Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (December 2012)
66 slides from Nextera Energy's investor presentation, December 2012
Slide 1: December 2012 Investor Presentation
December 2012 Investor Presentation
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: 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… • $28.8 B market capitalization(1) • 41,493 MW in operation • $62 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 23 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(2) Minutes 150 Good 30% 125 FL Industry Average 28% NextEra 100 Energy FPL 25% 23% 75 21% 50 20% 25 16% '06 '07 '08 '09 '10 '11 15% Fossil Reliability
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 2011 Fuel Mix(1) SO2 Emissions Rates Hydro (MWh) (Lbs/MWh) 1.0% 9.0 Solar 0.3% Nuclear 7.5 22% Wind 6.0 13% Coal 4.5 6% NextEra 3.0 Energy Natural Gas Oil 1.0% 56% 1.5 0.0 NOx Emissions Rates CO2 E
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 $4.30 $4.39 $4.05 $21.7 $3.84 $19.5 $3.49 $17.7 $3.04 $14.8 $15.9 $2.63 $13.8 $11.6 $12.3 $2.41 $2.48 $2.49 $10.0 $10.8 '02 '03 '04 '05 '06 '07 '08 '09 '10
Slide 7: 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. Industry 10 Years Ending December 31, 2011 S&P 500 Utilities NextEra S&P 500 Index Energy Adjusted EPS (CAGR)(1) 8.0% 0.7% 6.3%(2) Dividend per Share (CAGR)(3)
Slide 8: 2012 YTD Total Shareholder Return
Year-to-date, we have continued to outperform our industry 2012 – YTD Total Shareholder Return 16% 14.8% 14.1% 14% 12% 10% 8% 6% 4% 2% -1.1% 0% -2% NextEra S&P 500 S&P 500 Energy Utilities Index 8 Source: FactSet; YTD information measured from December 31, 2011 to November 26, 2012.
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Slide 10: Our approach to the business 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 10
Slide 11: 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 $170 Average Typical Monthly Bills from January –
Slide 12: Investing capital to keep customer bills low with industry-leading performance
…through investing capital to keep customer bills low while providing industry-leading operational performance FPL Customer Value Proposition O&M ¢/kWh: 1996-2011 (1) Fossil Generation Fuel Efficiency ¢/kWh 2.50 2.25 Industry Average 2.00 1.75 1.50 FPL 1.25 1.00 Frequency of Interruptions Regulatory
Slide 13: FPL's Capital Expenditures and Major Capital Projects
We are investing heavily to improve long-term customer value FPL’s Capital Expenditures(1) $4.0 $4.0 $3.1 $3.0 $2.6 $2.4 $2.3 $2.3 $2.2 $B $1.8 $1.9 $2.0 $1.4 $1.7 $1.6 $1.4 $1.0 $- 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E FPL’s Major Capital Projects Estimated Approx. P
Slide 14: Nuclear Uprates nearing completion
Uprates at FPL’s St. Lucie and Turkey Point nuclear plants are nearing completion Nuclear Uprates • More than 526 MW of uprates • Total cost of project expected to be $2.95 - $3.15 B(1) • All carrying charges are recovered under the nuclear cost recovery rule - Annual filings with the Florida Public
Slide 15: Cape Canaveral and Riviera Beach Modernizations
The modernizations at Cape Canaveral and Riviera Beach will deliver greater efficiency and cost savings to our customers Cape Canaveral and Riviera Beach Modernizations Cape Riviera Canaveral Beach Capital Cost ($ B) $1.0 $1.3 Installed Capacity (MW) 1,210 1,210 Efficiency Modernized Cape Canaveral
Slide 16: Port Everglades Modernization
The Port Everglades modernization is expected to provide significant savings for customers while reducing emissions Port Everglades Modernization Capital Cost ($ B) $1.2 Installed Capacity (MW) 1,280 Efficiency (BTU/kWh) 6,330 Current Port Everglades Plant In-Service Date Mid-2016 Expected Net Custo
Slide 17: FPL Base Rate Request Summary
FPL submitted its formal base rate filing in March and the technical hearing was held in late August FPL Base Rate Request Summary • $516.5 MM base revenue increase effective January 2, 2013 • $173.9 MM step increase coinciding with COD of the Cape Canaveral modernization • $691 MM in total revenue
Slide 18: FPL's Revenue Request – 2013 vs. 2012
More than 75% of the request is related to the removal of the surplus depreciation amortization credit and the Cape Canaveral modernization FPL’s Revenue Request – 2013 vs. 2012 $ MM $800 $174(2) (25%) $691 $700 $600 $70 $517(1) (10%) $80 $500 (12%) $367 $400 (53%) $300 $200 $100 $- Surplus Deprecia
Slide 19: FPL Base Rate Request Proposed Settlement
Settlement hearings took place in late November; the FPSC will hold a special agenda conference on December 13 FPL Base Rate Request Proposed Settlement • Main components of settlement: – Effective January 2013 through December 2016 – $378 MM retail base revenue increase effective January 2013 – All
Slide 20: NextEra Energy Resources
NEXTeCra’ ENERGY &% RESOURCES _
Slide 21: Energy Resources Strategy
Our strategy at Energy Resources has always been to build around our core strengths, taking advantage of market opportunities Energy Resources Strategy Core Strengths Visible Growth Opportunities + Operational Excellence + Financial Strength Skills New Solar + Scale Nuclear Business (Seabrook) + Sco
Slide 22: Energy Resources' Growth – 2002 to 2011
We have built a strong portfolio and a track record of earnings growth Energy Resources’ Growth – 2002 to 2011 2002 2011 Wind Capacity (MW) 1,745 8,569 Total Capacity (MW) 7,250 16,607 Total Assets ($ B) $6.4 $23.5 Operating Revenues ($ MM) $691 $4,502 Adjusted Earnings ($ MM)(1) $122 $679 Adjusted
Slide 23: Energy Resources' Portfolio
Energy Resources has grown to be one of the largest renewable generation companies and would be a Top 15 utility on a standalone basis Energy Resources’ Portfolio Existing Assets Wind / Solar Development Other Businesses 23
Slide 24: PTC roll-off offset by growing generation portfolio
The PTC roll-off will continue to be a headwind, but will be offset by Energy Resources’ growing generation portfolio Production Tax Credit Roll-Off(1) Annual Wind MW Build $ MM MW $50 $45 1,600 $45 1,400 $40 $37 $35 1,200 $35 $30 1,000 $26 $25 800 $20 $16 $16 600 $15 400 $10 $5 200 $0 0 '00 '01 '02
Slide 25: Energy Resources' asset portfolio is diverse by fuel type and geography
Energy Resources’ asset portfolio is diverse both by fuel type and geography Asset Breakdown(1) Contracted Wind • 83 projects in 19 states and 3 Canadian provinces 7,117 MW • 16-year weighted average remaining contract life • 800 MW gas-fired, 150 MW gas/oil-fired, 1,620 MW nuclear, 193 MW solar, Co
Slide 26: Market risk mitigated by hedged position
Market risk will be mitigated by our significantly hedged position over the next several years Energy Resources Equivalent Gross Margin Contracted or Hedged(1) 99% 96% 100% 95% 93% 80% 60% 40% 20% 0% 2013 2014 Existing Assets New Assets We remain focused on having a highly contracted portfolio; exis
Slide 27: Energy Resources' Portfolio
Energy Resources expects to add ~1,500 MW of wind in 2012, more than any other U.S. company in one year, increasing the total wind portfolio to ~10,000 MW at year end Energy Resources’ Portfolio Existing Assets Wind / Solar Development Other Businesses 27
Slide 28: Wind and Solar Development
Energy Resources has over $7B of capital earmarked for deployment through 2016 under a backlog-only scenario Wind and Solar Development • Expect to add approximately Estimated Cap Ex for Wind and 1,500 MW of U.S. wind in 2012 Solar Projects through 2016(1) – Including over 1,200 MW of new U.S. wind
Slide 29: Canadian Wind and Solar Overview
Renewables development in Canada is progressing as planned and continues to be a source of potential growth Canadian Wind and Solar Overview • ~600 MW of Canadian wind under FIT contract – Expected COD of 2012 through 2015 • 40 MW of Canadian solar under FIT contract – Acquired in 2012 • Total capit
Slide 30: Genesis Project Overview
Genesis solar project has an approved long-term contract and the first unit is expected to come online in November 2013 Genesis Project Overview • 250 MW, solar thermal project comprised of two 125 MW units – Plan to elect CITCs on roughly 125 MW in 2013 and 125 MW in 2014 • The long-term power purc
Slide 31: Desert Sunlight Project Overview
Energy Resources’ Desert Sunlight project is progressing well and is on budget Desert Sunlight Project Overview • 550 MW solar PV project – Energy Resources owns 50% of the project • Energy Resources’ total invested capital estimated to be approximately $1.1 B – Plan to elect CITCs on roughly 155 MW
Slide 32: Spain Solar Project Overview
Construction is on schedule and on budget for Energy Resources’ Spain Solar Project Spain Solar Project Overview • 99.8 MW solar thermal project, consisting of two separate 49.9 MW units • Transmission facilities complete and in service • Construction is roughly 98% and 82% complete on Unit 1 and Un
Slide 33: Mountain View and McCoy Solar Overview
In 2012, Energy Resources received regulatory approval for two new solar Power Purchase Agreements totaling 270 MW Mountain View and McCoy Solar Overview • Mountain View – 20 MW PPA with Nevada Power – Construction expected to start June 2013 with a December 2013 COD • McCoy Solar – 250 MW PPA with
Slide 34: Energy Resources' Portfolio
Our other businesses include customer supply & trading and gas infrastructure Energy Resources’ Portfolio Existing Assets Wind / Solar Development Other Businesses 34
Slide 35: Other Businesses
The proportion of Energy Resources’ earnings from peripheral businesses has not changed since 2010 and continues to be less than 15% of equivalent gross margin Other Businesses Customer Supply & Trading Gas Infrastructure • Market knowledge gained by • Economics of natural gas are participation in t
Slide 36: NextEra Energy Transmission
NEXTe@ra: ENERGY & TRANSMISSION
Slide 37: Lone Star Transmission CREZ Line
Successful development of Lone Star’s CREZ line represents a significant regulated growth opportunity Lone Star Transmission CREZ Line Project Overview Initial Rate Case Proceeding • In January 2009, Lone Star was • Ask: 11% ROE / 52% Equity selected by Texas PUC as a Ratio CREZ(1) transmission serv
Slide 38: Transmission Rationale
We expect our transmission business to be a driver of growth in the latter part of the decade Transmission Rationale • Supports renewables development • Supports fossil development • Improves market for existing assets • Reduces business risk profile • Increases shareholder value 38
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Slide 40: 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 41: 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 42: Expected adjusted earnings per share growth through 2014
NextEra Energy’s investment opportunities form the basis for our expected adjusted earnings per share growth through 2014 NextEra Energy Adjusted Earnings Per Share Growth Adj. EPS $6.00 $5.05 - $5.65 $5.00 $4.39 $4.00 $3.00 $2.38 $2.00 $1.00 $0.00 2001 2011 2014E Note: See Appendix for reconciliati
Slide 43: We will continue to strengthen our balance sheet
We will continue to strengthen our balance sheet Future Free Cash Flow Scenarios “Backlog Only” Scenario Alternate Scenario • Additional attractive 2011(1) 2014 investment opportunities are Cash from identified $4.1 B $5.0 - $5.5 B Operations Less: Cash to $6.5 B $3.5 - $4.0 B • Reduced free cash fl
Slide 44: Cash quality of earnings comparable to other utilities
NextEra Energy’s cash quality of earnings is comparable to other utilities’ S&P 500 Electric Utility Index Companies Ratio of Cash Flow to Adjusted Earnings – 3-Yr Avg. (2009-2011)(1) Cash Flow to Adjusted Earnings Cash Flow to Adjusted Earnings Including Deferred Taxes(2) Excluding Deferred Taxes(3
Slide 45: 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 46: Dividend policy and Dividends Per Share
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 • Target payout ratio of 55% in 2014, (2) $2.40 impl
Slide 47: NextEra Energy Long-Term Strategy
Our strategy will be consistent, but implementation will adjust to external conditions NextEra Energy Long-Term Strategy • We will continue our focus on providing clean energy, keeping costs low, and maintaining our record of excellent execution • Our balance sheet will continue to be a source of co
Slide 48: Potential Areas of Growth – FPL
Our focus will be on selectively pursuing opportunities to successfully grow the company Potential Areas of Growth – FPL • Market driven growth – Favorable demographics – Incremental capital expenditures that deliver customer benefits • Infrastructure improvement • Gas pipeline • Renewables • Servic
Slide 49: Potential Areas of Growth – Energy Resources and Transmission
Our focus will be on selectively pursuing opportunities to successfully grow the company Potential Areas of Growth – Energy Resources • U.S. and Canadian wind • U.S. solar • Renewable asset acquisitions • Gas infrastructure • Optimization of non-renewable competitive generation assets Potential Area
Slide 50: Closing Summary
Closing Summary • A solid foundation – Operational excellence – Financial strength – Clean emissions profile • Proven track record of success – Building businesses – Delivering growth – Creating shareholder value • Visible growth prospects 50
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Slide 52: Appendix
NEXTera ENERGY 2 = Appendix
Slide 53: 2013 Portfolio Financial Information
2013 Portfolio Financial Information (as of September 7, 2012) Equivalent Equivalent Equivalent Expected Gross Margin1 % Gross EBITDA1 Remaining2 Following3 Generation Range Margin Range Contract Year PTC MWs Twh's $ in millions Hedged $ in millions Life Expiration Contracted Wind4 8,218 26.1 $1,650
Slide 54: 2013 Equivalent Gross Margin Contributions and Sensitivities
Energy Resources’ existing assets are largely contracted or hedged for 2013 2013 Equivalent Gross Margin Contributions(1) 2013 Portfolio Sensitivities 6% New Investments(5) • $1/MMBtu change in natural gas ≈ 3-4 cents in 12% Other (2) adjusted EPS(3) 56% 26% Merchant Contracted Assets • 1% change in
Slide 55: 2014 Portfolio Financial Information
2014 Portfolio Financial Information (as of September 7, 2012) Equivalent Equivalent Equivalent 1 Expected Gross Margin % Gross EBITDA1 Remaining2 Following 3 Generation Range Margin Range Contract Year PTC MWs Twh's $ in millions Hedged $ in millions Life Expiration Contracted Wind4 8,218 26.4 $1,6
Slide 56: 2014 Equivalent Gross Margin Contributions and Sensitivities
Energy Resources’ existing assets are largely contracted or hedged for 2014 2014 Equivalent Gross Margin Contributions(1) 2014 Portfolio Sensitivities 12% New Investment(5) • $1/MMBtu change in natural gas ≈ 6-7 cents in 13% Other(2) 50% adjusted EPS(3) Contracted Assets 24% (97% hedged) • 1% change
Slide 57: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ 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 58: Reconciliation of Adjusted Earnings Per Share 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 $4.59 Adjustments: Net unrealized mark-to-market (gains)
Slide 59: NextEra Energy Resources Reconciliation of Adjusted Earnings to Net Income
NextEra Energy Resources, LLC Reconciliation of Adjusted Earnings to Net Income ($ millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net Income (Loss) $81 ($173) $192 $148 $146 $540 $461 $831 $759 $980 $774 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses
Slide 60: Reconciliation of Cash Flow/Adjusted Earnings (Including Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Including Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income (1) Ratio 2009 2010 2011 Average 2009 2010 2011 Average Adjusted Cash Flow $3,686 $4,077
Slide 61: Reconciliation of Cash Flow/Adjusted Earnings (Excluding Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Excluding Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income (1) Ratio 2009 2010 2011 Average 2009 2010 2011 Average Adjusted Cash Flow $3,413 $3,566
Slide 62: Reconciliation of Adjusted to GAAP 2011 Sources and Uses of Cash
Reconciliation of Adjusted to GAAP 2011 Sources and Uses of Cash (Full Year Ended December 31, 2011) USES SOURCES Limited Commercial Recourse FPL Differential Paper, Cash to Common Total Cash From Project Mortgage Membership Corporate Cash, & Total Investing Dividends Uses Operations Debt (net) Bond
Slide 63: 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 64: 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 65: Cautionary Statement And Risk Factors (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
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