NextEra Energy, Inc. · NYSE:NEE
NextEra Energy — Debt Investor Presentation (May 2012)
25 slides from NextEra Energy's debt investor presentation, May 7, 2012
Slide 1: Fixed Income Investor Meeting: Equity Units, DOE Loan Guarantees, Credit Diversification
Fixed Income Investor Meeting Equity Units, DOE Loan Guarantees, Credit Diversification Amy Black Assistant Treasurer May 7, 2012
Slide 2: Agenda
Agenda • Equity Units • DOE Loan Guarantee Program and Projects • International Funding and Credit Diversification 2
Slide 3: Common Forms of Equity Issuance
Companies use various forms of equity to support their capital structure Common Forms of Equity Issuance • Straight Common Issuance – Marketed or Bought • Forward Sale • Convertible Bond • Mandatory / Equity Units – Marketed or Bought – Retail or Institutional • Dribble/At-the-Market – In 2009 and 2
Slide 4: Equity units common capital raising tools within the power industry
Equity Units and other equity related products are common capital raising tools used within the power industry Recent Utility Equity Transactions(1) Deal Value Pricing Date Issuer Name (in $MM) Deal Type 4/10/2012 PPL Corp 269 Forward Trade 3/5/2012 Pepco Holding Inc 345 Forward Trade 1/27/2012 Domi
Slide 5: Equity Unit Structure
We utilize equity units as a method to raise equity capital to support our capital structure Equity Unit Structure • An Equity Unit is comprised of two distinct securities – A 3-year forward contract where the investor is obligated to purchase shares of NextEra common equity Includes a conversion pr
Slide 6: Equity Units provide forward stock sale with proceeds today
Equity Units provide for a forward stock sale, but with proceeds to the issuer today, and issuer retains a portion of the stock appreciation Illustrative Example: Conversion of 2009 Equity Units(1) Amount • May 2009: Issued 7 million units $350 million Stock Price: $55.67 20% Conversion Premium / $6
Slide 7: Equity unit issuances over the past 10 years
We have issued equity units five times over the past 10 years, raising $2.4 billion of common equity Summary of Equity Unit Transactions Issue Date Feb-02 Jun-02 May-09 Sept-10 May-12 Proceeds at $575 MM $506 MM $350MM $402MM $600MM Issuance Coupon 8.50% 8.00% 8.375% 7.00% 5.599% Conversion 18% 20%
Slide 8: Equity Units provide many benefits to the issuer
Equity Units provide many benefits to the issuer Benefits of Equity Units • Accounting – Product receives Treasury Stock Method of accounting, which is the least dilutive accounting treatment – Except for the potential of minimal dilution, shares are not recognized for EPS purposes until the forward
Slide 9: Agenda
Agenda • Equity Units • DOE Loan Guarantee Program and Projects • International Funding and Credit Diversification 9
Slide 10: DOE loan guarantee program for two large solar projects
Last year we utilized the DOE loan guarantee program for two of our large solar projects Summary of DOE 1705 Loan Guarantee Programs • The American Recovery and Reinvestment Act of 2009 amended the Loan Guarantee Program by adding Section 1705 – Temporary program designed to stimulate the US economy
Slide 11: Genesis solar project awarded DOE loan guarantee
Our Genesis solar project was awarded a DOE loan guarantee in August 2011 Genesis Project Overview • 250 MW, solar thermal project comprised of two 125MW units • PPA Offtaker/tenor: PG&E/25 yr • Total Capital Cost: $1.2 billion • NextEra is the EPC • Expected Commercial Operation Date (COD) November
Slide 12: Genesis construction schedule on track
Project construction schedule is on track to meet major milestones Summary of Construction-to-Date(1) • Overall Project – Engineering: 65% complete – Procurement: 75% complete – Total Project Construction: 14% complete • Genesis Unit #1 – Site Preparation: 85% Solar Collection Assembly, Installed in
Slide 13: Desert Sunlight awarded DOE loan guarantee
The Desert Sunlight solar facility was also awarded a DOE loan guarantee in September 2011 Desert Sunlight Project Overview • 550 MW, solar photovoltaic (PV) project using First Solar panels – 8.5 million panels covering 4,000 acres – PPA Offtaker/tenor: PG&E on 300MW, 25 year SCE on 250 MW, 20 year
Slide 14: Desert Sunlight financing overview
Desert Sunlight was structured as a bond and bank transaction, providing construction and term financing Desert Sunlight Financing Overview • $1.4 billion debt of which 80% is guaranteed by the Department of Energy – $744 million 25-year Bond with delayed draw Tranche 1 $260 million drawn at financi
Slide 15: Desert Sunlight Debt Financing Structure
Desert Sunlight Debt Financing Structure $280MM Letters of Credit Desert Sunlight 250 Desert Sunlight 300 80% Guarantee of (“250 Borrower”) (Bifurcated btw. (“300 Borrower”) Principal and Interest Borrowers) by the U.S. Department of Energy $744MM $425MM $330MM Lender Trust A-1 (1) Lender Trust A-2
Slide 16: Desert Sunlight on schedule for major milestones
The Desert Sunlight project is on schedule for meeting major milestones Summary of Construction-to-Date(1) • Project consists of 20 blocks, each block ranges in size from 20- 40 MW • Construction underway in the first 2 blocks - each 40 MW • PGE (300 MW) – 11 Blocks – Block 1: 53% complete – Block 2
Slide 17: Two solar projects located in Southern California
These two solar projects are both located in Southern California, where we have other renewable operations These projects are being built in an area of the country that is supportive of renewable power and we have experience with our existing portfolio 17
Slide 18: Agenda
Agenda • Equity Units • DOE Loan Guarantee Program and Projects • International Funding and Credit Diversification 18
Slide 19: Global diversification of credit and funding sources
NextEra Energy employs global diversification of credit and funding sources Country Breakdown by Funding Norway UK $0.2 billion $1.4 billion Canada Japan $1.5 billion Germany $3.3 billion $1.5 billion France Switzerland $1.3 billion Spain $0.6 billion U.S. $3.1 $2.9 billion $1.4 billion China US $2.
Slide 20: Capital funding diversification is key to financial strategy
Capital funding diversification is the key to NextEra’s financial strategy International Funding Opportunities • International funding diversification has been a priority for NextEra, even before the 2008 global financial crisis • Our strong banking relationships have enabled us to pursue local lend
Slide 21: Asian Opportunities - Japan
We have been very successful in the Asian market, both for funding and general credit requirements Asian Opportunities - Japan • ¥26.5 billion 3-year regional bank loan closed in December 2008 – 8 Japanese banks participated, swapped to US$287 million • ¥34 billion refinancing of 2008 regional bank
Slide 22: Asian Opportunities - China
More recently, Chinese banks have taken an active role in US financing activities Asian Opportunities - China • We have formed strong relationships with many of the large Chinese banks • As the Chinese gain market share in the renewables industry, we see value in partnering with Chinese banks and ma
Slide 23: 2010 Global Credit Facilities
Based on our growing relationship with Asian banks, in 2010 we entered into new credit facilities targeting global banks 2010 Global Credit Facilities • $500 million 3-year credit facility at both FPL and Capital Holdings • Focused on new international relationships in an effort to expand number of
Slide 24: Relationships with many of the largest banks in the world
We receive credit, and have relationships with, many of the largest banks in the world Global Bank Ranking (1) Largest Global Banks by Total Assets Total Assets Total Assets Rank Bank ($Bn) Rank Bank ($Bn) 1 Deutsche Bank 2,805 26 Intesa Sanpaolo 828 2 BTMU 2,799 27 RBC 812 3 HSBC 2,556 28 BBVA 775
Slide 25: NextEra Energy
NExTera’ ENERGY @
NextEra Energy — Debt Investor Presentation (May 2012) on 6ix