Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (June 2012)
59 slides from Nextera Energy's investor presentation, June 2012
Slide 1: Europe Investor Presentation
Europe Investor Presentation June 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: A brief summary: NextEra Energy – Overview
A brief summary NextEra Energy – Overview • Above-average growth prospects: – At FPL, investing capital to improve customer value – At Energy Resources, record renewables backlog more than offsets commodity headwinds – At Lone Star Transmission, building a regulated transmission company • Portfolio
Slide 4: NextEra Energy is a premier U.S. power company
NextEra Energy is a premier U.S. power company primarily comprised of two strong businesses… • $28.0 B market capitalization(1) • 41,067 MW in operation • $57 B in total assets • One of the largest U.S. electric utilities • Successful wholesale generator • Vertically integrated, retail rate-regulate
Slide 5: Well-positioned to capitalize on today's market opportunities
…and is well-positioned to capitalize on today’s market opportunities Attractive Investment Opportunity • Visible growth opportunities at both primary businesses • Aligned with fundamental trends driving the industry – Low exposure to new environmental regulation • Underpinned by excellent fundament
Slide 6: Substantial and profitable growth while diversifying its asset base
NextEra Energy has realized substantial and profitable growth while diversifying its asset base North American Presence(1) Top Ten U.S. Capacity Owners(2) (MW) 50,000 NextEra Energy 41,067MW 40,000 30,000 20,000 10,000 0 Cumulative Capital Deployed Revenue(3) ($ B) (Trailing 12 Months Reported; $ B)
Slide 7: One of the strongest balance sheets in the industry
NextEra Energy has one of the strongest balance sheets in the industry… Credit Ratings Utility Credit Ratings(1) NextEra Energy Ratings(2) 30% NextEra S&P Moody's Fitch Energy 26% 25% 24% NextEra Energy 21% Issuer credit rating A- Baa1 A- 20% Outlook Stable Stable Stable 15% Florida Power & Light 15
Slide 8: One of the cleanest emissions profiles among top 50 power producers
…and one of the cleanest emissions profiles among the nation’s top 50 power producers… NextEra Energy 2011 Fuel Mix(1) SO2 Emissions Rates Hydro (MWh) (Lbs/MWh) 1.0% Solar 16 0.3% Nuclear 22% 12 Wind 13% Coal 8 6% NextEra Energy Natural Gas 4 Oil 1.0% 56% 0 NOx Emissions Rates CO2 Emissions Rates 4
Slide 9: Outperforming our industry over an extended period
Over an extended period of time, we have been successful in attaining our goal of outperforming our industry NextEra Energy Performance vs. Electric Utility Industry 10-Years Ending December 31, 2011 S&P 500 Electric NextEra Utilities Index Energy Adjusted EPS Growth (CAGR) 2.2%(1) 6.3%(2) Dividends
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Slide 11: 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 • 24,460 MW in operation • $10.6 billion in operating revenues FPL Service Territor
Slide 12: Our approach is founded on the virtuous circle
Our approach to the business is founded on the “virtuous circle” Customer Satisfaction Superior Constructive Customer Value Virtuous Circle Regulatory Delivery Environment Strong Financial Position 12
Slide 13: We deliver excellent value to our customers
We deliver excellent value to our customers… FPL’s Customer Value Proposition Competitive, Award-Winning Clean Affordable Bills + Superior Reliability + Customer Service + Environmental Profile Florida Electric Utility Residential Bill Comparison of Average Typical Monthly Bills from January – March
Slide 14: Operational excellence and a superior cost proposition
…built on operational excellence and a superior cost proposition O&M Cost per Retail kWh Fossil Heat Rate Cents per kWh Btu per kWh O&M Btu/ ¢/kWh kWh Industry 2.40 10,500 10,388 Average(2) 2.28 2.20 Industry 10,000 Average(1) 10,045 2.00 9,500 1.78 Good Good 1.80 1.64 9,000 1.60 FPL FPL(1) 8,500 1.
Slide 15: Investing heavily to improve long-term customer value
At FPL, we are investing heavily to improve long-term customer value without driving up customer bills FPL’s Capital Expenditures(1) $4.0 $3.0 $ B $2.0 $1.0 $- 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E FPL’s Major Capital Projects Estimated Approx. Project Name Fuel Est. PS
Slide 16: FPL submitted its formal base rate filing on March 19th
FPL submitted its formal base rate filing on March 19th 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 Canaveral cost recovery Less s
Slide 17: Base rate increase offset by reductions in the fuel portion
FPL’s base rate increase is significantly offset by reductions in the fuel portion of the bill FPL Base Rate Request: Bill Impact Base Portion of Bill Total Bill $100 $100 $90 $90 $80 $80 $70 $70 $60 $60 $50 $50 $40 $40 $30 $30 $20 $20 $10 $10 $0 $0 (1) (1) Typical Low Usage 1,000 kWh Bill Low Usage
Slide 18: FPL rate base growth from additional investments
Over the next few years, additional investments in generation and infrastructure at FPL will drive an increase in capital on which we earn a return FPL Rate Base (2011-2014E) $B $30.0 $27.3 - $27.7 $26.4 - $26.8 $24.7 - $24.9 $25.0 $21.7 $20.0 $15.0 $10.0 $5.0 $0.0 2011 E 2012 E 2013 E 2014 E (1) Re
Slide 19: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 20: Energy Resources is a successful wholesale generator
Energy Resources is a successful wholesale generator with a concentration of clean energy assets under long-term contracts Energy Resources Portfolio(1) • Successful wholesale generator • U.S. leader in renewable generation – With nearly 10,000 MW of wind by the end of 2012 • 16,607 MW in operation
Slide 21: Energy Resources strategy: build around core strengths
Our strategy at Energy Resources has always been to build around our core strengths, taking advantage of market opportunities Energy Resources Strategy Core Strengths Visible Growth Opportunities + Operational Excellence + Financial Strength Skills New Solar + Scale Nuclear Business (Seabrook) + Sco
Slide 22: Largest owner of wind assets in the U.S.
Energy Resources is the largest owner of wind assets in the U.S., with almost twice as much capacity as the next competitor Energy Resources Wind Portfolio Cumulative Wind Growth Top U.S. Wind Developers / Owners (MW) (MW) 8,569 (1) 8,298 8,349 7,544 6,375 5,077 4,728 4,016 3,192 3,339 2,719 2,758 2
Slide 23: Wind is no longer a niche business
Wind is no longer a “niche” business Wind Production Summary 2007 2008 2009 2010 2011 Effective Capacity(1) (MW) 4,173 5,388 6,493 7,624 8,386 Wind Production (MM MWh) 11.4 15.4 15.8 20.4 24.6 Implied Average Capacity Factor 31% 33% 28% 30% 34% Total Production Eligible for PTCs (MM MWh) 10.5 14.4 1
Slide 24: 2012 through 2014 will be challenged by headwinds
2012 through 2014 will be challenged by headwinds… Natural Gas Prices(1) Production Tax Credit Roll-Off $/MMBtu $12 $ MM $10 $40 $37 $35 $35 $8 $30 $26 $25 $6 $20 $16 $15 $4 $9 $9 $10 $5 $2 $0 2009 2010 2011 2012E 2013E 2014E Lower natural gas prices hurt merchant The impact of wind projects reachin
Slide 25: Largest backlog of renewable projects in our history
…but supported by the largest backlog of renewable projects in our history Wind and Solar Development • In 2012, Energy Resources plans Estimated Cap Ex for Wind and Solar Projects through 2014(1) to add ~1,300 MW of new U.S. wind capacity, which are $5.9 - $6.3 B contracted or long-term hedged Wind
Slide 26: We are significantly hedged for the next several years
We are significantly hedged for the next several years Energy Resources Equivalent Gross Margin Contracted or Hedged(1) 99% 100% 100% 100% 96% 93% 87% 80% 60% 40% 20% 0% 2012 2013 2014 Existing Assets New Assets We remain focused on having a highly contracted portfolio 1) Projected equivalent gross
Slide 27: Lone Star Transmission
L®NEStar SNESTAr
Slide 28: Lone Star's CREZ line: a significant regulated growth opportunity
Successful development of Lone Star’s CREZ line represents a significant regulated growth opportunity Lone Star Transmission CREZ Line • In January 2009, Lone Star was selected by Texas PUC as a CREZ(1) transmission service provider – ~320-mile line – ~$800 million of rate base • Received approval f
Slide 29: NextEra Energy & Resources
NEXT@Cra’ ENERGY &
Slide 30: Adjusted earnings per share growth through 2014
Together, NextEra Energy’s investment opportunities form the basis for our expected adjusted earnings per share growth through 2014 and will contribute to maintaining the growth momentum into 2015 NextEra Energy Adjusted Earnings Per Share Growth Adj. EPS $6.00 $5.05 - $5.65 2015 and Beyond • Mainta
Slide 31: Business mix shifting to more regulated and contracted
NextEra Energy’s business mix is expected to shift to a more regulated and long-term contracted business by 2014 Adjusted EBITDA(1) from Adjusted Earnings from Regulated and Long-Term Regulated Businesses Contracted Operations 100% 100% 84% 78% 80% 80% 65% 58% 60% 60% 40% 40% 20% 20% 0% 0% 2011 2014
Slide 32: Current dividend policy
NextEra Energy’s current dividend policy reflects its expected increase in the proportionate contribution from its rate- regulated businesses and long-term contracted assets Dividends Per Share(1) Historic Dividend Per Share Growth Dividend Policy • Expected increase in the proportion (2) $2.40 of N
Slide 33: Intensely focused on execution: critical success factors for 2012
We are intensely focused on execution 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: – Ensure solid execution in daily operations – Mov
Slide 34: NextEra Energy & Resources
NEXT@Cra’ ENERGY &
Slide 35: Appendix
Nee EN LF) a Appendix
Slide 36: Two principal businesses share common critical support functions
Our two principal businesses share common critical support functions A premier regulated utility… …and a diversified, competitive power producer Engineering & Construction Supply Chain Nuclear Generation Non-nuclear Generation 36
Slide 37: Proven track record of building businesses and delivering growth
We have a proven track record of building businesses and delivering growth FPL Cumulative Capital Employed(1) Adjusted Earnings Per Share(2) $4.30 $4.39 $21.7 $4.05 $3.84 $19.5 $3.49 $17.7 $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 '09 '10 '11
Slide 38: Approximately $15.6 billion of credit received
NextEra has received approximately $15.6 billion(1) of credit, including commitments and funded transactions 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 $2.9 billion U.
Slide 39: History of state deregulation
While the majority of states use “cost-of-service” ratemaking, a number of states have gone through deregulation History of State Deregulation • During the 1990s, a number of states adopted different regulatory models to encourage competition among generators to serve retail customers • Status of el
Slide 40: Multiple regulators govern rate setting, transmission, reliability
Multiple regulators, at the federal and state level, govern rate setting, transmission, reliability, and environmental protection Major Regulatory Agencies • Federal Energy Regulatory Commission (FERC) – FERC has also encouraged the formation of regional transmission organizations (RTOs) and Indepen
Slide 41: Florida Public Service Commission
Florida is regulated by a state agency known as the Florida Public Service Commission Florida Public Service Commission • Consists of five members selected for their knowledge and experience in fields substantially related to the duties and functions of the Commission – Commissioners are appointed b
Slide 42: FPL's costs recovered through base rates and clause mechanisms
FPL’s costs are recovered through base rates as well as through clause mechanisms Cost Recovery Mechanisms • Base rates – designed to recover the costs of constructing, operating, and maintaining a utility system – Most of FPL’s return is earned through base rates • Cost recovery clauses – recovery
Slide 43: Fuel portion of the typical customer bill has fallen
Our investments in fuel-efficient generation and decreasing fuel costs have driven down the fuel portion of the typical customer bill FPL – Typical Residential Customer Bills(1) Monthly Bill $120 $108.61 $100 $94.62 $80 $60 $40 $20 $0 2006 2012 Base Rate Fuel Other 43 1) FPL’s typical residential mo
Slide 44: FPL settlement agreement entered into in 2010
FPL is currently under a settlement agreement entered into in 2010, which will provide an acceptable balance and certainty for our customers and our shareholders though the end of 2012 Base Rate Settlement Agreement • Retail base rates will remain effectively frozen through the end of 2012 • Cost re
Slide 45: Participants in Florida utility rate cases
The commissioners, staff, and intervenors all participate in Florida utility rate cases Florida Utility Rate Case – Key Participants Commissioners Staff Intervenors • Chairman Ronald • Professional staff • Office of Public Brise that provides Counsel (OPC) recommendations to • Florida Industrial • L
Slide 46: Florida employment and housing affordability trends
Trends in Florida employment and housing affordability have shown improvement Florida Economy Florida Unemployment Rate(1) $B Tourism Taxable Sales(2) (12-month moving sum) 12% $68 10% $66 8% $64 $62 6% $60 4% $58 2% $56 0% Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 $54 Jan-07 Jan-08 Jan-09 Jan-10 Ja
Slide 47: Renewable Portfolio Standards drive renewable development
Growth in renewable generation development has been fueled by Renewable Portfolio Standards (RPS) Renewable Portfolio Standards in the U.S. WA: 15% MI: 10% MWh NH: 23.8% ME: 40% by 2020 & 1,100 MW by 2025 by 2017 MT: 15% ND: 10% by 2015 VT: 20% MN: by 2015 by 2015 by 2017 MA: 15% OR: 25% by 25% by N
Slide 48: U.S. federal tax incentives for renewable generation
U.S. Federal tax incentives currently expire at the end of 2012 for wind generation and at the end of 2016 for solar generation U.S. Federal Tax Incentives for Renewable Generation • Production Tax Credit (PTC) – Currently $22 per MWh for the first ten years of a wind energy facility’s operation – E
Slide 49: Energy Resources' backlog of new solar opportunities
Energy Resources’ backlog of new solar opportunities is significant and is expected to contribute meaningfully to adjusted earnings starting in 2013 Solar Growth Outlook • ~900 MW of new solar through 2016 Planned Solar Projects(1) with Long-Term Contracts – Spain Two 50 MW solar thermal units MW 1,
Slide 50: Getting the most out of capital investment in physical assets
Energy Resources seeks to get the most out of its extensive capital investment in physical assets Structured Capital Employed (YE 2011) Products PMI/Retail 0.6% Wholesale Full Competitive Proprietary Requirements Retail Trading Marketing & Trading Capability - Asset Optimization NEER less PMI/Retail
Slide 51: Investor Relations website
Last year, we revamped the Investor Relations website, making it a great source for company information Investor Relations Website • You can find the IR home page here on the main www.nexteraenergy.com site: 51
Slide 52: IR website home page
The most current events and newly posted information will appear in the carousel at the top of the IR home page Investor Relations Website – Home Page 52
Slide 53: IR website: Earnings & Supplements
You can access all of our quarterly earnings materials and listen to the webcast of the earnings call Investor Relations Website – Earnings & Supplements • Earnings call webcast and other materials can be accessed through the “Earnings Releases” section • Non-GAAP Reconciliations are available under
Slide 54: IR website: Other Resources
You can also download any recent presentation, FPL and NEER asset portfolios, and other information Investor Relations Website – Other Resources • Under “Business Updates,” you can find NEE’s full asset portfolio and wind resource performance, among other items • All of the recent presentations are
Slide 55: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net Income $791 $479 $903 $896 $901 $1,281 $1,312 $1,639 $1,615 $1,957 $1,923 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses asso
Slide 56: Reconciliation of Adjusted EPS to Earnings Per Share
NextEra Energy, Inc. Reconciliation of Adjusted Earnings Per Share to Earnings Per Share 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Earnings Per Share (assuming dilution) $2.34 $1.38 $2.53 $2.48 $2.34 $3.23 $3.27 $4.07 $3.97 $4.74 $4.59 Adjustments: Net unrealized mark-to-market (gains)
Slide 57: 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 (1) Net income $1,923 ($86) $1,837 Add back interest 1,034 0 1,034 (1) Add back income taxes 529 (57) 472 Add ba
Slide 58: 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 59: Cautionary Statement And Risk Factors (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