Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q2 2012 Earnings Presentation
34 slides from Nextera Energy's earnings presentation, Jul 26, 2012
Slide 1: Earnings Conference Call Second Quarter 2012
Earnings Conference Call Second Quarter 2012 July 26, 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: Overview: Solid performance; on track to meet expectations
Overview: Solid performance; on track to meet expectations 2012 Second Quarter Highlights • Solid financial results, consistent with expectations – FPL regulatory capital employed increased 17.5% over the comparable quarter in 2011 – FPL regulatory ROE 11% • Florida economic indicators are mixed • F
Slide 4: FPL's investments helped produce solid earnings growth during the quarter
FPL’s investments that benefit customers helped produce solid earnings growth during the quarter Florida Power & Light Results – Second Quarter Net Income EPS ($ MM) $0.85 $353 $0.72 $301 2011 2012 2011 2012 4
Slide 5: FPL's earnings per share grew 13 cents over the comparable quarter
FPL’s earnings per share grew 13 cents over the comparable quarter, driven primarily by continued investment in the business Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Invested(1) Second Quarter $B FPL – 2011 EPS $0.72 $25.0 $24.8 Drivers: $21.1 $20.0 New investment
Slide 6: Trends in employment and building permits continue to be positive
Trends in employment and building permits continue to be positive Florida Economy Florida Unemployment Rate(1) $B Tourism Taxable Sales(2) (12 month moving sum) 12% $70 11% $68 10% $66 9% 8% $64 7% $62 6% $60 5% $58 4% 3% $56 2% $54 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-07 Jan-08 Jan-09 Jan-
Slide 7: FPL's volume metrics continue to improve slowly
FPL’s volume metrics continue to improve slowly Customer Characteristics – Second Quarter 2012 Retail kWh Sales (1) Customer Growth(2) (Change vs. prior-year quarter) (Change vs. previous year) 100 Customer Growth 0.6% 80 + Usage Due to Weather -7.0% 60 # of + Underlying Usage Growth, mix and Other
Slide 8: FPL rate case is proceeding; technical hearing scheduled for August 20th
FPL rate case is proceeding; technical hearing scheduled to begin August 20th 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 Canavera
Slide 9: FPL's base rate increase request is significantly offset by fuel reductions
FPL’s base rate increase request is significantly offset by reductions in the fuel portion of the bill FPL Base Rate Request: Bill Impact(1) Base Portion of Bill Total Bill $100 $100 $94.62 $96.03 $90 $90 $80 $80 $70 $70 $60 $60 $52.99 $54.28 $50.35 $50 $43.26 $50 $40 $40 $30.87 $30 $26.60 $30 $20 $
Slide 10: Energy Resources' adjusted earnings increased four cents
Energy Resources’ adjusted earnings increased four cents over the comparable quarter in 2011 Energy Resources Results(1) – Second Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $0.60 $251 $0.57 $239 $173 $159 $0.41 $0.37 2011 2012 2011 2012 2011 2012 2011 2012 10 (1) See Appendix
Slide 11: Energy Resources' adjusted EPS contribution drivers
Energy Resources’ adjusted earnings increased four cents over the comparable quarter in 2011 Energy Resources Second Quarter Adjusted EPS(1) Contribution Drivers $0.60 $0.03 $0.01 $(0.09) $0.09 $0.41 $0.40 $0.37 $0.20 $0.00 Q2 2011 Interest, G&A, New Gas Infrastructure Existing Q2 2012 Adjusted EPS
Slide 12: Energy Resources continues to make good progress developing its record backlog
Energy Resources continues to make good progress in developing its record backlog of renewable projects NextEra Energy Resources: Development Highlights • Continue to execute on development of backlog: – Approximately 1,300 MW of U.S. wind in 2012 177 MW in service in Q1 Majority scheduled to enter
Slide 13: NextEra Energy's adjusted EPS increased eight cents
NextEra Energy’s adjusted earnings per share increased eight cents over the comparable period in 2011 NextEra Energy EPS Summary(1) – Second Quarter GAAP 2011 2012 Change FPL $0.72 $0.85 $0.13 Energy Resources $0.57 $0.60 $0.03 Corporate and Other $0.09 $0.00 ($0.09) Total $1.38 $1.45 $0.07 Adjusted
Slide 14: Summary of NextEra Energy's Capital Plans
We expect to continue accessing a diverse group of financial instruments in 2012 Summary of NextEra Energy’s Capital Plans • Remain focused on maintaining solid credit metrics • On track with 2012 financing plans • Expect to be free cash flow positive in 2014, based on current capital plans (“backlo
Slide 15: Adjusted Earnings Per Share Expectations
Adjusted Earnings Per Share Expectations 2012 $4.35 - $4.65 2014 $5.05 - $5.65 NextEra Energy’s adjusted earnings expectations exclude the cumulative effect of adopting new accounting standards, the unrealized mark-to-market effect of non-qualifying hedges, and net other than temporary impairment lo
Slide 16: Critical Success Factors for 2012
Achievement of NextEra Energy’s 2012 key objectives sets the stage for continued growth 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:
Slide 17: NextEra Energy outperformed the S&P 500 and S&P Utilities Index
During Lew Hay’s tenure as CEO, NextEra Energy significantly outperformed both the S&P 500 and the S&P Utilities Index 11-year Total Shareholder Return(1) (June 12, 2001 – June 29, 2012) $B 300% $30,000 250% 236% $6,683 $24,667 $25,000 200% $20,000 $17,984 150% $15,000 100% $10,000 50% 47% $5,000 35
Slide 18: NEXT@Cra’
NEXT@Cra’ ENERGY &
Slide 19: Q&A Session
19 Q&A Session NEXTera’ ENERGY 2
Slide 20: NEXT@Cra’
NEXT@Cra’ ENERGY &
Slide 21: Appendix
21 Appendix NEXTera’ ENERGY 2
Slide 22: 2012 Portfolio Financial Information
2012 Portfolio Financial Information (as of June 7, 2012) Equivalent Equivalent Equivalent 1 1 2 3 Expected Gross Margin % Gross EBITDA Remaining Following Generation Range Margin Range Contract Year PTC MWs Twh's $ in millions Hedged $ in millions Life Expiration Contracted Wind4 6,863 21.0 $1,315
Slide 23: Energy Resources' existing assets are largely contracted or hedged for 2012
Energy Resources’ existing assets are largely contracted or hedged for 2012 2012 Equivalent Gross Balance of Year 2012 Margin Contributions(1) Portfolio Sensitivities 6% New Investments(5) • $1/MMBtu change in natural gas ≈ 3-4 cents in 11% Other (2) adjusted EPS(3) 54% 29% Contracted Merchant Asset
Slide 24: 2013 Portfolio Financial Information
2013 Portfolio Financial Information (as of June 7, 2012) Equivalent Equivalent Equivalent 1 1 2 3 Expected Gross Margin % Gross EBITDA Remaining Following Generation Range Margin Range Contract Year PTC MWs Twh's $ in millions Hedged $ in millions Life Expiration Contracted Wind4 6,863 21.7 $1,305
Slide 25: Energy Resources' existing assets are largely contracted or hedged for 2013
Energy Resources’ existing assets are largely contracted or hedged for 2013 2013 Equivalent Gross Margin Contributions(1) 2013 Portfolio Sensitivities 15% New Investments(5) • $1/MMBtu change in natural gas ≈ 4-5 cents in 10% 48% Other(2) Contracted adjusted EPS(3) Assets (97% hedged) 26% Merchant •
Slide 26: Wind Resource Performance
Wind Resource Performance Gross(1) MWh Production: Actual vs. Long Term Expected Average (Fifteen-month trend ended June 30, 2012(2)) 2011 2012 2nd QTR YTD 3rd QTR 4th QTR YTD 1ST QTR 2nd QTR YTD Location 3 MW Apr May Jun QTR % MW % MW % % MW % MW Apr May Jun QTR % Midwest 2,715 91% 102% 104% 98% 93
Slide 27: NextEra Energy Resources – Wind Portfolio Locations
NextEra Energy Resources – Wind Portfolio Locations(1) June 30, 2012 Mount Copper 54mw Mount Miller 54mw Ghost Pine 81.6mw Ashtabula II 120mw Baldwin 102.4mw Oliver County I&II Midwest 2,865 MW 50.6mw / 48mw West 2,472 MW Wilton I&II Langdon I&II 49.5mw / 49.5mw 118.5mw / 40.5mw Pubnico Point 30.6mw
Slide 28: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ MM, after-tax) Asset/(Liability) Balance as of 3/31/12 $473.4 Amounts Realized During 2nd Quarter (35.4) Primary Drivers: Revenue Hedges – Gas Change in Forward Prices (all positions) 98.4 & Power Prices $76.2 Subtotal – Income Statement 63.0 All Oth
Slide 29: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ MM, 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 Balan
Slide 30: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges(1) – Summary of Forward Maturity ($ MM, after-tax) Gain / (Loss) (2) Asset / (Liability) Balance Total Description 6/30/12 2012 2013 2014 2015 2016 - 2032 2012 - 2032 Natural gas related positions $ 707.1 $ (103.7) $ (121.3) $ (111.1) $ (93.0) $ (278.0) $ (707.1) Spark spread r
Slide 31: Reconciliation of Adjusted Earnings to GAAP Net Income
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 32: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Three Months Ended June 30, 2012) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 353 $ 251 $ 3 $ 607 Adjustments, net of income taxes: Net unrealized
Slide 33: 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 34: 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