Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q2 2011 Earnings Presentation
43 slides from Nextera Energy's earnings presentation, Jul 27, 2011
Slide 1: Earnings Conference Call Second Quarter 2011
Earnings Conference Call Second Quarter 2011 July 27, 2011
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: Non-GAAP Financial Information
Non-GAAP Financial Information This presentation refers to adjusted earnings, which are not financial measurements prepared in accordance with GAAP. Adjusted earnings, as defined by NextEra Energy, represent net income before the mark-to-market effects of non-qualifying hedges and the net effect of
Slide 4: NextEra Energy's investments in clean, efficient, and renewable generation continue to drive solid results
NextEra Energy’s investments in clean, efficient, and renewable generation continue to drive solid results NextEra Energy Highlights – Second Quarter 2011 • Florida Power & Light – Nuclear uprates work ongoing Will reduce fuels costs for customers by roughly $4.6 to $4.8 billion over the life of the
Slide 5: The Port Everglades modernization would make FPL's generation fleet even more efficient
The Port Everglades modernization would make FPL’s generation fleet even more efficient FPL’s Fossil System Average Heat Rate(1) 10,000 9,635 21% effic ie ncy impr ovem 9,000 ent 8,445 Btu per kWh 8,000 7,900 7,600 7,000 6,000 2001 2006 2011 2016 Actual Actual Projected Projected 1) The 2001, 2006 a
Slide 6: Energy Resources' contracting momentum continued through the quarter
Energy Resources’ contracting momentum continued through the quarter NextEra Energy Highlights – Second Quarter 2011 • Energy Resources – Continued to be successful signing long-term contracts for new wind projects Signed 632 MW since the first quarter earnings call, including roughly 469 MW for pro
Slide 7: NextEra Energy's second quarter 2011 adjusted EPS were roughly 6% higher year over year
NextEra Energy’s second quarter 2011 adjusted earnings per share were roughly 6% higher year over year NextEra Energy Results – Second Quarter GAAP Adjusted Net Income EPS Earnings EPS ($ millions) ($ millions) $580 $1.38 $500 $1.18 $457 $1.11 $417 $1.01 2010 2011 2010 2011 2010 2011 2010 2011 7 See
Slide 8: FPL's earnings per share grew more than 12% year over year
FPL’s earnings per share grew more than 12% year over year Florida Power & Light Results – Second Quarter Net Income EPS ($ millions) $0.72 $301 $0.64 $265 2010 2011 2010 2011 8
Slide 9: FPL's earnings per share were driven by growth in its rate base
FPL’s earnings per share were driven by growth in its rate base FPL EPS Contribution Drivers Second Quarter FPL – 2010 EPS $0.64 Drivers: Rate base growth and other $0.06 Clause, primarily solar and nuclear uprates $0.02 AFUDC $0.01 Share dilution ($0.01) FPL – 2011 EPS $0.72 9
Slide 10: Amid the continuing economic recovery, key customer metrics are mixed
Amid the continuing economic recovery, key customer metrics are mixed Customer Characteristics – Second Quarter 2011 Retail kWh Sales Customer Growth(1) (Change vs. prior-year quarter) (Change vs. previous year) 100 Customer Growth 0.6% 80 60 + Usage Due to Weather 2.7% 40 28,500 # of Customers 20 +
Slide 11: Energy Resources continues to make significant progress on securing PPAs for new wind projects
Energy Resources continues to make significant progress on securing PPAs for new wind projects Energy Resources Overview • Secured approximately 632 MW of wind PPAs for new projects since the first quarter earnings call, including roughly 469 MW of projects planned for 2013 and 2014 COD • Closed the
Slide 12: Energy Resources' adjusted earnings declined due to extended nuclear refueling outages and impairment charges
Energy Resources’ adjusted earnings declined due to extended nuclear refueling outages and impairment charges Energy Resources’ Results – Second Quarter GAAP Adjusted Net Income EPS Earnings EPS ($ millions) ($ millions) $239 $0.57 $195 $0.48 $154 $0.38 $159 $0.37 2010 2011 2010 2011 2010 2011 2010
Slide 13: Energy Resources experienced a strong wind resource and positive contributions from new asset additions
Amid certain challenges, Energy Resources experienced a strong wind resource and positive contributions from new asset additions Energy Resources Adjusted EPS Contribution Drivers – 2011 Second Quarter Energy Resources – 2010 Adjusted EPS $0.48 Drivers: New investments $0.03 Existing assets $0.00 Cu
Slide 14: Energy Resources has substantial wind and solar investments planned for 2011 through 2014
Energy Resources has substantial wind and solar investments planned for 2011 through 2014 for which it has already secured long-term power purchase agreements Estimated Capital Expenditures for Projects with a PPA(1) MW 2011 - 2012 2013 - 2014 Wind ($MM) ($MM) U.S. 969 $1,250 - $1,350 $25 - $75 Cana
Slide 15: NextEra Energy's adjusted earnings per share grew by roughly 6% year over year
NextEra Energy’s adjusted earnings per share grew by roughly 6% year over year NextEra Energy EPS Summary – Second Quarter 2011 GAAP 2010 2011 Change FPL $0.64 $0.72 $0.08 Energy Resources $0.38 $0.57 $0.19 Corporate and Other ($0.01) $0.09 $0.10 Total $1.01 $1.38 $0.37 Adjusted 2010 2011 Change FPL
Slide 16: NextEra Energy's adjusted EPS expectations for 2011
NextEra Energy’s adjusted EPS expectations for 2011 Adjusted Earnings Per Share Expectations 2011 $4.35 - $4.65 Long-term, average annual adjusted EPS growth expected to be 5% to 7% through 2014, from a 2011 base NextEra Energy’s adjusted earnings expectations exclude the cumulative effect of adopti
Slide 17: NextEra Energy logo
NEX Tera ENERGY &
Slide 18: Q&A Session
18 Q&A Session NExTera’ ENERGY 2
Slide 19: NextEra Energy logo
NEX Tera ENERGY &
Slide 20: Appendix
20 Appendix NExTera’ ENERGY 2
Slide 21: 2011 Portfolio Financial Information
2011 Portfolio Financial Information Equivalent Equivalent (1) (2) (2) (3) (4) Expected Gross Margin % Gross EBITDA Remaining Following Generation Range Margin Range Contract Year PTC MWs Mwh's $ in millions Hedged $ in millions Life Expiration (6) Contracted Wind Midwest 2,576 8,614,413 $555 - $585
Slide 22: 2012 Portfolio Financial Information
2012 Portfolio Financial Information Equivalent Equivalent (1) Expected Gross Margin(2) % Gross EBITDA(2) Remaining(3) Following(4) Generation Range Margin Range Contract Year PTC MWs Mwh's $ in millions Hedged $ in millions Life Expiration (6) Contracted Wind Midwest 2,576 9,319,329 $585 - $615 99%
Slide 23: Wind Resource Performance
Wind Resource Performance Gross(1) MWh Production: Actual vs. Long-Term Expected Average (Fifteen-month trend ended June 30, 2011(2)) 1) MWh production from wind resource prior to reductions for actual and planned outages and curtailments. 2) Includes incremental new wind investment beginning in the
Slide 24: NextEra Energy Resources – Wind Portfolio Locations
NextEra Energy Resources – Wind Portfolio Locations(1) June 30, 2011 Mount Copper Mount Miller Ghost Pine Ashtabula II Midwest Baldwin West Oliver County I&II Wilton I&II Langdon I&II Pubnico Point Ashtabula I&III Stateline North Dakota South Dakota Mower County Butler Ridge Northeast Vansycle I & I
Slide 25: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 3/31/11 $116.8 Primary Drivers: Amounts Realized During 2nd Quarter (19.3) Revenue Hedges – Gas Change in Forward Prices (all positions) 97.4 & Power Prices $118.6 Subtotal 78.1 All Other – Net (21
Slide 26: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) 1st Quarter 2nd Quarter Asset / Deals Asset / Deals Asset / (Liability) Change in Executed Total (Liability) Change in Executed Total (Liability) Balance Amounts Forward During Unrealized Balance Amounts Forward During Unrealized
Slide 27: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges(1) – Summary of Forward Maturity ($ millions, after-tax) Gain / (Loss) (2) Asset / (Liability) Balance Total Description 6/30/11 2011 2012 2013 2014 2015 - 2032 2011 - 2032 Natural gas related positions $ 208.9 $ (46.6) $ (56.8) $ (27.1) $ (30.0) $ (48.4) $ (208.9) Spark spread
Slide 28: Reconciliation of Adjusted Earnings to GAAP Net Income (Q2 2011)
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Three Months Ended June 30, 2011) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 301 $ 239 $ 40 $ 580 Adjustments, net of income taxes: Net unrealized
Slide 29: Reconciliation of Adjusted Earnings to GAAP Net Income (Q2 2010)
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Three Months Ended June 30, 2010) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 265 $ 154 $ (2) $ 417 Adjustments, net of income taxes: Net unrealize
Slide 30: Cautionary Statement And Risk Factors That May Affect Future Results
Cautionary Statement And Risk Factors That May Affect Future Results In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), NextEra Energy, Inc. (NextEra Energy) and Florida Power & Light Company (FPL) are hereby providing cautionary state
Slide 31: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NextEra Energy’s and FPL’s financial results could be negatively affected if they or their rate-regulated businesses are unable to recover, in a timely manner, certain costs, a return on certain assets or an appropriate ret
Slide 32: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NextEra Energy and FPL operate in a changing market environment influenced by various legislative and regulatory initiatives, including, for example, initiatives regarding regulation, deregulation or restructuring of the
Slide 33: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) require significant capital investment in carbon capture and storage technology, fuel switching, or the replacement of high-emitting generation facilities with lower-emitting generation facilities; or affect the availab
Slide 34: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NextEra Energy’s and FPL’s operating results could suffer if they do not proceed with projects under development or are unable to complete the construction of, or capital improvements to, generation, transmission, distribut
Slide 35: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) dependence on a specific fuel source. The occurrence of any of these effects or events could result in, among other matters, lost revenues due to prolonged outages, increased expenses due to monetary penalties or fines, r
Slide 36: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NextEra Energy depends upon power transmission and natural gas transportation facilities owned and operated by others. If transmission or transportation of sufficient power or natural gas is unavailable or disrupted, Next
Slide 37: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) such as mandated energy efficiency measures, demand side management goals, and economic and demographic conditions, such as population, job and income growth, housing starts and new business formation. NextEra Energy’s and
Slide 38: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The inability of subsidiaries that have existing project-specific financing arrangements to meet the requirements of various agreements relating to those financings could give rise to a project-specific financing default
Slide 39: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NextEra Energy is an active participant in energy markets. The liquidity of regional energy markets is an important factor in the company's ability to manage risks in these operations. Over the past several years, other m
Slide 40: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) ability to pay upstream dividends or to repay funds to NextEra Energy. The subsidiaries have financial obligations, including, but not limited to, payment of debt service, which they must satisfy before they can fund NextEr
Slide 41: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NextEra Energy and FPL add, modify and replace information systems on a regular basis. Modifying existing information systems or implementing new or replacement information systems is costly and involves risks, including,
Slide 42: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The ability of NextEra Energy and FPL to obtain insurance and the terms of any available insurance coverage could be adversely affected by international, national, state or local events and company-specific events, as well
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