Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Merger or Acquisition (December 2014)
37 slides from Nextera Energy's merger presentation, Dec 3, 2014
Slide 1: NextEra Energy and Hawaiian Electric Industries to Combine
NextEra Energy and Hawaiian Electric Industries to Combine Achieving a More Affordable Clean Energy Future For Hawaii Hawaiian Electric Industries Announces Plan to Spin off ASB Hawaii into an Independent Publicly Traded Company December 3, 2014
Slide 2: Forward Looking Statements
Forward Looking Statements This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements are typically identified by words or phrases such as “may,” “will,” “anticipate,” “estimate,” “expect,” “project,” “int
Slide 3: Additional Information for Shareholders
Additional Information for Shareholders ADDITIONAL INFORMATION AND WHERE TO FIND IT This document does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval nor shall there be any sale of securities in any jurisdiction in whic
Slide 4: Participants
Participants Jim Robo Transaction Overview Chairman & Chief Executive Officer NextEra Energy, Inc. Connie Lau President & Chief Executive Officer Benefits to HEI Stakeholders Hawaiian Electric Industries, Inc. Chairman of Hawaiian Electric Company and Chairman of American Savings Bank Richard Wacker
Slide 5: Transaction Overview
TRANSACTION OVERVIEW JIM ROBO 5
Slide 6: Transformational Opportunity
Transformational Opportunity • Hawaiian Electric Industries, Inc. (HEI) to combine with NextEra Energy – Expands NextEra Energy regulated utility operations and provides additional opportunities to deploy core operational and investment capabilities – Opportunity to strengthen and accelerate Hawaiia
Slide 7: Transaction At A Glance
Transaction At A Glance • HEI shareholders to receive NextEra Energy common stock, shares in ASB, and a one-time cash Transaction dividend Considerations • Stock components expected to be tax free to HEI shareholders • Total value to HEI shareholders of approximately $33.50 per share representing an
Slide 8: Hawaiian Electric to be Integral Member of NextEra Energy Family
Hawaiian Electric to be Integral Member of NextEra Energy Family Current Pro Forma (1) • $45.9 billion market capitalization • $48.5 billion market capitalization • 44,257 MW in operation (2) • 46,044 MW in operation • $72 billion in total assets • $78 billion in total assets (3) • One of the larges
Slide 9: Compelling Strategic Rationale
Compelling Strategic Rationale Hawaiian Electric • Hawaiian Electric furthers NextEra Energy’s strategy of building around its core strengths Builds Upon and taking advantage of unique market opportunities to become the largest – and best – NextEra Energy’s clean energy company in North America Core
Slide 10: North American Leader in Clean Energy Generation
North American Leader in Clean Energy Generation Top U.S. Wind Developers/Owners (MW) (1) NextEra Energy Solar Generation (MW) Under Construction 12,000 Operational 10,210 1,314 10,000 520 8,000 833 6,000 5,443 3,758 3,428 525 4,000 2,724 794 2,000 263 308 0 NEE Company A Company B Company C Company
Slide 11: Proven Track Record of Reducing Oil Dependence, Improving Fuel Efficiency and Lowering Emissions
Proven Track Record of Reducing Oil Dependence, Improving Fuel Efficiency and Lowering Emissions 50 50 41.4 40 40 Millions of Barrels Millions of Barrels 30 30 20 20 10.4 9.0 10 10 0.3 - - 2001 2013 2001 2013 Since 2001, FPL has reduced its reliance on imported oil by over 99% and improved fuel effi
Slide 12: Industry Leading Operational Performance
Industry Leading Operational Performance 2013 Operational Cost Effectiveness $100.00 Good Adjusted Regressed Top Quartile Top Decile $/Retail MWh(1) FPL 2013 = Log/Log $15.19/MWh $10.00 1,000,000 10,000,000 100,000,000 1,000,000,000 Retail MWh NextEra Energy’s focus on efficiency has driven best-in-
Slide 13: Operational Excellence Has Supported Low Customer Bills
Operational Excellence Has Supported Low Customer Bills • Florida Power & Light Company (FPL), one of NextEra Energy’s principal subsidiaries, is one of the nation’s largest and most well-respected electric utilities • Typical residential customer electric bills are the lowest in the State of Florid
Slide 14: Strong Balance Sheet and Experience Executing Large Capital Projects
Strong Balance Sheet and Experience Executing Large Capital Projects • Strong Investment grade credit ratings Corporate Ratings: NextEra Energy Hawaiian Electric Standard & Poor’s A- BBB- Moody’s Baa1 Baa1 Fitch A- BBB+ • Robust access to capital – Approximately $7 billion of capital raised by NextE
Slide 15: NextEra Energy's Strong Track Record of Shareholder Value Creation
NextEra Energy’s Strong Track Record of Shareholder Value Creation Adjusted Earnings Per Share(1) Total Shareholder Return(2) $4.97 $4.57 $4.30 $4.39 $3.84 $4.05 $3.49 $3.04 $2.48 $2.49 $2.63 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 One Year Three Year Dividends Per Share $2.64 $2.40 $2.20 $2.00
Slide 16: Key Approvals / Clearances
Key Approvals / Clearances • HEI shareholders • Hawaii Public Utilities Commission • Federal Energy Regulatory Commission • Federal banking regulators • SEC registration process • Hart-Scott-Rodino We expect the transaction to close within approximately 12 months 16
Slide 17: Benefits to HEI Stakeholders
BENEFITS TO HEI STAKEHOLDERS CONNIE LAU 17
Slide 18: Two Strong and Distinct Companies for Hawaii
Two Strong and Distinct Companies for Hawaii • Transformational opportunity for Hawaiian • Ability to establish American Savings Bank Electric, customers, communities and as an independent public company reflects shareholders strength of American Savings Bank’s business, strong market position and •
Slide 19: Creating Significant Value for HEI Shareholders
Creating Significant Value for HEI Shareholders Attractive Premium and Valuation Multiples Based on implied value received for Hawaiian Electric + HoldCo Per share values (except as noted) by HEI shareholders Overall total Total value $33.50 estimated (including $8 estimated bank value)¹ transaction
Slide 20: HEI Shareholders to Receive Special Cash Dividend
HEI Shareholders to Receive Special Cash Dividend • Provides upfront payment to offset potential near-term dividend differential Pro forma dividend accretion / (dilution): Assumes transaction close in Q4 2015 (1 year after announcement) and 0.2413 exchange ratio¹ HEI Illustrative pro forma dividend
Slide 21: Ensuring Customer Interests are Protected
Ensuring Customer Interests are Protected Hawaiian Electric • Hawaiian Electric filed plans with the Hawaii Public Utilities Commission that seek to: – Enhance Hawaii’s energy future by lowering electric bills – Give customers more service options – Triple the amount of distributed solar – Achieve n
Slide 22: Maintaining Commitment to Hawaii and Local Communities
Maintaining Commitment to Hawaii and Local Communities Hawaiian Electric • Hawaiian Electric Company name to continue • Headquarters to remain in Honolulu, Hawaii • Hawaiian Electric will be NextEra Energy’s third principal business reporting directly to the NextEra Energy Chairman and CEO • NextEra
Slide 23: Greater Opportunities for Employees
Greater Opportunities for Employees Hawaiian Electric • No involuntary workforce reductions for at least two years after close • For at least two years after the close, compensation and benefits for active non-union employees will be comparable to those in place before closing • All of Hawaiian Elec
Slide 24: Great Opportunity for All Stakeholders
Great Opportunity for All Stakeholders • Bringing together two industry leaders in clean and renewable energy that share common vision and goals • Provides additional financial resources and considerable expertise to invest in and significantly accelerate utility’s actions to: – Strengthen Hawaii’s
Slide 25: Overview of the Bank Separation
Overview of the Bank Separation • Spinoff Company: ASB Hawaii, Inc., parent company of American Savings Bank, FSB. Company • Remaining Company: Hawaiian Electric Industries, Inc. • Spinoff of ASB Hawaii to current HEI shareholders on a pro rata basis Transaction • Spinoff is expected to be tax free
Slide 26: Establishing American Savings Bank as an Independent Public Company
ESTABLISHING AMERICAN SAVINGS BANK AS AN INDEPENDENT PUBLIC COMPANY RICHARD WACKER 26
Slide 27: Bank Spinoff Unlocks Value for HEI Shareholders
Bank Spinoff Unlocks Value for HEI Shareholders • Durbin recapture – Prior to July 1, 2013, ASB was exempt from regulatory caps on debit card interchange income under the Durbin Amendment to the Dodd- Frank Act and earned approximately $6 million (after-tax) higher fee income – After the spinoff, wi
Slide 28: Investment Highlights
Investment Highlights Well-positioned within attractive Hawaiian markets Strong and experienced management team Disciplined credit and risk management culture Strong balance sheet and liquidity position Profitable and diversified business model 28
Slide 29: Well-Positioned Within Attractive Hawaiian Markets
Well-Positioned Within Attractive Hawaiian Markets Business Overview American Savings Bank Position in HI Markets • One of the state’s leading residential, commercial and Loans and Leases Deposits commercial real estate lenders 3rd by Loan Share 3rd by Deposit Share • Headquartered in Honolulu; oper
Slide 30: Strong and Experienced Management Team
Strong and Experienced Management Team Select Executives President and CEO of American Savings Bank since 2010 Richard Wacker Previously Chairman and CEO of Korea Exchange Bank (KEB), where he led the turnaround of the major President & CEO Korean commercial bank with $80 billion in assets and o
Slide 31: Disciplined Risk Management Culture, Strong Balance Sheet, Liquidity and Capital
Disciplined Risk Management Culture, Strong Balance Sheet, Liquidity and Capital American Savings Bank loan composition Balance Sheet (9/30/14 - %) Multi- family Other C&D 1% 4% 3% C&I Core 3Q14 Average: 17% Loans Yield on earning deposits 79% assets: 3.84% 75% Cost of funds: 0.23% CRE 10% 1-4 famil
Slide 32: Profitable and Diversified Business Model
Profitable and Diversified Business Model Return on Assets (%) Fee Income (%) Before Durbin Recapture 1.23% 25.1% Durbin 24.4% 1.02% Recapture 0.98% 0.98% 23.0% +~10bps 21.8% ~ 0.95 – 1.00% Target ASB 3Q14 ASB YTD Peers YTD ASB 3Q14 ASB YTD Peers YTD American Savings American Savings American Saving
Slide 33: Closing Remarks
CLOSING REMARKS JIM ROBO NeExTera ENERGY & HAWAIIAN ELECTRIC
Slide 34: Transformational Opportunity
Transformational Opportunity • NextEra Energy to expand regulated utility operations and further deploy and leverage core operational and investment capabilities • Hawaiian Electric to deepen and accelerate its clean energy transformation • American Savings Bank positioned for success as a focused,
Slide 35: Questions & Answers
QUESTIONS & ANSWERS NeExTera HEIL ENERGY a 35
Slide 36: Appendix
APPENDIX NeExTera ENERGY & HEI
Slide 37: Reconciliation of Adjusted Earnings Per Share to Earnings Per Share
NextEra Energy, Inc. NextEra Energy, Inc. Reconciliation Reconciliation of ofAdjusted AdjustedEarnings EarningsPer PerShare SharetotoEarnings EarningsPer PerShare Share 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Earnings Per Share (assuming dilution) $2.53 $2.48 $2.34 $3.23 $3.27 $4.07 $
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