23 cents per day • Total typical residential bill is currently projected to go up about $3.00 per month(1), or no
Slide 16: FPL expects new rates to be effective on January 1, 2013
FPL expects new rates to be effective on January 1, 2013 Estimated FPL Rate Proceeding Timeline Late Late Q2 January 1, Q1 Q2 Early Q3 Q3 Q4 2013 File formal Quality of Intervenor, Final New rates staff, and FPL Rate rate request service decision by effective rebuttal hearings (testimony; hearings P
Slide 17: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 18: Our strategy at Energy Resources has always been to build around our 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: We have built 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 Energy Resources Capacity Growth – 2002-2011 Adjusted Earnings(1) $ MM R: 21.0% CAG 792 800 1/01/02 Capacity 5,063 MW 737 679 Greenfield Development 10,516 MW 553 449 Asset Acquisitions 3,722 MW 258 Sales and Oth
Slide 20: 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 EPS $12 $0.02 $0.02 $0.04 $0.09 $0.06 $0.09 Impact $ MM $10 $40 $37 $35 $35 $8 $30 $26 $25 $6 $20 $16 $15 $4 $9 $9 $10 $5 $2 $0 12 10 11 06 07 08 09 02 03 04 05 2009 2010 2011 2012E 2013E
Slide 21: …but supported by the largest backlog of renewable projects in our history
…but supported by the largest backlog of renewable projects in our history Estimated Capital Expenditures for Projects with a PPA(1) $4.2 B - $4.6 B Solar $2.1 B - $2.3 B $2.6 B - $3.0 B Solar $1.3 B - $1.5 B Wind $2.1 B - $2.3 B Wind $1.3 B - $1.5 B 2011-2012 2013-2014 In total, Energy Resources ha
Slide 22: 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 23: Lone Star Transmission
L®NEStar @nestar
Slide 24: Successful development of 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 25: Investment opportunities form the basis for expected adjusted EPS 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 A GR $4.00 C % 6.3 $3.00 $2.38 $2.00 $1.00 $0.00 2001 2011 2014E Note: See Ap
Slide 26: An attractive option
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 - $4.0 B Investing • Reduced free cash flow Free Cash Flow
Slide 27: Business mix is expected to shift to a more regulated and long-term contracted business by 2014
NextEra Energy’s business mix is expected to shift to a more regulated and long-term contracted business by 2014 Adjusted EBITDA(1) from Adjusted Earnings from Regulated and Long-Term Regulated Businesses Contracted Operations 100% 100% 84% 78% 80% 80% 65% 58% 60% 60% 40% 40% 20% 20% 0% 0% 2011 2014
Slide 28: NextEra Energy's cash quality of earnings is comparable to other utilities'
NextEra Energy’s cash quality of earnings is comparable to other utilities’ S&P 500 Electric Utility Index Companies Ratio of Cash Flow to Adjusted Earnings – 3-Yr Avg. (2008-2010)(1) Cash Flow to Adjusted Earnings Cash Flow to Adjusted Earnings Including Deferred Taxes(2) Excluding Deferred Taxes(3
Slide 29: Closing Summary
Closing Summary • Visible growth prospects • A solid foundation – Operational excellence – Financial strength – Clean emissions profile • Proven track record of success – Building businesses – Delivering growth – Creating shareholder value 29
Slide 30: Achievement of 2012 key objectives sets the stage for growth through 2014
Achievement of NextEra Energy’s 2012 key objectives sets the stage for growth through 2014 Critical Success Factors for 2012 • At FPL: – Continue to deliver outstanding customer value – Continue execution on major capital projects – Achieve satisfactory outcome of base rate case • At Energy Resource
Slide 31: NEX Tera
NEX Tera ENERGY &
Slide 32: Appendix
NEXTera’ ENERGY a Appendix
Slide 33: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ 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 34: 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 $4.59 Adjustments: Net unrealized mark-to-market (gains)
Slide 35: NextEra Energy Resources Reconciliation of Adjusted Earnings to Net Income
NextEra Energy Resources, LLC Reconciliation of Adjusted Earnings to Net Income ($ 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 36: 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 37: 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 (1) Net income $1,923 ($86) $1,837 Add back interest 1,034 0 1,034 (1) Add back income taxes 529 (57) 472 Add back d
Slide 38: Reconciliation of Cash Flow/Adjusted Earnings (Including Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Including Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income(1) Ratio 2008 2009 2010 Average 2008 2009 2010 Average Adjusted Cash Flow $3,556 $3,686
Slide 39: Reconciliation of Cash Flow/Adjusted Earnings (Excluding Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Excluding Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income(1) Ratio 2008 2009 2010 Average 2008 2009 2010 Average Adjusted Cash Flow $2,987 $3,413
Slide 40: Cautionary Statements and Risk Factors That May Affect Future Results
Cautionary Statements 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, b
Slide 41: NEX Tera
NEX Tera ENERGY &