Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — FY2010 Earnings Presentation
53 slides from Nextera Energy's earnings presentation, Jan 25, 2011
Slide 1: Earnings Conference Call Fourth Quarter and Full Year 2010
Earnings Conference Call Fourth Quarter and Full Year 2010 January 25, 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: For the full year 2010, NextEra Energy posted record adjusted earnings of $1.8 billion
For the full year 2010, NextEra Energy posted record adjusted earnings of $1.8 billion NextEra Energy Financial Highlights – Full Year 2010 • Delivered roughly 6% adjusted EPS growth • Total shareholder return over 5 years of 48%(1) – Total shareholder return over 10 years of 107% • Commitment to fi
Slide 5: FPL had a solid operational, regulatory and financial year in 2010
FPL had a solid operational, regulatory and financial year in 2010 NextEra Energy Highlights – Full Year 2010 • Florida Power & Light – Base rate settlement agreement was approved in the fourth quarter – Expect to bring online major capital projects costing approximately $6.4 billion between 2011 an
Slide 6: Despite a challenging business environment, Energy Resources had a very productive year
Despite a challenging business environment, Energy Resources had a very productive year NextEra Energy Highlights – Full Year 2010 (Cont’d) • Energy Resources – Added 754 MW of wind capacity in 2010 – Owned 8,298 MW of wind at year-end 2010 and maintained its position as the leading wind operator in
Slide 7: Fourth quarter 2010 adjusted EPS increased approximately 1% year over year
NextEra Energy’s fourth quarter 2010 adjusted EPS increased approximately 1% year over year NextEra Energy Results – Fourth Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ millions) ($ millions) $349 $0.85 $332 $0.79 $0.80 $323 $263 $0.63 2009 2010 2009 2010 2009 2010 2009 2010 7 See Appendix
Slide 8: 2010 adjusted EPS increased by 6% driven by strong earnings at FPL
NextEra Energy’s 2010 adjusted EPS increased by 6% driven by strong earnings at FPL NextEra Energy Results – Full Year GAAP Adjusted Net Income EPS Net Income EPS ($ millions) ($ millions) $1,957 $4.74 $1,778 $4.30 $1,648 $4.05 $1,615 $3.97 2009 2010 2009 2010 2009 2010 2009 2010 8 See Appendix for
Slide 9: FPL's full year EPS contributions increased year over year
FPL’s full year EPS contributions increased approximately 12% year over year Florida Power & Light – 2010 Results Fourth Quarter Full Year Net Income EPS Net Income EPS ($ millions) ($ millions) $945 $831 $186 $2.29 $181 $0.45 $0.43 $2.04 2009 2010 2009 2010 2009 2010 2009 2010 9
Slide 10: FPL's full year earnings increased due to base rate revenue increases and clause results
FPL’s full year earnings increased due primarily to base rate revenue increases and clause results FPL EPS Contribution Drivers – 2010 ($/share) Fourth Full Quarter Year FPL – 2009 EPS $0.45 $2.04 Drivers: Customer growth $0.01 $0.03 Usage growth, weather ($0.05) $0.13 Usage growth, underlying w/mix
Slide 11: Certain of FPL's customer metrics are showing signs of improvement
Certain of FPL’s customer metrics are showing signs of improvement Customer Characteristics – Fourth Quarter 2010 Retail kWh Sales Customer Growth(1) (Change vs. prior year quarter) (Change vs. previous year) 100 Customer Growth 0.6% 80 # of 60 + Usage Growth Due to Weather -3.2% Customers 40 28,000
Slide 12: The recently approved base rate settlement agreement provides stability and visibility
The recently approved base rate settlement agreement provides significant stability and visibility for both customers and shareholders Base Rate Settlement Agreement • Retail base rates will remain effectively frozen through the end of 2012 • Cash cost recovery for West County unit 3 will be limited
Slide 13: Illustrative example of surplus depreciation amortization
This illustrative example shows the use of surplus depreciation amortization in 2010 and the potential use of amortization over the balance of the agreement Surplus Depreciation Amortization Illustrative Example $MM (1) 2010 2011 2012 Total Annual Cap (1) $267 $267 $242 $776 + Amount Not Used in Pri
Slide 14: Earnings growth at FPL will be driven by an increasing rate base
Over the next couple of years, earnings growth at FPL will be driven by an increasing rate base FPL: Rate Base (2009-2014E) ($B) 014 : 8 .5% $30 AGR 2009-2 t ed C $26.2 - $26.6 Estima $25.5 - $25.9 $25 $23.6 - $23.8 $21.0 - $21.2 $20 $15 $10 $5 $0 2009 2010 2011 E 2012 E 2013 E 2014 E Retail rate ba
Slide 15: Energy Resources continues to capitalize on opportunities to develop its wind portfolio
Energy Resources continues to capitalize on opportunities to develop its wind portfolio Energy Resources Overview • Added a total of 754 MW of wind capacity during 2010 – Acquired a 54 MW project in Canada and 16 MW in California • Secured approximately 454 MW in wind PPAs in the fourth quarter – In
Slide 16: Energy Resources expanded its solar opportunities and received a nuclear license extension
Energy Resources expanded its portfolio of solar opportunities and received a license extension for one of its nuclear assets Energy Resources Overview (Cont’d) • Acquired approximately 40 MW of solar projects currently in development in Canada • Commissioned the 5 MW Paradise solar PV project in Ne
Slide 17: Energy Resources' results were roughly flat amid challenging market conditions
For the full year, Energy Resources’ results were roughly flat amid challenging market conditions Energy Resources Results Fourth Quarter Full Year Net Income EPS Net Income EPS ($ millions) ($ millions) $980 $2.37 $759 $1.86 $156 GAAP $0.38 $73 $0.17 2009 2010 2009 2010 2009 2010 2009 2010 $792 $80
Slide 18: Energy Resources adjusted EPS contribution drivers 2010
For the full year, positive contributions from new investments and existing assets were offset by higher expenses and challenging market conditions Energy Resources Adjusted EPS Contribution Drivers – 2010 Fourth Full Quarter Year NextEra Energy Resources – 2009 Adjusted EPS $0.32 $1.94 Drivers: New
Slide 19: Energy Resources signed 1,238 MW of wind PPAs in 2010
Energy Resources signed 1,238 MW of wind PPAs in 2010, including 553 MW of projects expected to be commissioned in 2011 or 2012 Wind Development Update • Secured approximately 454 PPAs Secured in 2010 MW of PPAs in the fourth Project quarter 1,500 COD • Currently have 612 MW of wind 1,238 MW capacit
Slide 20: Acquisitions a key part of Energy Resources' expansion
Acquisitions have been and likely will continue to be a key part of Energy Resources’ expansion Energy Resources Acquisitions • Energy Resources has acquired approximately 340 MW of renewable capacity since January of 2008 • In addition, acquired or contracted to acquire 190 MW of wind and solar pro
Slide 21: Spain solar thermal investments expand our solar portfolio
Energy Resources’ Spain solar thermal investments represent the opportunity to expand our solar portfolio and earn attractive returns Spain Solar Projects • Spanish government approved projects in December 2009 under a Royal Decree law • Acceptable revisions to Royal Decree published in December 201
Slide 22: Energy Resources existing assets' gross margin is well hedged
Energy Resources existing assets’ gross margin is well hedged in both the near and longer term Current Hedge Position and Sensitivities • Overall gross margin hedged for 2011 and 2012 has not changed significantly since the third quarter • Average merchant hedge price for non-spark spread assets in
Slide 23: Fourth quarter 2010 EPS summary
NextEra Energy’s earnings were roughly flat in the fourth quarter however results include a 3 cent drag associated with the write down of investments for repowering opportunities NextEra Energy EPS Summary – Fourth Quarter 2010 GAAP 2009 2010 Change FPL $0.45 $0.43 ($0.02) Energy Resources $0.38 $0.
Slide 24: Full year 2010 EPS contributions
For the full year 2010, strong growth at FPL drove the overall improvement in NextEra Energy’s results NextEra Energy EPS Contributions – Full Year 2010 GAAP 2009 2010 Change FPL $2.04 $2.29 $0.25 NextEra Energy Resources $1.86 $2.37 $0.51 Corporate and Other $0.07 $0.08 $0.01 Total $3.97 $4.74 $0.7
Slide 25: NEX Tera
NEX Tera ENERGY &
Slide 26: Q&A Session
26 Q&A Session NExTera’ ENERGY 2
Slide 27: NEX Tera
NEX Tera ENERGY &
Slide 28: Appendix
28 Appendix NExTera’ ENERGY 2
Slide 29: 2011 Portfolio Financial Information
2011 Portfolio Financial Information 1 Expected Gross Margin2 % Gross EBITDA2 Remaining3 Following4 Generation Range Margin Range Contract Year PTC MWs Mwh's $ in millions Hedged $ in millions Life Expiration 6 Contracted Wind Midwest 2,576 9,145,037 $585 - $615 94% $505 - $535 16 ($1) Texas 742 1,9
Slide 30: 2012 Portfolio Financial Information
2012 Portfolio Financial Information 1 Expected Gross Margin2 % Gross EBITDA2 Remaining3 Following4 Generation Range Margin Range Contract Year PTC MWs Mwh's $ in millions Hedged $ in millions Life Expiration 6 Contracted Wind Midwest 2,576 9,339,423 $610 - $640 92% $525 - $555 16 ($13) Texas 742 1,
Slide 31: Wind Resource Performance
Wind Resource Performance Gross1 MWh Production: Actual vs. Long Term Expected Average (Fifteen month trend ended December 31, 20102) (1) MWh production from wind resource prior to reductions for actual and planned outages and curtailments. (2) Includes incremental new wind investment beginning in t
Slide 32: NextEra Energy Resources – Wind Portfolio Locations
NextEra Energy Resources – Wind Portfolio Locations(1) Langdon Midwest Langdon II Mount Copper Pubnico Point Oliver County (Canada) Oliver County II North Dakota Wind Ashtabula West Wilton Wind Wilton Wind II WPP93-MN Northeast Ashtabula II Day County Baldwin South Dakota Wind Mower County Butler Ri
Slide 33: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 9/30/10 $311.2 Primary Drivers: Amounts Realized During 4th Quarter (39.3) Revenue Hedges – Gas Change in Forward Prices (all positions) (30.3) & Power Prices ($47.6) Subtotal (69.6) All Other - Ne
Slide 34: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ 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 35: 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 12/31/10 2011 2012 2013 2014 2015 - 2032 2011 - 2032 Natural gas related positions $ 230.8 $ (86.0) $ (65.3) $ (21.2) $ (14.1) $ (44.2) $ (230.8) Spark sprea
Slide 36: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Three Months Ended December 31, 2010) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 181 $ 73 $ 9 $ 263 Adjustments, net of income taxes: Net unrealiz
Slide 37: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Three Months Ended December 31, 2009) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 186 $ 156 $ 7 $ 349 Adjustments, net of income taxes: Net unreali
Slide 38: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Full Year Ended December 31, 2010) Florida Pow er NextEra Energy Corporate & (m illions, except per share am ounts) & Light Resources Other NextEra Energy, Inc. Net Income (Loss) $ 945 $ 980 $ 32 $ 1,957 Adjustments, net of income taxes: Net
Slide 39: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Full Year Ended December 31, 2009) Florida Pow er NextEra Energy Corporate & (m illions, except per share am ounts) & Light Resources Other NextEra Energy Inc. Net Income (Loss) $ 831 $ 759 $ 25 $ 1,615 Adjustments, net of income taxes: Net
Slide 40: Reconciliation of 2010 Adjusted EBITDA to EBITDA
Reconciliation of 2010 Adjusted Earnings Before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA) to EBITDA (Full Year Ended December 31, 2010) GAAP Adjustments Adjusted (1) Net income $1,957 ($179) $1,778 Add back interest 979 0 979 (1) Add back income taxes 532 (116) 416 Add back dep
Slide 41: 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 42: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) FPL is a regulated entity subject to the jurisdiction of the Florida Public Service Commission (FPSC) over a wide range of business activities, including, among other items, the retail rates charged to its customers, the
Slide 43: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) markets. NextEra Energy’s results of operations and growth prospects could be adversely affected as a result of future legislation or regulatory initiatives, including, but not limited to, those that reverse or restrict the
Slide 44: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The nuclear generation facilities are subject to environmental, health and financial risks, such as risks relating to site storage of spent nuclear fuel, the disposition of spent nuclear fuel, emissions of tritium and oth
Slide 45: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The operation and maintenance of power generation, transmission and distribution facilities involve significant risks that could adversely affect the results of operations and financial condition of NextEra Energy and FPL.
Slide 46: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NextEra Energy’s competitive energy business is subject to development and operating risks that could limit the revenue growth of this business and have other negative effects on NextEra Energy’s results of operations and f
Slide 47: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) In addition to federal financial incentives, NextEra Energy Resources relies on state incentives that support the sale of energy generated from renewable sources, such as state-adopted RPS which require electricity provid
Slide 48: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Disruptions, uncertainty or volatility in the credit and capital markets may negatively affect NextEra Energy’s and FPL’s ability to fund their liquidity and capital needs and to meet their growth objectives, and can also a
Slide 49: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NextEra Energy provides full energy and capacity requirement services, which include, for example, load-following services and various ancillary services, primarily to distribution utilities to satisfy all or a portion of
Slide 50: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NextEra Energy may be unable to meet its ongoing and future financial obligations and to pay dividends on its common stock if its subsidiaries are unable to pay upstream dividends or repay funds to NextEra Energy or if Next
Slide 51: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Energy’s and FPL’s operational systems and infrastructure is challenging. NextEra Energy’s and FPL’s operating systems and facilities may fail to operate properly or become disabled as a result of events that are within the
Slide 52: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The businesses and results of operations of NextEra Energy and FPL could be negatively affected by the lack of a qualified workforce, work strikes or stoppages and increasing personnel costs. NextEra Energy and FPL may no
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