Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (February 2013)
71 slides from Nextera Energy's investor presentation, February 2013
Slide 1: Tokyo Investor Presentation
Tokyo Investor Presentation February 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 f
Slide 3: NextEra Energy continues to focus on executing against its strategic objectives
NextEra Energy continues to focus on executing against its strategic objectives… NextEra Energy – Overview • Above-average growth prospects: – At FPL, investing capital to improve customer value – At Energy Resources, renewables backlog more than offsets commodity headwinds – At Lone Star Transmissi
Slide 4: 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 5: 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) 70,000 60,000 NextEra Energy 50,000 42,179 MW 40,000 30,000 20,000 10,000 0 Cumulative Capital Deployed Revenue(3) ($ B) ($ B) $50.8 NextEra
Slide 6: A premier U.S. power company comprised of two strong businesses
NextEra Energy is a premier U.S. power company comprised primarily of two strong businesses supported by a common platform… • $30.5 B market capitalization(1) • 42,179 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
Slide 7: Built on 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 Good 150 30% FL Industry Average 28% 125 NextEra Energy 100 FPL 25% 23% 75 21% 50 20% 25 16% '06 '07 '08 '09 '10 '11 15% Fossil Reliability
Slide 8: One of the cleanest emissions profiles among 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 Hydro (MW) (Lbs/MWh) 1% 9.0 Solar 1% Nuclear 7.5 14% 6.0 Wind 24% 4.5 Natural Gas NextEra 3.0 Energy 55% Coal 2% 1.5 Oil 0.0 3% NOx Emissions Rates CO2 Emission
Slide 9: 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
Slide 10: 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-Year CAGR Ending December 31, 2012 S&P 500 Utilities NextEra S&P 500 Index Energy Adjusted EPS (2001-2011)(1) 8.0% 0.7% 6.3%(2) Dividend per Share(3
Slide 11: Solid financial results in 2012
NextEra Energy delivered solid financial results in 2012 NextEra Energy Year in Review • At FPL: – Continued to deliver outstanding customer value – Continued execution on major capital projects – Achieved satisfactory outcome of base rate case • At Energy Resources: – Moved forward with record rene
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Slide 13: 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 billion in operating revenues • $34.9 billion in t
Slide 14: Our strategy at FPL is founded on the virtuous circle
Our strategy at FPL is founded on the “virtuous circle” Customer Satisfaction Superior Constructive Customer Value Virtuous Circle Regulatory Delivery Environment Strong Financial Position 14
Slide 15: 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 2012 –
Slide 16: Efficiency improvements sustain a superior cost position and low bills
…by investing in significant efficiency improvements to sustain a superior cost position and low bills relative to our industry FPL Customer Value Proposition SAIDI: System Average # of Minutes Interruption Duration Index(1) O&M ¢/kWh: 1996-2012(2) 150 Industry Average 2.50 2.25 125 FL Industry Aver
Slide 17: Investing heavily to improve long-term customer value proposition
We are investing heavily in order to improve our long-term customer value proposition FPL’s Capital Expenditures(1) $4.1 $4.0 $3.1 $3.0 $2.6 $2.4 $2.5 $2.4 $2.3 $B $1.9 $1.8 $2.0 $1.6 $1.5 $1.0 $- 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E FPL’s Major Capital Projects Estimated Appr
Slide 18: Nuclear uprates nearing completion
Uprates at FPL’s St. Lucie and Turkey Point nuclear plants are nearing completion Nuclear Uprates • ~510 MW of uprates • Total cost of project expected to be $2.95 - $3.15 B(1) • All carrying charges are recovered under the nuclear cost recovery rule - Annual filings with the Florida Public Service
Slide 19: Cape Canaveral and Riviera Beach modernizations
The modernizations at Cape Canaveral and Riviera Beach will deliver greater efficiency and cost savings to our customers Cape Canaveral and Riviera Beach Modernizations Cape Riviera Canaveral Beach Capital Cost ($ B) $1.0 $1.3 Installed Capacity (MW) 1,210 1,210 Efficiency Modernized Cape Canaveral
Slide 20: Port Everglades modernization
The Port Everglades modernization is expected to provide significant savings for customers while reducing emissions Port Everglades Modernization Capital Cost ($ 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 21: Investments drive increase in capital on which we earn a return
These significant investments at FPL will drive an increase in capital on which we earn a return Regulatory Capital Employed(1) $B $30 $27.7 - $28.7 $27.0 - $28.0 $25.1 $25 $20 $15 $10 $5 $0 2012 2013 2014 Retail Rate Base Other 21 (1) Includes retail rate base, wholesale rate base, clause-related i
Slide 22: Satisfactory outcome to base rate case in 2012
We reached a satisfactory outcome to our base rate case in 2012, a positive for both FPL customers and our shareholders Base Rate Case Settlement • Main components of settlement: – Effective January 2013 through December 2016 – $350 MM retail base revenue increase effective January 2, 2013 – Allowed
Slide 23: Using capital to improve long-term customer value proposition
We will seek ways to use capital to improve our long-term customer value proposition FPL’s Capital Expenditures(1) $B $4.0 $3.5 $3.0 ? ? $2.5 ? ? ? $2.0 $4.1 $1.5 $2.5 $2.4 $1.0 $1.8 $1.6 $1.5 $0.5 $0.0 2012 2013E 2014E 2015E 2016E 2017E 23 (1) Capital expenditure dollars exclude nuclear fuel and ar
Slide 24: Florida will need additional natural gas infrastructure
Florida will need additional natural gas infrastructure Florida Gas Pipeline Proposal • Issued RFP for third natural gas pipeline to serve Florida – Will provide for 400,000 MMBtu/day of natural gas capacity beginning in 2017 and an additional 200,000 MMBtu/day starting in 2020 – Expect to offer a s
Slide 25: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 26: Energy Resources is a successful wholesale generator with clean energy assets
Energy Resources is a successful wholesale generator with a concentration of clean energy assets that are contracted long-term Energy Resources Portfolio(1) • U.S. leader in renewable generation – Over 10,000 MW of wind • 18,122 MW in operation – Would be a Top 15 utility on a standalone basis • $3.
Slide 27: Building around our core strengths, taking advantage of market opportunities
Our strategy at Energy Resources has always been to build around our core strengths, taking advantage of market opportunities… Energy Resources Strategy Core Strengths Visible Growth Opportunities + Operational Excellence + Financial Strength Skills Solar + Scale Marketing & Trading + Scope Nuclear
Slide 28: Energy Resources' growth 2001 to 2012
…which has helped us continue our excellent track record of delivering profitable growth Energy Resources’ Growth – 2001 to 2012 2001 2012 Wind Capacity (MW) 1,172 10,057 Total Capacity (MW) 5,063 18,122 Total Assets ($ B) $4.9 $27.2 Operating Revenues ($ MM) $869 $3,895 Adjusted Earnings ($ MM)(1)
Slide 29: Energy Resources' 2012 highlights
Energy Resources executed well on major capital projects in 2012… Energy Resources’ 2012 Highlights • Commissioned roughly 1,500 megawatts of wind in the U.S., a record for any company in our industry – Also brought our 10,000th megawatt of wind online in December • Commissioned first Ontario wind p
Slide 30: Focus on execution in 2013: major capital projects
… and we remain focused on execution in 2013 Energy Resources’ Major Capital Projects • Three large-scale solar projects will begin to enter service in 2013 – Genesis: Two 125 MW units; $1.2 B capital cost COD: November 2013 and April 2014 – Desert Sunlight: 275 MW net ownership; $1.1 B capital cost
Slide 31: Adding to our backlog of development projects
We are also focused on adding to our backlog of development projects Wind and Solar Development • Currently developing our Estimated Cap Ex(1) for Wind and Solar Projects in Backlog 2013 and 2014 U.S. wind program $3.6 - $4.0 B • ~$1.7 B for backlog of wind projects through 2016 Wind – Includes our
Slide 32: Continued growth offsets PTC roll-off headwind
Our continued growth in the business will help offset the PTC roll- off headwind that we will continue to face Production Tax Credit Roll-Off(1) Annual Wind MW Build MW $ MM 1,600 $50 $45 1,400 $45 1,200 $40 $37 $35 $35 1,000 $30 $26 800 $25 $20 600 $16 $16 $15 400 $10 200 $5 $0 0 '00 '01 '02 '03 '0
Slide 33: Wind fleet has more than doubled in five years
Our wind fleet has more than doubled in the last five years Wind Production Summary 2007 2008 2009 2010 2011 2012 (1) Effective Capacity 4,173 5,388 6,493 7,624 8,386 8,881 Wind Production 11.4 15.4 15.8 20.4 24.6 25.8 Implied Average Capacity Factor 31% 33% 28% 30% 34% 33% Total Production Eligible
Slide 34: Portfolio shifting to more long-term contracted business
Energy Resources’ portfolio is shifting to a more long-term contracted business, while contributions from our peripheral businesses remain roughly flat as a proportion of the total Energy Resources’ Adjusted EBITDA(1) 100% 11% 15% 15% 75% 20% 26% 40% 50% 59% 65% 25% 49% 0% 2009 2012 2014 Long-Term C
Slide 35: Market risk mitigated by significantly 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) 100% 98% 100% 97% 95% 80% 60% 40% 20% 0% 2013 2014 Existing New We remain focused on having a highly contracted portfolio; existing assets a
Slide 36: NextEra Energy Transmission
NEXT@ra’ ENERGY &% TRANSMISSION
Slide 37: Lone Star's CREZ aligns with shift toward regulated business mix
Successful development of Lone Star’s CREZ aligns with our shift toward a more regulated business mix Lone Star Transmission CREZ Line Project Overview Initial Rate Case Proceeding • In January 2009, Lone Star was • Texas PUC issued final order for selected by Texas PUC as a a $14.7 MM revenue requi
Slide 38: Transmission business a driver of growth later in the decade
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
Slide 39: NextEra Energy Financial
NEXT@Cra’ ENERGY &
Slide 40: 2012 actual and future financing plans
2012 marked NextEra Energy’s biggest year of capital investment at both FPL and Energy Resources 2012 Actual and Future Financing Plans 2012 Sources and Uses of Cash Future Financing Plans USES $ MM % • Capital needs in 2013 to Cash to Investing $8,928 90% decline as new investments Common Dividends
Slide 41: Business mix shifting to more regulated and long-term contracted by 2014
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 42: Dividend policy reflects increasing contribution from regulated 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 Dividends Per Share(1) Historic Dividend Per Share Growth Dividend Policy • Target payout ratio of 55% in $2.40 $2.20 2014, im
Slide 43: Focus for 2013
Focus for 2013 • FPL: – Maintain leading customer value proposition – Continue execution on “mega projects” Fourth nuclear uprate Cape Canaveral in service mid-year Riviera and Port Everglades on track to enter service in 2014 and 2016 – Focus on productivity and cost-effectiveness – Identify increm
Slide 44: NEXT@Cra’
NEXT@Cra’ ENERGY &
Slide 45: Appendix
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Slide 46: State ratemaking and 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 47: 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 48: 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 49: FPL 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 – Generally, most of FPL’s return is earned through base rates • Cost recovery clauses
Slide 50: Mortgage delinquency rates in Florida are on the decline
Mortgage delinquency rates in Florida are on the decline Mortgages Top 10 States With Mortgages Past Due 90+ Days Past Due 90+ Days Delinquent Delinquent Mortgages Mortgages (%) (%) 8% 7% 7% 6% 6% 5% 5% 4% 3.71% 4% 3% 3% 2% 2% 1% 1% 0% 0% 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 NV MS NJ WA GA RI MD
Slide 51: Total foreclosure filings declined in December
Total foreclosure filings declined in December but have been trending upward following the decline in 2010 Estimated number of Florida Homes Florida Foreclosure Filings in the Foreclosure Pipeline(1) # of filings # of homes 70,000 600,000 60,000 500,000 50,000 400,000 40,000 300,000 30,000 20,000 20
Slide 52: Energy Resources' 2012 Equivalent EBITDA by Asset Category
Energy Resources’ 2012 Equivalent EBITDA by Asset Category(1) ($ MM) Q3 2011 Primary Expectations(2) Actual Driver of Delta Contracted Wind $1,010 - $1,060 $940 Wind resource Contracted Other $445 - $475 $510 Decommissioning fund investment gains Texas Wind $200 - $250 $250 Northeast (Nuclear & Hydr
Slide 53: NextEra Energy Resources 2013 Portfolio Financial Information
NextEra Energy Resources 2013 Portfolio Financial Information (as of December 10, 2012) Equivalent Equivalent Contribution to 1 2 3 Expected Gross Margin % Gross Equivalent Remaining Following 1 Generation Range Margin EBITDA Contract Year PTC MWs Twh's $ in millions Hedged $ in millions Life Expira
Slide 54: Existing assets largely contracted or hedged for 2013
Energy Resources’ existing assets are largely contracted or hedged for 2013 2013 Equivalent Gross Margin Contributions(1) 2013 Portfolio Sensitivities 6% New Investments(2) • $1/MMBtu change in 12% natural gas ≈ 3 cents in Other (3) adjusted EPS(4) 57% 25% Contracted Assets Merchant Assets (98% hedg
Slide 55: NextEra Energy Resources 2014 Portfolio Financial Information
NextEra Energy Resources 2014 Portfolio Financial Information (as of December 10, 2012) Equivalent Equivalent Contribution to 1 2 3 Expected Gross Margin % Gross Equivalent Remaining Following 1 Generation Range Margin EBITDA Contract Year PTC MWs Twh's $ in millions Hedged $ in millions Life Expira
Slide 56: Existing assets largely contracted or hedged for 2014
Energy Resources’ existing assets are largely contracted or hedged for 2014 2014 Equivalent Gross Margin Contributions(1) 2014 Portfolio Sensitivities • $1/MMBtu change in 12% New Investments(2) natural gas ≈ 4-5 cents in adjusted EPS(4) 13% Other (3) 51% Contracted Assets (97% hedged) • 1% change i
Slide 57: Approximately $16.5 billion of credit received
NextEra Energy has received approximately $16.5 billion(1) of credit, including commitments and funded transactions Country Breakdown by Funding Norway $0.2 billion UK $1.4 billion Canada Japan $1.6 billion Germany $3.4 billion $1.8 billion France $1.3 billion Switzerland Spain $0.6 billion U.S. $3.
Slide 58: Cash quality of earnings comparable to other utilities
NextEra Energy’s cash quality of earnings is comparable to other utilities’ S&P 500 Electric Utility Index Companies Ratio of Cash Flow to Adjusted Earnings – 3-Yr Avg. (2009-2011)(1) Cash Flow to Adjusted Earnings Cash Flow to Adjusted Earnings Including Deferred Taxes(2) Excluding Deferred Taxes(3
Slide 59: The Investor Relations website is a great source for company information
The Investor Relations website is a great source for company information Investor Relations Website • You can find the IR home page here on the main www.nexteraenergy.com site: 59
Slide 60: Investor Relations website home page
The most current events and newly posted information will appear in the carousel at the top of the IR home page Investor Relations Website – Home Page 60
Slide 61: Earnings and supplements
You can access all of our quarterly earnings materials and listen to the webcast of the earnings call Investor Relations Website – Earnings & Supplements • Earnings call webcast and other materials can be accessed through the “Earnings Releases” section • Non-GAAP Reconciliations are available under
Slide 62: Other resources
You can also download any recent presentation, FPL and NEER asset portfolios, and other information Investor Relations Website – Other Resources • Under “Business Updates,” you can find NEE’s full asset portfolio and wind resource performance, among other items • All of the recent presentations are
Slide 63: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Net Income $791 $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)
Slide 64: Reconciliation of Adjusted EPS to EPS
NextEra Energy, Inc. Reconciliation of Adjusted Earnings Per Share to Earnings Per Share 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 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 $4.56 Adjustments: Net unrealized mark-to-mark
Slide 65: NextEra Energy Resources Reconciliation of Adjusted Earnings to Net Income
NextEra Energy Resources, LLC Reconciliation of Adjusted Earnings to Net Income ($ millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Net Income (Loss) $81 ($173) $192 $148 $146 $540 $461 $831 $759 $980 $774 $687 Adjustments, net of income taxes: Net unrealized mark-to-market (gai
Slide 66: Reconciliation of Cash Flow (Including Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Including Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income (1) Ratio 2009 2010 2011 Average 2009 2010 2011 Average Adjusted Cash Flow $3,686 $4,077
Slide 67: Reconciliation of Cash Flow (Excluding Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Excluding Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income (1) Ratio 2009 2010 2011 Average 2009 2010 2011 Average Adjusted Cash Flow $3,413 $3,566
Slide 68: 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 69: 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 70: 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
Slide 71: NEXT@Cra’
NEXT@Cra’ ENERGY &
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