Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Wolfe Trahan & Co. Power & Gas Deep Dive Conference 2013
48 slides from Nextera Energy's conference presentation, Apr 11, 2013
Slide 1: Wolfe Trahan & Co. Power & Gas Deep Dive Conference
Wolfe Trahan & Co. Power & Gas Deep Dive Conference Armando Pimentel President and CEO, Energy Resources April 11, 2013
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
Slide 3: 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… • $32.8 B market capitalization(1) • 41,828 MW in operation • $64 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 4: Built on a foundation of operational excellence and financial strength
…built on a foundation of operational excellence and financial strength… SAIDI: System Average (1) Interruption Duration Index Utility Credit Ratings(3) Minutes 150 FL Industry Average Good 30% 28% 125 NextEra Energy 100 FPL 25% 23% 75 21% 50 20% 25 16% '06 '07 '08 '09 '10 '11 '12 15% Fossil Reliabi
Slide 5: One of the cleanest emissions profiles among the nation's top 50 power producers
…with 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% 1.5 0.0 3.5 NO
Slide 6: 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) $25.1 $4.57 $21.7 $4.30 $4.39 $19.5 $3.84 $4.05 $17.7 $3.49 $15.9 $3.04 $13.8 $14.8 $2.63 $11.6 $12.3 $2.41 $2.48 $2.49 $10.0 $10.8 '02 '03 '04 '05 '06 '07 '08 '0
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Slide 8: 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 • 24,057 MW in operation • $10.1 B in operating revenues • $34.9 B in total assets 8
Slide 9: Florida PSC approved FPL's settlement agreement in December 2012
In December 2012, the Florida Public Service Commission voted unanimously to approve FPL’s settlement agreement Overview of Settlement Agreement • Effective for a four-year term beginning January 1, 2013 through December 31, 2016 • Base rate adjustment increase of $350 MM effective January 2013 and
Slide 10: Settlement provides a four-year window for productivity improvements
The settlement approved in December provides a four-year window for productivity improvements FPL Efficiency Opportunities • Identified several initiatives with significant O&M cost savings in the following areas: – Nuclear operations – Transmission and distribution – Staff functions • Focused on id
Slide 11: FPL potential incremental capital expenditures over the next four years
FPL has identified potential incremental capital expenditures over the next four years in addition to its “baseline” case Incremental Capital Expenditures Through 2016 • Incremental storm hardening • Infrastructure / reliability investment • Generation upgrades ~ $4 B to $5 B in • Natural gas pipeli
Slide 12: FPL opportunity to invest in a new natural gas pipeline
FPL has an opportunity to invest in a new natural gas pipeline to meet future gas requirements while increasing the reliability and diversity of FPL’s gas transportation portfolio Natural Gas Pipeline Investment • FPL’s current request for proposal includes a two- Butler, AL segment approach for New
Slide 13: NextEra Energy Resources
NEXTeCra’ ENERGY &% RESOURCES
Slide 14: What is Energy Resources?
What is Energy Resources? A Set of Skills + A Set of Assets • Largest greenfield developer in • Largest wind and solar renewable North America over the last decade portfolio in North America – Over 12,000 MW of greenfield • Over 11,000 MW of stable long- development term contracted projects • #1 in
Slide 15: EBITDA mix continues to shift to long-term contracted assets
Our EBITDA mix continues to shift to 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 Energy Resources’ adjusted EBITDA to come from lo
Slide 16: Consciously shifting the focus of our portfolio
We have been consciously shifting the focus of our portfolio Energy Resources’ Adjusted EBITDA(1) 100% 11% 15% 14% 75% 22% 40% 26% 50% 59% 64% 25% 49% 0% 2009 2012 2014 Long-Term Contracted Merchant Peripheral Businesses 16 (1) See appendix for definition of adjusted EBITDA
Slide 17: Generation portfolio of over 11,000 MW of contracted assets
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 17 (1) As of December 31, 2012
Slide 18: Backlog of signed PPAs translates into roughly $3.6 B of capital investment
Our current backlog of signed long-term PPAs for wind and solar projects translates into roughly $3.6 B of capital investment through 2016 Estimated Cap Ex(1) for Wind Current Backlog and Solar Projects in Backlog ($MM) • ~600 MW Canadian wind $2,000 program $1.7-1.9 B • 175 MW of new 2013 U.S. $1,5
Slide 19: Renewable Portfolio Standards could support 3-5 GW per year through 2020
Renewable Portfolio Standards could support 3-5 GW per year of additional renewables through 2020 Individual State Renewable Portfolio Standards(1) Renewable Portfolio Standard (RPS) Voluntary standards or goals 19 (1) Source: dsireusa.org and internal NEER research
Slide 20: Turbine price reductions reduced delivered cost of wind energy
Turbine price reductions and efficiency improvements combined have reduced the average delivered cost of energy from new wind installations by roughly 50% from 2009 to 2012 Delivered Cost of Electricity from Wind(1) $70 $67 $64 ~50% $60 Decrease $55 $50 $51 Levelized $50 PPA Price $/MWh $39 $40 $36
Slide 21: Typical PPA prices for delivered solar energy are also down significantly
Typical PPA prices for delivered solar energy are also down significantly, primarily as a result of lower solar module pricing Solar PPA Pricing (illustrative California example) $220 $200 $210 ~50% Decrease $180 Since 2008 $160 Levelized $140 $160 $160 PPA Price $120 $140 $/MWh $120 $100 $100 $80 $
Slide 22: Strong renewable energy prospects beyond the current backlog
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 500-1,500 MW(1) of • Up
Slide 23: Consciously shifting the focus of our portfolio
We have been consciously shifting the focus of our portfolio Energy Resources’ Adjusted EBITDA(1) 100% 11% 15% 14% 75% 22% 40% 26% 50% 59% 64% 25% 49% 0% 2009 2012 2014 Long-Term Contracted Merchant Peripheral Businesses 23 (1) See appendix for definition of Adjusted EBITDA
Slide 24: Evaluating portfolio to reduce merchant exposure
We continue to evaluate our portfolio for opportunities to reduce merchant exposure Energy Resources’ Merchant MW(1) 10,000 • Consciously focused on reducing merchant exposure by contracting previously 8,000 8,780 merchant assets or selling our asset position 7,536 6,960 6,732 • Evaluating a potenti
Slide 25: 88% ownership of Seabrook Station a cornerstone of merchant operations
Our 88% ownership share of Seabrook Station remains an important cornerstone of Energy Resources’ merchant operations Seabrook • One of newest nuclear units in 2010-2016 Adjusted EBITDA(1)(2) the United States ($MM) – Large unit provides scale:1,246 $600 Seabrook has not MW pressurized water reactor
Slide 26: Forney and Lamar well positioned for changing market paradigm in Texas
Forney and Lamar are well positioned to take advantage of the changing market paradigm in Texas Merchant Fossil: Forney and Lamar ERCOT North On-Peak • Located in the attractive Spark Spread(1) ERCOT market and equipped ($/MWh) with proven technology $25 • Texas economy expected to grow at 3.5% from
Slide 27: Consciously shifting the focus of our portfolio
We have been consciously shifting the focus of our portfolio Energy Resources’ Adjusted EBITDA(1) 100% 11% 15% 14% 75% 22% 40% 26% 50% 59% 64% 25% 49% 0% 2009 2012 2014 Long-Term Contracted Merchant Peripheral Businesses 27 (1) See appendix for definition of Adjusted EBITDA
Slide 28: Leveraging our skills to generate additional earnings with little incremental capital
By leveraging our skills we have generated additional earnings and cash flows with little incremental capital or risk Capital Employed (Year-end 2012) Wholesale Full Structured Competitive Proprietary Origination PMI/Retail Requirements Products Retail Trading 1% Competitive Proprietary Retail Tradi
Slide 29: One of the largest consumers of natural gas in the U.S. power sector
NextEra Energy is one of the largest consumers of natural gas in the U.S. power sector U.S. Power Company Annual Gas Consumption (2011) Gas Infrastructure Rationale (Bcf) • NextEra Energy is one of 800 the largest consumers of 700 natural gas in the U.S. 600 power sector 500 – Over 700 Bcf in 2011 4
Slide 30: Economic returns from gas infrastructure business have been attractive
Our economic returns from the gas infrastructure business have been attractive, and we have gained valuable insight into the dynamics of the gas business Typical Shale Gas – Activities To-Date Return on Investment(1) 4-5 Year Simple Payback • 12-15% unlevered return 40% 37% • 4 to 5-year simple payb
Slide 31: Roughly $7.2 B of growth capital plus $1.6 B maintenance capital
Our current plans include roughly $7.2 B of growth capital primarily related to wind and solar projects, in addition to roughly $1.6 B in maintenance capital Estimated Capital Expenditures(1) Summary ($B) $4 $1.8 - $3.3 Baseline + Maintenance Capital Incremental $3 $2.4 - $2.9 0.5 1.5 $2 $0.8 - $1.4
Slide 32: Business mix continues to shift 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 32 (1) See Appendix for definition of Adjusted
Slide 33: NextEra Energy Transmission
NEXT@Fa: ENERGY &% TRANSMISSION
Slide 34: Lone Star CREZ project cornerstone of growing transmission business
The Lone Star CREZ project in Texas is the cornerstone of our growing transmission business Lone Star Transmission • 330 mile, 345 kV line and five substations in Texas • Construction completed in Q1 2013 • Total capital investment of approximately $780 MM • Authorized 45% equity and 9.6% ROE Lone S
Slide 35: Market for new transmission projects with increasing opportunities to compete
The overall market for new transmission projects is aligned regionally, with increasing opportunities to compete Competitive Transmission Opportunity Set • Competing for $4 B of investment opportunities in several jurisdictions – Alberta – Hawaii – New England – New York – Ontario • Decisions expect
Slide 36: NextEra Energy
NEXT@Cra’ ENERGY &
Slide 37: Business mix shifting towards more regulated and long-term contracted
NextEra’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 2016 2011
Slide 38: Dividend policy reflects increasing contribution from regulated and contracted businesses
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 - $3.00 ? of 55% targ
Slide 39: We are well-positioned for future growth
We are well-positioned for future growth NextEra Energy – Investment Proposition • Above-average and highly visible growth through 2016 – Four years of regulatory certainty at FPL – Strong backlog at Energy Resources with upside potential • Strong and increasing cash flow from operations • Moderate
Slide 40: NextEra Energy
NEXT@Cra’ ENERGY &
Slide 41: Appendix
NEXTera: ENERGY & = Appendix
Slide 42: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ 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 43: Reconciliation of Adjusted Earnings Per Share 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 44: 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 Net income $1,923 ($86) (1) $1,837 Add back interest 1,034 0 1,034 Add back income taxes 529 (57) (1) 472 Add ba
Slide 45: 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 46: 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 47: Cautionary Statement And Risk Factors That May Affect Future Results (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) failure or breach of NextEra Energy's and FPL's information technology systems; risks to NextEra Energy and FPL's retail businesses of compromise of sensitive customer data; risks to NextEra Energy and FPL of volatility in
Slide 48: NEXT@Cra’
NEXT@Cra’ ENERGY &
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