Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Day (March 2015)
175 slides from Nextera Energy's investor day presentation, Mar 11, 2015
Slide 1: Investor Conference 2015
NE NexTera energy” ENERGY & PARTNERS
Slide 2: Cautionary Statements And Risk Factors That May Affect Future Results
Cautionary Statements And Risk Factors That May Affect Future Results This presentation includes forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from such forward-looking statements. The facto
Slide 3: Investor Conference 2015
Investor Conference 2015 Date: March 11, 2015 Location: New York, NY Presentation Speakers Time Opening Remarks 1:00 – 1:05 p.m. Introduction & Overview Jim Robo 1:05 – 1:35 p.m. Florida Power & Light Eric Silagy, Bob Barrett 1:35 – 2:15 p.m. Question & Answer 2:15 – 2:35 p.m. Break 2:35 – 2:50 p.m.
Slide 4: Introduction and Overview
INVESTOR CONFERENCE 2015 Introduction and Overview Jim Robo Chairman and CEO March 11, 2015
Slide 5: Agenda
Agenda • NextEra Energy Value Proposition • Growing a Multibillion Dollar Company • NEP Value Proposition • How NEE and NEP Support Each Other • The Role of M&A 5
Slide 6: Areas of focus have remained consistent since our last investor conference
Our areas of focus have remained consistent since our last investor conference in early 2013 NextEra Energy: Areas of Focus • At FPL: – Consistently deliver superior customer value through world class daily operations (low bills, high reliability, great customer service) – Invest capital in ways tha
Slide 7: Successful execution of the initiatives discussed in 2013
We have been very successful in executing the initiatives we discussed in 2013 March 2013 Key Initiatives and Status FPL FPL Current Status Focus on productivity 2014 base O&M declined ~$100 MM vs. 2012 Incremental storm hardening/reliability 2013-14 incremental CapEx: ~$450 MM Peaker upgr
Slide 8: Resolved key uncertainties and pursued new initiatives
We have also resolved key uncertainties and pursued new initiatives not discussed in 2013 Other Developments: 2013 - 2014 • FL Supreme Court affirmed 2012 FPL Rate Agreement • FL Governor Scott re-elected • PTC program extended through 2014 – Safe harbor period of 2014 extension expected through 201
Slide 9: 2014 was another very strong year for NextEra Energy
2014 was another very strong year for NextEra Energy 2014 Performance Review • Achieved adjusted EPS of $5.30(1) up 6.6% vs. 2013 • Successfully executed on ~$200 MM of annual O&M savings identified through Project Momentum • Outstanding operational performance and execution at both FPL and NEER • E
Slide 10: Long term track record of delivering value to shareholders
As a result, we extended our long term track record of delivering value to shareholders Adjusted Earnings Per Share(1) Total Shareholder Return(2) 35% 100% 93% $5.30 4.97 30% 28% 29% 4.39 4.57 80% 75% 3.84 4.05 4.30 25% 3.49 3.04 20% 60% 48% 2.49 2.63 14% 15% 40% 10% 20% 5% 0% 0% '04 '05 '06 '07 '08
Slide 11: Well positioned to continue track record for next four years
We are well positioned to continue this track record for the next four years FPL T&D FPL New FPL Gas Infrastructure Solar Reserves FPL FPL Energy FPL New Upgraded Company Generation Generation M&A Services $30 B - $34 B of capital Asset deployment FiberNet Transmission Growth NEP M&A from 2015 throu
Slide 12: Headwinds, uncertainties, and upside opportunities
Like all companies, we have our headwinds, uncertainties, and our upside opportunities Headwinds/Uncertainties Additional Potential/Upsides • PTC/ITC roll-off • Stronger commodity prices – 2007 was a ~1,000 MW wind • EPA Clean Power Plan installation year for NEER • Economics of renewables – Solar I
Slide 13: Our total return proposition remains attractive
Our total return proposition remains attractive Annual Value Proposition 2015 – 2018 Expected 8 – 10% • Expect to continue trend of 5 - 7% annual growth in adjusted EPS Expected – 2014 actual: $5.30(1) Growth Growth 5 – 7% – 2018 expected: $6.50 – $7.00(2) • Conservative payout ratio of 55% Dividend
Slide 14: NEE value proposition versus top 10 power companies
Some will argue that NEE’s value proposition is simply “middle-of-the-road” Annual Value Proposition(1) Top 10 Power Companies by Market Cap ~10% 8-10% ~8% ~8% ~7% ~7% ~6% ~5% ~1% NEE ~(5%) 14 (1) For peers, dividend yield plus adjusted EPS growth based on consensus estimates for 2016, CAGR from 201
Slide 15: 10-year adjusted EPS CAGR versus large caps
NEE has outperformed all but one of the large caps in the space in adjusted EPS growth over the last ten years 10-year Adjusted EPS CAGR(1) Top 10 Power Companies by Market Cap 10% 9.3% 7.8% 8% 6.9% 6% 5.1% Adj. EPS 4.1% 3.9% CAGR 4% 3.2% 2.8% (%) 1.8% 2% % NEE (2%) (1.5%) (4%) (1) See Appendix for
Slide 16: Quality of earnings growth
Investors may also wish to consider the quality of earnings growth 10-year Cumulative EPS Adjustments(1) Top 10 Power Companies by Market Cap GAAP higher 5% than 1% Adjusted EPS % Cumulative (0%) Adjusted Adjustments higher as % of (5%) than Cumulative (4%) (5%) GAAP Adjusted NEE (7%) EPS EPS (10%)
Slide 17: 10-year GAAP EPS CAGR versus large caps
NEE has grown GAAP EPS over the last decade faster than any of the large caps in the space 10-year GAAP EPS CAGR(1) Top 10 Power Companies by Market Cap 10% 8.5% 5.9% 5% 3.3% 2.0% 1.9% 1.7% 0.8% 0.7% GAAP EPS % CAGR (0.1%) (%) (5%) (3.8%) NEE Average (10%) (11.7%) (15%) +8% per year EPS growth for m
Slide 18: Culture focused on delivering results for shareholders
A key element of our track record and value proposition is a culture focused on delivering results for shareholders Culture of Delivering Results • Talent of our team • Key elements of our culture: – Financial discipline – Operational excellence – Continuous improvement – Growth/commercial skills •
Slide 19: Change in relative position of top global utilities
Over a sustained period of time, these factors lead to real change in relative position Top 20 Global Utility Equity Market Capitalization As of 6/1/2001 ($ MM) As of 12/31/2014 ($ MM) Market Market Rank Company Rank Company Cap Cap 1 Company A $38,574 1 Company D $59,087 2 Company B $38,185 2 Compa
Slide 20: Agenda
Agenda • NextEra Energy Value Proposition • Growing a Multibillion Dollar Company • NEP Value Proposition • How NEE and NEP Support Each Other • The Role of M&A 20
Slide 21: Long-Term Vision
Our starting point is a long-term vision Long-Term Vision • Largest, most profitable clean energy provider in the U.S. • Best skills and capabilities across the industry value-chain • FPL: the best utility in the U.S. – Operations – Regulatory environment – Customer value • Energy Resources: growing
Slide 22: Toe-in-the-water approach to growth
Our “toe-in-the-water” approach to growth tailors resources and risk to business maturity Increasing Capital Limited Commitment Limited Exposure R&D Pilot Early Growth Mature Monitoring Projects Stage Phase Operations • Ideas • Scope • Develop • Invest • Optimization • Identify • Monitor • Test • Bu
Slide 23: Growth strategy built around core strengths
A key part of our strategy has been to build around our core strengths, taking advantage of market opportunities Growth Strategy Core Strengths Operational Excellence + Financial Strength + Visible Growth Opportunities FPL Gas Skills 2014 Reserves 2013 Gas Pipelines + 2012 Distributed Solar Scale 20
Slide 24: Toe-in-the-water approach has been very successful
Our “toe-in-the-water” approach to growth has been very successful 70 FPL Wholesale 14,000 NEER Wind(1) ~ $60 11,427 60 12,000 Net 50 10,000 Income MW $ MM 40 8,000 30 6,000 20 4,000 1,745 10 2,000 ~ $0 0 0 2007 2014 2002 2014 NEE Utility-Scale Solar(1) Gas Pipelines 2,500 ~ 2,200 – 2,300 3.0 ~ $2.3
Slide 25: NextEra Energy has many opportunities to grow
NextEra Energy has many opportunities to grow FPL T&D FPL New FPL Gas Infrastructure Solar Reserves FPL FPL Energy FPL New Upgraded Company Generation Generation M&A Services Asset FiberNet Transmission Growth NEP M&A New Gas New New Contracted Midstream Wind Solar Gas-Fired Pipelines Generation Gas
Slide 26: Growth Capability
We challenge ourselves to improve our business from a position of strength Growth Capability • Balanced growth between our utility and renewables businesses remains central to our story • Our financial strength and discipline allow us to employ a “toe-in-the-water” approach – Supports R&D and monito
Slide 27: Agenda
Agenda • NextEra Energy Value Proposition • Growing a Multibillion Dollar Company • NEP Value Proposition • How NEE and NEP Support Each Other • The Role of M&A 27
Slide 28: NEP is the premiere company in the yieldco space
We believe NEP is the premiere company in the yieldco space and we are focused on sustaining this position Characteristics of a Great Yieldco NEP • Strong sponsor • Operational excellence • High quality projects • High-profile drop-down visibility • Well-aligned incentives 28
Slide 29: Pipeline of drop-down projects
A key determinant of the attractiveness of a yieldco is its pipeline of additional projects Drop-Down Assets as Multiple of Current Portfolio 11.5x 3.2x 2.3x 1.9x 0.6x 0.5x NEP (1) Power Yieldcos (2) (1) For NEP, includes ROFO assets, operating portfolio of contracted clean generation assets at pare
Slide 30: Alignment of interests provided by NEP structure
We believe NEP and NEE investors all benefit from the tight alignment of interests provided by the NEP structure IDR Fee Accretive Asset Sale Interest Increase Proceeds Drop- IDR Fee Downs Cash Flows Driving LP Unit Growth is the Key LP Distribution Growth Retained LP Stake 30
Slide 31: Re-affirming financial expectations for NEP
We are re-affirming our financial expectations for NEP NEP Expectations(1,2) Adjusted EBITDA CAFD 2015 $400 - $440 MM $100 - $120 MM 2016 $580 - $620 MM $170 - $190 MM • Grow LP unit distributions to an annualized rate of at least ~$1.13 (on a go-forward, annual basis) by end of 2015 • Thereafter gr
Slide 32: NEP expected to generate significant cash flow for NEE
NEP is expected to generate significant cash flow for NEE Total Cash Flows Received By NextEra Energy(1) $4 $3.4-$3.8 $3 $2.0-$2.4 $B $2 $1.2-$1.4 $0.9-$1.4 $0.9-$1.3 $1 $0.4-$0.5 $0 2015 2016 2017 2018 2019 2020 Drop-Down Proceeds LP Distributions IDR Fees $9 to $11 B of capital is expected to be r
Slide 33: NEP asset portfolio may become more diverse
Over time we expect that the NEP asset portfolio may become more diverse Characteristics of Potential Additional a Strong Yieldco Asset NEP Asset Classes • Strong, stable, predictable • Contracted fossil cash flow generation • Long term contract • Pipelines • Limited ongoing • Independent transmissi
Slide 34: Yieldco and MLP trading levels
NEP’s value proposition does not depend on third- party acquisitions; however, we expect to be competitive Yieldco and MLP Trading Levels 13% 11% 9% Annualized Dividend 7% Yield(1) 5% 3% 1% NEP Over time, we expect increasing differentiation among yieldcos; opportunities may emerge 34 (1) Dividend y
Slide 35: Agenda
Agenda • NextEra Energy Value Proposition • Growing a Multibillion Dollar Company • NEP Value Proposition • How NEE and NEP Support Each Other • The Role of M&A 35
Slide 36: NEP forms an excellent complement to NEE
NEP forms an excellent complement to NEE NEE offers NEP… NEP offers NEE… • Significant sponsor • Highlights the value of strength with proven contracted renewable development track record generation assets • Access to management, • Attractive opportunity to skills and industry-leading recycle capita
Slide 37: Agenda
Agenda • NextEra Energy Value Proposition • Growing a Multibillion Dollar Company • NEP Value Proposition • How NEE and NEP Support Each Other • The Role of M&A 37
Slide 38: Disciplined and opportunistic corporate M&A
We expect to continue to be disciplined and opportunistic in terms of corporate M&A Logic Constraints Implications • Strong • Moderate scale • Must set clear operational and economics boundaries management skills can create • Regulatory – Accretive within 1- value approval 2 years requirements • Fra
Slide 39: Florida Power & Light Overview
INVESTOR CONFERENCE 2015 Florida Power & Light Overview Eric Silagy President and CEO March 11, 2015 39
Slide 40: Agenda
Agenda • Introduction and Overview • Florida Power & Light Value Proposition 40
Slide 41: FPL: Areas of Focus
The FPL story has remained consistent since our last investor conference FPL: Areas of Focus • Unyielding commitment to customer value proposition – Low bills – High reliability – Excellent customer service • Focus on efficiency has driven best-in-class performance in operational cost effectiveness
Slide 42: Success against objectives laid out in March 2013
We have enjoyed great success against the objectives we laid out in March 2013 March 2013 Key Initiatives: Status • Executed well on major capital initiatives – Successfully completed extended nuclear power uprate program – Cape Canaveral and Riviera Beach generation modernization projects completed
Slide 43: Great set of opportunities ahead
We continue to have a great set of opportunities ahead of us Overview of Opportunities • We are focused on the underpinnings of our successful strategy: – Deploying incremental capital and focusing on O&M savings – Investments that benefit both investors and customers • Growth opportunities come fro
Slide 44: Agenda
Agenda • Introduction and Overview • Florida Power & Light Value Proposition 44
Slide 45: The Virtuous Circle
Our core strategy at FPL has been consistent for many years The “Virtuous Circle” Superior Customer Value Delivery Strong Customer Financial Virtuous Circle Satisfaction Position Constructive Regulatory Environment 45
Slide 46: Typical residential bills below Florida and national averages
FPL’s strategy continues to result in typical residential bills below both Florida and national averages Typical Customer Bill(1) $138.10 $122.71 $101.25 $97.12 FPL FPL FL IOU National 2014(2) (3) 2015 Average Average (5) (4) 2015 (1) Annual average rates based on a typical 1,000 kWh residential bil
Slide 47: Customer service
We continue to score well on customer service Customer Service • Edison Electric Institute – No. 1 in outstanding national key accounts customer service • E Source benchmarking – No. 1 in survey of large customers • Southeastern Electric Exchange – Industry excellence award for Customer Experience S
Slide 48: Low cost position and Project Momentum
Our value delivery is founded on a low cost position and we have executed well on our productivity initiative “Project Momentum” Operational Cost Effectiveness(1) $100.00 Good Adjusted Regressed Top Decile $/Retail MWh FPL 2013 = $15.19/MWh 2014 = $14.84/MWh Log/Log $10.00 1,000,000 10,000,000 100,0
Slide 49: Transmission and distribution infrastructure investments
We have focused on growth capital and long term infrastructure improvements that will improve system reliability Transmission and Distribution Infrastructure Investments • From 2015-2018 FPL expects to invest $3-4 B in T&D Potential Impact infrastructure investments of Reliability Investments(1) Ser
Slide 50: Generation modernization projects
Our major generation initiatives are on track Generation Modernization Projects • Produce a number of customer benefits: – 33% more fuel-efficient Cape Canaveral Next Generation – Expected to save customers more Clean Energy Center – opened 2013 than $1 B in fuel costs – Consistent with clean energy
Slide 51: Upgrading gas turbine peakers
We are upgrading our existing gas turbines “peakers” with more efficient, advanced combustion turbines Generation Upgrades • FPL currently has a fleet of 48 gas turbines or “peakers” to help ensure reliability – Original GTs went into service in the early 1970s with heat rates of over 13,000 Btu/kWh
Slide 52: Emissions reductions from replacing GT peakers
Replacing FPL’s existing GT peakers with new CT technology is expected to provide a significant reduction in emissions Generation Upgrades – Estimated Emissions Reductions % (1) (2) Existing New Reduction SOx 223 4 98% (Tons/Year) NOx (Tons/Year) 587 39 93% CO2 (Lbs/MWh) 2,289 1,312 43% Particulate
Slide 53: Upgrading 7FA combustion turbine compressors
We are upgrading 26 7FA combustion turbine compressors to the newest .05 design .05 Compressor Upgrades • Expected to reduce fuel cost for our customers by $600 MM over the life of the plants • Improve emissions profile Inlet Exhaust Gas Air • Estimated capital investment of $300 to $350 MM • Upgrad
Slide 54: 2019 combined cycle unit
Longer term, our state continues to grow and will require more infrastructure 2019 Combined Cycle Unit • $1.0-1.1 B capital investment • State of the art NGCC facility – 1,622 MW (Summer) facility – 6,293 BTU/kWh – Expect one of the lowest ever nominal cost per kW for a combined cycle unit – Expect
Slide 55: Acquisition of the Cedar Bay facility
FPL has the opportunity to create customer savings through an acquisition of the Cedar Bay facility Cedar Bay • The Cedar Bay cogeneration facility is a 250 MW coal-fired power plant in Jacksonville, FL • FPL has a contract with Cedar Bay for capacity and energy through 2024 • Signed purchase and sa
Slide 56: Three new large scale solar projects
We recently announced three new large scale solar projects that are cost effective for customers Solar Investment • Combined ~223 MW – $400 – 420 MM • Cost effective for customers: – Further reduces fuel cost – Further improves emissions profile – Reduce bill variability – Leveraging existing infras
Slide 57: Utility scale versus distributed solar generation
We are focused on identifying opportunities to deliver cost effective renewables for our customers Utility Scale vs. Distributed Solar Generation(1) Annual MWhrs Generated per $10 MM of Solar Capital Investment 14,000 13,000 12,000 10,000 8,000 5,800 6,000 4,000 3,100 2,000 0 Utility-Scale DG - C&I
Slide 58: CO2 emissions profile below Florida and national averages
FPL’s strategy continues to result in a CO2 emissions profile that is below both Florida and national averages FPL CO2 Emissions Profile 1,600 1,393 1,400 1,200 1,155 1,200 1,000 908 800 761 740 CO2 660 Lbs/MWh 600 400 200 0 FPL FPL Florida Florida National FPL EPA 2030 (2) 2012 2012 Average Average
Slide 59: Natural gas supply project
We continue to look for opportunities to drive out variable cost and improve customer economics Natural Gas Supply Project • Investments in gas production should drive significant benefits for our customers – Owning gas production provides a long-term hedge against potential price volatility • Woodf
Slide 60: FPL Summary
FPL remains focused on delivering outstanding customer value and deploying smart capital Summary • By focusing on delivering superior customer value, we put ourselves in the best position for regulatory proceedings… • By maintaining focus on productivity, we can deploy capital without driving up cus
Slide 61: FPL Financial Review and Outlook
INVESTOR CONFERENCE 2015 Florida Power & Light Financial Review and Outlook Bob Barrett Vice President Finance March 11, 2015 61
Slide 62: Agenda
Agenda • Customers and Economy • O&M Productivity • Capital Investments • FPL’s Earnings Equation 62
Slide 63: Florida economy growing at healthiest pace in years
The Florida economy is growing at its healthiest pace in years Annual Change in Florida Florida Unemployment(1) 400 Non-Farm Employment(2) 12% Lowest (1,000s) 10% unemployment rate since mid--2008 200 8% 0 5.6% 6% Strongest (200) employment growth 4% in nine years (400) 2% 0% (600) Jan-07 Jan-08 Jan
Slide 64: Florida population growth surpasses U.S. rate
Florida’s population growth has recently surpassed the U.S. rate and Florida is now the third most populous state Atlas World Group FL Population Growth(1) 2014 Migration(2) 5% (Annual Change) 4% Actual Projected FL growth has exceeded 3% U.S. since 2012, and this is expected to continue 2% 1% 0% 19
Slide 65: Modest increases in customers and sales
Florida’s continued economic growth should help FPL achieve modest increases in customers and sales in the next few years Weather-Normalized Retail Delivered Sales 12-month sum GWH FORECAST 114,000 +1.5% 112,000 +2% 110,000 +2% 108,000 +2% 106,000 104,000 102,000 100,000 98,000 96,000 94,000 2004 20
Slide 66: Customer growth and use per customer
The underlying components of our sales growth forecast are steady customer growth and near-term continued cyclical recovery in use per customer Annual Weather-Normalized Customer Growth Use per Customer (1,000s) FORECAST (KwH) FORECAST 90 23 1.3% – 1.6% customer 80 +0.5% Flat growth per year +0.5% 7
Slide 67: Agenda
Agenda • Customers and Economy • O&M Productivity • Capital Investments • FPL’s Earnings Equation 67
Slide 68: Base O&M efficiency best performance ever in 2014
FPL’s continued focus on base O&M efficiency delivered its best performance ever in 2014 FPL – Base O&M Costs in Real 2014 Dollars(1,2) 4.00 3.50 3.34 3.00 ¢ per kWh 2.50 (Real 2014 2.00 Dollars) 1.48 1.39 1.51 1.50 1.32 1.00 0.50 0.00 1988 2000 2005 2012 2014 (1) Cents per kWh expressed in real 201
Slide 69: Agenda
Agenda • Customers and Economy • O&M Productivity • Capital Investments • FPL’s Earnings Equation 69
Slide 70: FPL capital expenditures over the last decade
FPL has invested significantly over the last decade in modernizing both its generation fleet and its transmission and distribution (T&D) network $ MM FPL Capital Expenditures(1) $5,000 $4,000 $3,000 $2,000 $1,000 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 T&D Growth & Maintenance Gene
Slide 71: Projected capital expenditures
Significant opportunity set to continue these initiatives and further improve our already outstanding customer value proposition Projected Capital Expenditures(1) $B $5.0 $4.5 $3.9 - $4.3 $4.0 $3.4 - $3.7 $3.3 - $3.8 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 2015E 2016E 2017E - 2018E Annual Average (1
Slide 72: Average regulatory capital employed projected
FPL’s average regulatory capital employed is projected to be $36.0 B - $39.0 B by 2018 Average Regulatory Capital Employed $40 $36.0 - $39.0 $35 $30 $29.3 $25 $B $20 $15 $10 $5 $0 2014 2018E Regulatory capital employed is a function of capital expenditures, depreciation and retirements 72
Slide 73: Agenda
Agenda • Customers and Economy • O&M Productivity • Capital Investments • FPL’s Earnings Equation 73
Slide 74: Net income, regulatory capital employed and ROE
FPL’s net income is largely a function of capital employed, capital structure (equity ratio) and ROE earned Net Income, Regulatory Capital Employed and ROE Net Income Regulatory Capital Employed $1,600 $1,517 $35 $1,400 $1,349 $30 Total 13-Month Net $1,200 $29.3 $25 Average Income $1,000 $27.7 Regul
Slide 75: Categories of regulatory capital employed
FPL’s regulatory capital employed is comprised of several distinct categories of assets Regulatory Capital Employed 2014 13-Month Average • FPL’s adjusted retail rate base is the Total $29.3 B largest category of assets – Retail portion of net plant Clause AFUDC Projects – Retail portion of net work
Slide 76: Regulatory capital structure
FPL’s regulatory capital structure is comprised of more than investor sources FPL’s 2014 Retail Base Regulatory Capital Structure(1) Ratio Cost(2) Long-Term Debt 29.8% 4.79% Investor Sources Short-Term Debt 1.1% 2.25% Common Equity 46.3% 10.50% Customer Deposits 1.6% 2.04% Deferred Taxes 21.2% 0.00%
Slide 77: 2014 net income composition
Net income is largely a function of equity investment and return on equity 2014 Net Income Composition Average Average Implied Investment Equity Net Income ($ B) ($ B) ($ MM) Retail Rate Base $ 25.6 $ 11.9 $ 1,365 Non-Retail Rate Base $ 1.1 $ 0.5 $ 56 Clause Investment $ 1.5 $ 0.7 $ 75 AFUDC Project
Slide 78: Reserve amortization mechanism
During FPL’s settlement period, most of the variation in revenue and cost drivers is offset by the reserve amortization mechanism Reserve Amortization Mechanism • FPL is allowed to amortize up to $400 MM of remaining surplus depreciation and fossil dismantlement reserve during 2013-2016 – Through 20
Slide 79: FPL financial summary
FPL has successfully executed on capital plans since the last investor conference and continues to find new avenues of growth Financial Summary • FPL has a number of growth opportunities to provide value to customers and shareholders • A continued focus on productivity and cost savings initiatives c
Slide 80: NextEra Energy Resources Introduction
INVESTOR CONFERENCE 2015 NextEra Energy Resources Introduction Armando Pimentel President & CEO March 11, 2015
Slide 81: Energy Resources is a diversified clean energy company
Energy Resources is a diversified clean energy company whose skills and assets are well aligned to drive future growth Skills and Capabilities + Asset Portfolio Future Growth • Largest, most • Terrific portfolio of • Strong backlog of successful greenfield clean energy signed wind and solar develope
Slide 82: Energy Resources track record of growth
Energy Resources has a strong track record of growth Business Growth Adjusted EBITDA(1)(2) Adjusted Earnings(1)(2) 3,500 3,350 1,000 862 3,000 2,584 2,500 750 685 2,000 1,878 553 $ MM $ MM 500 1,500 1,000 622 250 173 500 351 73 0 0 2001 2003 2007 2011 2014 2001 2003 2007 2011 2014 Adjusted earnings
Slide 83: Diverse, clean and low-cost generation portfolio
Energy Resources’ generation portfolio is diverse in terms of technology and is clean and low-cost Generation Portfolio Portfolio by Technology(1) CO2 Emissions 1,400 1,200 Wind 1,000 58% 2014 800 Top 50 Power Natural lbs/ 600 Producer Gas MWh Average 400 Emissions(2) Oil 20% 4% 200 Nuclear 0 Solar
Slide 84: Growth driven by best-in-class development skills
Energy Resources growth is driven by its best-in- class development skills Growth in New Businesses Wind and Solar Portfolio(1) 18,000 Wind Customer Relationships 12,000 Solar Engineering/ Construction Regulatory MW Management 6,000 0 2002 2004 2006 2008 2010 2012 2014 2016E Best-In-Class Integrated
Slide 85: Projected CapEx through 2018
New wind, solar, and infrastructure investments are expected to drive CapEx through 2018 Projected CapEx Through 2018(1) Wind 6 $5.2-$5.6 Solar Energy Resources All Other (2) 5 $4.5-$4.9 Infrastructure (3) 4 $3.2-$3.6(4) $3.0-$3.4(4) $B 3 2 1 0 2015E 2016E 2017E 2018E (1) Includes Energy Resources’
Slide 86: Adjusted EBITDA and earnings expected to grow ~9% CAGR
Adjusted EBITDA and adjusted earnings are expected to grow at roughly a 9% CAGR from 2014 to 2018 Forecast Through 2018 Adjusted EBITDA(1)(2) Adjusted Earnings(1)(2) 6,000 4,600- 4,100- 5,000 2,000 3,600- 4,500 1,175- 4,000 3,900 1,500 1,050- 3,350 900- 1,125 1,250 $ MM $ MM 1,000 862 975 2,000 500
Slide 87: NEP expected to provide recycled capital through 2020
NextEra Energy Partners is expected to provide ~$9-$11 B of recycled capital through 2020 as well as a variety of other benefits for NextEra Energy NextEra Energy Partners – Value Through 2020(1) • Isolates and highlights the value of contracted renewable generation $7.5-$9.5 B $600-$700 MM Asset Sa
Slide 88: Renewable Development
INVESTOR CONFERENCE 2015 NextEra Energy Resources Renewable Development Mike O’Sullivan Senior Vice President Development March 11, 2015
Slide 89: Exceeded renewable development expectations shared in 2013
We have exceeded the renewable development expectations shared in 2013 2013-2014 Renewable Highlights • Brought into service nearly 2,300 MW of new Recent Development Activity contracted renewables 2,500 – ~1,275 MW of U.S. wind 2,000 – ~465 MW of Canadian wind ~1,675 (1) ~1,630 1,500 ~1,400 – ~545
Slide 90: Renewable Portfolio Standards support new renewables
Renewable Portfolio Standards (RPS) are expected to support ~5-8 GW(1) per year of new renewables through 2020 State RPS RPS-Driven Renewable • ~30-45 GW(1) of new wind Requirements by Region(2) and solar needed by 2020 120 100 • Demand concentrated in 80 the West GWh 60 • Proposed 50% RPS in 40 Cal
Slide 91: EPA Clean Power Plan drives renewable demand
Further out, demand for renewables will also be driven by the requirement for lower emission rates under the EPA Clean Power Plan EPA Clean Power Plan U.S. CO2 2020-2030 Potential Reduction Targets Renewable Demand 1,800 EPA’s “building 1,500 blocks” are Southeast used to hit 2030 PJM States 22% 1,2
Slide 92: Wind production tax credit extension
Energy Resources’ wind energy development is very well positioned to take advantage of the 2014 extension of PTCs Wind Production Tax Credit • Late in December 2014, the Federal Government extended the wind PTC program through the end of 2014 – Contingent upon IRS guidance, we believe our developmen
Slide 93: Wind technology cost and efficiency improvements
Turbine price reductions and efficiency improvements continue to reduce the average delivered cost of new wind installations Wind Technology Levelized Cost of Net Capacity Factor(1) Electricity from Wind(2) 60% $70 55% $60 50% $55- $65 $50 45% 0% PTC $/MWh $40 40% $36- $42 35% $30 $30- $36 $28- $32
Slide 94: Solar installation costs declining, efficiency improving
Solar installation costs are declining and efficiency is improving; the gap on price competitiveness versus conventional generation continues to narrow Solar Technology PV Module Efficiency Levelized Cost of and Delivered Cost(1) Electricity from Solar(2) 19.0% $0.80 $160 $0.71 18.0% Lower CapEx and
Slide 95: Utility scale solar demand and geography
For solar development, the amount of demand and geographic diversity has exceeded our expectations Utility Scale Solar Demand and Geography • Regional expansion of opportunity set is increasing • Solar has moved from a 2008-2012 Markets 2013-2016 desert southwest Markets and California RPS product i
Slide 96: Renewables development expectations 2015-2018
Energy Resources’ renewable program is well positioned for continued success Renewables Development Expectations Additional Additional Current 2015-2016 2017-2018 2015 – 2018 Backlog(1) Forecast Forecast U.S. Wind 980 1,100 – 1,300 750 – 850 Additional from PTC Extension -- -- 800 – 1,200(2) Canadia
Slide 97: Renewable development backlog
$4.8-$5.0 B of capital investments are supported by our backlog of projects with signed PPAs Renewable Development Backlog(1) Wind Location MW Solar Location MW Golden Hills CA 83 McCoy Solar CA 250 Golden West CO 249 Blythe CA 110 Carousel CO 150 California RAM CA 60 Cedar Bluff KS 199 Adelanto I &
Slide 98: Renewable development near-term pipeline
An additional $5.1-$5.3 B of capital expenditures are captured in our near-term pipeline Renewable Development Near-Term Pipeline Wind Region MW Solar Region MW Project B Central 250 Project O Central 140 Project C Central 200 Project P Central 100 Project D Central 200 Project Q Central 80 Project
Slide 99: Longer-term development pipeline
At roughly 10,000 MW, our longer term U.S. wind and solar development pipelines are capable of supporting growth through the end of this decade Renewable Development Longer-Term Pipeline Wind: 350-400 MW Wind: 2,500-2,700 MW Solar:100-500 MW Solar: 100-500 MW Wind: 500-550 MW Wind: 900-1,000 MW Sola
Slide 100: Battery storage potential game-changer
While still in its infancy, battery storage has the potential to be a game-changer for the renewable energy industry Storage Technology • Storage is a natural extension of Lithium Ion Battery our development business and Cost Curve and complements the balance of our Production(1) portfolio $1,200 40
Slide 101: Energy Resources Business and Financial Outlook
INVESTOR CONFERENCE 2015 NextEra Energy Resources Business and Financial Outlook John Ketchum Senior Vice President - Finance March 11, 2015
Slide 102: Agenda
Agenda • Energy Resources • Infrastructure (Gas Pipelines and Transmission) • Putting It All Together: Energy Resources + Infrastructure 102
Slide 103: Adjusted EBITDA mix shifts to contracted assets
Energy Resources' adjusted EBITDA mix continues to shift to contracted assets Business Mix by Adjusted EBITDA(1) • Growth is primarily in contracted businesses 100% 11% 12% 15% • Continue to consciously de-emphasize merchant 75% 24% 13% 40% • Peripheral businesses play 50% an important support role
Slide 104: Contracted asset portfolio growth to 2018
The contracted asset portfolio is primarily wind and is expected to grow from 12,945 MW(1) in 2014 to almost 18,000 MW in 2018 Contracted Assets Contracted Clean Energy 2018 Proforma Capacity(1) Capacity by 2018(1) Solar Nuclear 14% 9% Natural Gas 20.0 17.8 6% 15.0 Wind 12.9 71% GW 10.0 8.1 2018 Pro
Slide 105: Contracted nuclear earnings expected to grow
Energy Resources’ contracted nuclear earnings are expected to grow through 2018 Contracted Nuclear • Revenue from contracted nuclear Point Beach & Duane assets escalates through their term Arnold Adj. EBITDA(1)(2) • Achieved best-in-class nuclear $400 $330- performance in 2014 $340 – Best INPO index
Slide 106: De-emphasizing the merchant portfolio
Energy Resources continues to consciously de-emphasize the merchant portfolio, but is comfortable with the remaining positions Merchant Assets Business Mix by 2018 Proforma Adj. EBITDA(1) Adjusted EBITDA(1) ERCOT Wind 100% 22% 11% 12% 15% Forney/ Lamar 75% 24% 13% Seabrook 50% 23% 40% Other 5% 50% M
Slide 107: Merchant position well hedged through 2017
Our merchant position is well hedged through 2017 and margins benefit from best-in-class operations and strong capacity prices Managing Our Merchant Position Merchant Gross Fleet O&M(1) Margin(3) Hedged $13 12.36 Good 89% 87% 11.98 $12 71% 11.37 $/MWh 45% $11 10.75 $10 2012 2013 2014 2015E 2015 2016
Slide 108: Merchant strategy: maintain and optimize
Our merchant strategy is to maintain and optimize with long-term flexibility around our asset positions Merchant Strategy Seabrook • Seabrook: Adj. EBITDA(1) $600 – Efficient plant with excellent financial profile $400 $524 – Integral part of high performing $ MM fleet $200 $292 $305- $315 • Forney/
Slide 109: Peripheral businesses play a support role
Peripheral businesses play an important support role, but represent a limited portion of the portfolio Peripheral Businesses • Customer Supply & Trading is a Business Mix by Adjusted EBITDA(1) customer flow business guided by conservative risk management 100% 11% 12% 15% practices – Very little capi
Slide 110: Agenda
Agenda • Energy Resources • Infrastructure (Gas Pipelines and Transmission) • Putting It All Together: Energy Resources + Infrastructure 110
Slide 111: Gas pipeline assets
We have leveraged our skills and capabilities from Gas Infrastructure activities to expand into the pipeline business Gas Pipeline Assets Sabal Trail and Florida Southeast Connection (FSC) • NextEra to invest ~$1 B in Sabal – FPL received Florida PSC approval for transportation capacity contracts in
Slide 112: Roughly $2.5 B investment in gas pipelines by 2018
We expect to invest roughly $2.5 B in gas pipeline projects by 2018 Gas Pipeline Growth Cumulative CapEx(1) Adjusted Earnings(2) $3,000 $150 $2,250- $1,900- $2,450 $95- $100- $2,100 $120 $105 $2,000 $1,500- $100 $1,600 $ MM $ MM $50- $60 $1,000 $450- $50 $500 $10- $20 $75 $5 $0 $0 2014 2015E 2016E 2
Slide 113: NextEra Energy Transmission investments
NextEra Energy Transmission (NEET) is pursuing new transmission investments throughout North America NextEra Energy Transmission • Independent transmission Cumulative CapEx(1) company $1,500 Current operations $1,100- Expected projects – Includes transmission utilities $900- $1,150 and projects outs
Slide 114: Competitive transmission opportunity set
Lone Star was the first significant project for our transmission business followed by awards in Ontario and California Competitive Transmission Opportunity Set Awarded Projects Incremental Potential Texas Lone Star Competitive Solicitations Underway/Pending • 330 mile, 345 kV line and five substatio
Slide 115: Agenda
Agenda • Energy Resources • Infrastructure (Gas Pipelines and Transmission) • Putting It All Together: Energy Resources + Infrastructure 115
Slide 116: Energy Resources tailwinds outweigh headwinds
Energy Resources’ tailwinds significantly outweigh its headwinds Tailwinds Headwinds • Strong pipeline of wind and • PTC/ITC roll-off solar investments • Challenged commodity • Improving economics of prices renewables • PTC extension post-2016 • Recontracting opportunities • EPA Clean Power Plan • E
Slide 117: Roughly $15 B of growth capital
Plans include roughly $15 B of growth capital primarily related to wind, solar and infrastructure projects, in addition to roughly $1.5 B in maintenance capital Estimated Capital Expenditures Summary $6 Energy Resources Growth Capital(1) $5.2-$5.6 Infrastructure(2) $5 $4.5-$4.9 Maintenance Capital $
Slide 118: Adjusted EBITDA growth 2014 to 2018
Adjusted EBITDA is expected to grow at more than a 9% CAGR from 2014 to 2018 Adjusted EBITDA(1) Walk $6,000 $175- $4,600- $175- $100- $0- $225 $5,000 $5,000 $1,100- $68 $250 $175 $50 $1,200 All Infra- PPA $4,000 Customer Escalation Other structure(3) Gas Infra- Supply & $3,350(2) ($350) structure Tr
Slide 119: Adjusted earnings growth 2014 to 2018
Adjusted earnings is expected to grow at roughly a 9% CAGR from 2014 to 2018 Adjusted Earnings(1) Walk $1,400 $100- $1,175- $50- ($60- $1,250 $42 $150 $1,200 $25- $85 $80) $350- $400 $35 PPA All Infra- $1,000 Customer Escalation Gas Infra- Supply & Other structure(3) $862(2) ($218) structure Trading
Slide 120: NextEra Energy Partners
INVESTOR CONFERENCE 2015 NextEra Energy Partners Mark Hickson Senior Vice President March 11, 2015
Slide 121: Agenda
Agenda • Company Performance To Date • Asset Drop-Down Overview • Growth Outlook/NextEra Energy Value Proposition • Incremental Upside Opportunities 121
Slide 122: Strong performance of NEP to date
We are very pleased with the strong performance of NextEra Energy Partners (NEP) to date Company Performance To Date – Highlights • At the time of its launch, was the most successful initial public offering in the history of yieldco and MLP vehicles as measured by day one yield • Delivered solid ope
Slide 123: Agenda
Agenda • Company Performance To Date • Asset Drop-Down Overview • Growth Outlook/NextEra Energy Value Proposition • Incremental Upside Opportunities 123
Slide 124: NEP asset suitability criteria
NextEra Energy Partners (NEP) is focused on investing in clean energy assets with stable cash flows Asset Suitability Long-Term Contract √ Clean Energy Technology √ Creditworthy Counterparty √ “NEP-Able” Asset Stable Regulatory Environment √ Limited or Monetized Tax Credits √ Strong Operations √ Whi
Slide 125: Drop-down mechanics between NEP and NextEra Energy
Asset acquisitions (drop-downs) between NextEra Energy Partners and NextEra Energy are facilitated through NextEra Energy Operating Partners (OpCo) Drop-Down Mechanics • NEP Impacts: Public – Increases OpCo ownership Unitholders • OpCo Impacts: 1 Cash Units – Records PP&E at carrying value for book
Slide 126: Steps to determine LP distribution growth
There are three primary steps to determine the LP distribution growth that results from an acquisition… Drop-Down Mechanics – Generic Example(1) 15% Distribution Growth $2.00 1 2 3 $1.75 ($0.30) $0.64 ($0.30) ($0.17) $1.50 $0.64 ($0.17) $1.25 $1.13 $1.30 $$1.30 1.30 $$1.13 1.13 $1.00 Beginning New C
Slide 127: Accretion math for drop-downs
…with the math to determine the accretion being fairly straight forward Drop-Down Mechanics – Generic Example(1)(2) Existing New Total Additional CAFD from Project CAFD $200.0 $100.0 $300.0 acquired projects Mgmt Fee/Other Costs ($15.5) ($2.5) ($18.0) Payout Ratio ($36.9) ($19.5) ($56.4) 80% payout
Slide 128: LP distribution growth varies with assumptions
The amount of LP distribution growth can vary depending on the assumptions Drop-Down Mechanics – Generic Example(1) 7% CAFD Yield 3% Trading Yield $2.00 $2.00 $1.75 $1.75 ($0.37) ($0.35) $1.50 $0.64 $1.50 $0.64 $0.64 ($0.13) ($0.14) $1.25 $1.25 $$1.26 1.30 $ 1.30 $1.28 $$1.13 1.13 $1.13 $ 1.13 $1.00
Slide 129: Potential variance in CAFD yields
Relying on any one metric to determine acquisition value (e.g. CAFD) is full of pitfalls as a result of the different alternatives available to calculate and report Asset Valuation – Potential Variance In CAFD Yields(1) 15% 15% 15% 13% 13% 13% 11% 11% 11% 9% 9% 9% 7% 7% 7% 5% 5% 5% 1 3 5 7 9 1113151
Slide 130: Agenda
Agenda • Company Performance To Date • Asset Drop-Down Overview • Growth Outlook/NextEra Energy Value Proposition • Incremental Upside Opportunities 130
Slide 131: Near-term LP distribution growth outlook
Our current expectations are that NEP will grow its annual LP distributions to $1.13/unit, or 50% growth from the IPO, before the end of the year Near-Term Growth Outlook – LP Distributions/Unit $1.20 $0.27 $1.13 $1.00 $0.11 $0.80 $0.75 Mix of ROFO and Palo Duro PAYGO Tax Equity $0.60 Shafter $100-$
Slide 132: Long-term LP distribution growth outlook
After the acceleration of growth in 2015, our current expectations are NEP will grow LP distributions by 12-15% annually through 2020 Long-Term Growth Outlook – LP Distributions/Unit $2.50 $2.00 - $2.30 $2.25 $2.00 $1.75 $1.50 $1.25 $1.13 $1.00 $100-$120 $170-$190 $100-$120 CAFD(1) CAFD (1) $0.75 CA
Slide 133: Multiple potential sources of value for NextEra Energy
By aligning its interests with cash flow growth for LP unitholders, NextEra Energy is positioned to unlock multiple potential sources of value IDR Fee Accretive Asset Sale Interest Increase Proceeds Drop- IDR Fee Downs Cash Flows Driving LP Unit Growth is the Key LP Distribution Growth Retained LP S
Slide 134: Cumulative drop-down proceeds through 2020
NextEra Energy expects to receive $7.5-$9.5 B in cumulative drop-down proceeds through 2020 Drop-Down Proceeds(1) $4 $3 Increased $B $2 NEP cash flow Accelerated Growth Phase as a result of $3.0-$3.4 Genesis loan payoff $1 $1.7-$2.1 $1.1-$1.3 $0.8-$1.2 $0.7-$1.1 $0 $0.3-$0.4 2015 2016 2017 2018 2019
Slide 135: Annual cash flow from LP distributions and IDR fees
By 2020, NextEra Energy expects to receive well over $300 MM of annual cash flow from LP distributions and IDR Fees LP Distributions and Incentive Distribution Right (IDR) Fees(1) $450 $340-$430 $375 $250-$320 $300 $200-$260 $190-$230 $ MM $225 $130-$170 $145-$180 $80-$100 $150 $65-$80 $110-$130 $45
Slide 136: Total expected cash flows from NEP through 2020
In total, NextEra Energy expects $9-$11 B of total cash flows from NEP through 2020 Total Expected Cash Flows Received By NextEra Energy(1) $4 $3.4-$3.8 $3 $2.0-$2.4 $B $2 $1.2-$1.4 $0.9-$1.4 $0.9-$1.3 $1 $0.4-$0.5 $0 2015 2016 2017 2018 2019 2020 Drop-Down Proceeds LP Distributions IDR Fees (1) Ass
Slide 137: Value of NEP to NextEra Energy by 2020
As a result, the value of NEP to NextEra Energy could be substantial by 2020 LP Distribution and IDR Fee Value To NextEra Energy High-Growth GP Trading Multiple(1) 2020 Value of NEP to NEE 70x $21.0 $20.4 60x $17.3 $13.8 50x Mean: 43x $14.3 $11.3 $14.0 40x Median: 37x $8.8 $B 30x 35x GP 45x GP 55x G
Slide 138: Agenda
Agenda • Company Performance To Date • Asset Drop-Down Overview • Growth Outlook/NextEra Energy Value Proposition • Incremental Upside Opportunities 138
Slide 139: Potential pool of renewable assets for yieldco format
Overall, the potential pool of renewable assets that can move to the yieldco format over time is large MLP and Yieldco Size as Percentage of Addressable Market MLPs as a Percentage of Yieldcos as a Percentage of Total Midstream Market(1) Renewable Generation Market(1)(2) $1,245 B $475 B 47% ($580 B)
Slide 140: Third-party acquisition opportunities
In addition to NextEra Energy’s pipeline, NEP expects to evaluate third-party acquisition opportunities as another source of growth Incremental Upside Opportunities – Third-Party Acquisitions • Over time, we expect to see greater differentiation in yieldco valuations – We expect investors will rewar
Slide 141: Alternative financing strategies
As compared to an “all-equity” base case, growth could be enhanced by alternative financing strategies that help optimize NEP’s capital structure Incremental Upside Opportunities – Financing Alternatives High-Yield Term Loan B Debt Revolving Convertible Credit Debt Facility Optimal Capital Structure
Slide 142: Value created for NEP and NextEra Energy
Overall, we expect the relationship between NEP and NextEra Energy to create a substantial amount of value for both companies Summary Value for NEP Value For NextEra Energy(1) (1) Assumes 100% public equity issuance for drop-downs and trading yields consistent with current market conditions 142 (2)
Slide 143: Summary and Financial Outlook
INVESTOR CONFERENCE 2015 Summary and Financial Outlook Moray Dewhurst Vice Chairman and CFO, NextEra Energy, Inc. March 11, 2015
Slide 144: NextEra Energy growth drivers
We have an excellent opportunity set supporting our expected growth range NextEra Energy Growth Drivers • Florida Power & Light: – Capital opportunities of ~ $14 B to $16 B from 2015 – 2018 – Continued constructive regulatory environment • Energy Resources: – Deliver ~ 4,600 MW to 5,100 MW new contr
Slide 145: Adjusted EPS growth of 5% to 7% through 2018
We are well positioned to sustain our adjusted EPS trajectory of 5% to 7% per year through 2018 NextEra Energy Adjusted Earnings Per Share Expectations(1) $6.50 – • Base case plan assumes $7.00 no net “new” equity $5.75 – $6.25 • Forward portion of equity $5.40 – $5.70 announced in 2013 was settled
Slide 146: Business mix shifting to regulated and contracted
NextEra Energy’s business mix is expected to continue to shift towards more regulated and long- term contracted Adjusted EBITDA(2) from Adjusted Earnings from Regulated and Long-Term Regulated Businesses(1) Contracted Operations 100% 100% 84% 78% 80% 80% 66% 58% 60% 60% 40% 40% 20% 20% 0% 0% 2011 20
Slide 147: Operating cash flow and free cash flow
We expect our operating cash flow to continue to improve NextEra Energy’s Free Cash Flow 2015 2016 2018 Cash Flow from Operations $5.7 B - $6.1 B $6.7 B - $7.1 B $7.6 B - $8.0 B (1) Capital Expenditures ($8.0) B - ($9.0) B ($9.0) B - ($10.0) B ($6.5) B - ($7.5) B (2) Other Investing Activities $1.1
Slide 148: Hypothetical steady state cash flow
Free cash flow is largely a function of CapEx; our underlying productivity is strong Hypothetical “Steady State” Cash Flow (Based on 2016 expectations) Baseline Hypothetical Operating $6.7 B to $7.1 B Sustained $6.7 B to $7.1 B Cash Flow Capital (1) ($9.0) B to ($10.0) B Reduce Growth Capex ($1.8) B
Slide 149: Cash quality of earnings
NextEra Energy’s cash quality of earnings remains comparable to other utilities’ S&P 500 Electric Utilities Index Companies Ratio of Cash Flow to Adjusted Earnings – 4-Yr Avg. (2011-2014)(1) Cash Flow to Adjusted Earnings Cash Flow to Adjusted Earnings Including Deferred Taxes(2) Excluding Deferred
Slide 150: Balance sheet and credit ratings
NextEra will continue to manage its balance sheet to maintain its position as one of the strongest investment grade rated utilities Credit Ratings Distribution(1) Current NextEra Credit Ratings 35% S&P Moody’s Fitch 30% NextEra Energy Issuer Credit Rating A- Baa1 A- 25% Outlook Stable Stable Stable
Slide 151: Financing strategy 2015-2018
NextEra utilizes a variety of commercially accepted financing products across its capital structure Financing Strategy: 2015 - 2018 • At FPL: – Focus on long-dated maturities, but may selectively shorten up to meet market demand • At Capital Holdings: – During construction: Solar: utilize constructi
Slide 152: Cash flows from NEP in financing program
Cash flows coming up from NEP will be folded into our overall financial program Cash Flow from NEP to NEE NEE Financing Program • Supports achievement of targeted credit metrics Equity Expect ~$3.5 B – ~$4.5 B by 2018 Debt • Asset sale proceeds • Cash flows from NEP are expected to contribute • LP d
Slide 153: Credit metrics
NextEra’s credit metrics met the targets laid out for 2014 and are on track to continue to improve NextEra Energy Credit Metrics Actual Target Actual Projected Projected S&P A- Range 2013 2014 2014 2015 2016 FFO/Debt 23%-35% 23% 25% 25% 26% 26% Debt/EBITDA 2.5x-3.5x 3.5x 3.4x 3.2x 3.2x 3.2x Actual T
Slide 154: Dividend policy
NextEra Energy’s current dividend policy reflects the proportionate contribution from its rate- regulated businesses and long-term contracted assets Dividend Per Share Growth Dividend Policy $3.08(1) 2005 to 2015 CAGR: ~8% $2.90 • Conservative payout ratio $2.64 of 55% $2.40 $2.20 • We expect DPS gr
Slide 155: Appendix
INVESTOR CONFERENCE 2015 Appendix
Slide 156: NEX Tera
NEX Tera ENERGY &
Slide 157: Pension funded status versus peers
The funded status of NextEra’s pension plan remains well above that of its peers 2014 Pension Funded Status of 160% Large U.S. Electric Utilities(1) 150% 140% 120% 100% Peer median funded status: 85% 80% 60% 40% 20% 0% NEE Limited risk to NEE from changes in the funded status 157 (1) Source: SEC fil
Slide 158: FPL reconciliation of base O&M cents per kWh
Florida Power & Light Reconciliation of Base O&M Cents per kWh to GAAP O&M Cents per kWh Actual Actual Actual Actual Actual 1988 2000 2005 2012 2014 (in millions) Base O&M (A) $1,131 $984 $1,199 $1,500 $1,378 Clause 32 77 99 269 247 Other 0 1 9 4 (5) GAAP O&M (B) 1,163 1,062 1,307 1,773 1,620 Retail
Slide 159: Reconciliation of 2011 adjusted EBITDA to net income
Reconciliation of 2011 Adjusted Earnings Before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA) to Net Income (Full-Year Ended December 31, 2011) ($ in millions) GAAP Adjustments Adjusted (1) Net income $1,923 ($86) $1,837 Add back interest 1,034 0 1,034 (1) Add back income taxes 529
Slide 160: Reconciliation of adjusted earnings to net income
Reconciliation of Adjusted Earnings to Net Income ($ millions) 2011 Net Income $1,923 Adjustments, net of income taxes: Net unrealized mark-to-market losses (gains) associated with non-qualifying hedges (190) Loss (income) from other than temporary impairment losses, net 6 Loss on sale of natural ga
Slide 161: Reconciliation of EPS to adjusted EPS
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $2.48 $2.34 $3.23 $3.27 $4.07 $3.97 $4.74 $4.59 $4.56 $4.47 $5.6
Slide 162: Reconciliation of cash flow including deferred taxes
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Including Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income (1) Ratio 2011 2012 2013 2014 Average 2011 2012 2013 2014 Average Adjusted Cash Flow $3,
Slide 163: Reconciliation of cash flow excluding deferred taxes
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Excluding Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income (1) Ratio 2011 2012 2013 2014 Average 2011 2012 2013 2014 Average Adjusted Cash Flow $3,
Slide 164: Reconciliation of net income to adjusted earnings
NextEra Energy, Inc. Reconciliation of Net Income Attributable to NextEra Energy, Inc. to Adjusted Earnings ($ millions) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Net Income Attributable to NextEra Energy, Inc. $896 $901 $1,281 $1,312 $1,639 $1,615 $1,957 $1,923 $1,911 $1,908 $2,465 Adj
Slide 165: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings Expectations This presentation refers to adjusted earnings per share expectations. Adjusted earnings expectations exclude the unrealized mark- to-market effect of non-qualifying hedges, net OTTI losses on securities held in NextEra Ener
Slide 166: Definitional information
Definitional information These expectations should be read in conjunction with NextEra Energy’s SEC filings. The list of factors that could cause actual results to differ are discussed in the Appendix herein and in NextEra Energy’s SEC filings. These expectations are valid only as of March 11, 2015.
Slide 167: 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 168: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) threats of terrorism and catastrophic events that could result from terrorism, cyber attacks or other attempts to disrupt NextEra Energy's business or the businesses of third parties; inability to obtain adequate insurance
Slide 169: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) effect of inability of NextEra Energy subsidiaries to pay upstream dividends or repay funds to NextEra Energy or of NextEra Energy's performance under guarantees of subsidiary obligations on NextEra Energy's ability to meet
Slide 170: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 171: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA Expectations This presentation refers to adjusted EBITDA expectations. NEP’s adjusted EBITDA expectations represent projected revenue less fuel expense, project operating expenses, a portion of corporate G&A associated with these
Slide 172: 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 federal securities laws. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra
Slide 173: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP is subject to risks associated with litigation or administrative proceedings that could materially impact its operations, including future proceedings related to projects it subsequently acquires; the Summerhaven, Cones
Slide 174: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP's subsidiaries’ substantial amount of indebtedness may adversely affect NEP's ability to operate its business and its failure to comply with the terms of its subsidiaries’ indebtedness could have a material adverse effe
Slide 175: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP GP’s interest in NEP and the control of NEP GP may be transferred to a third party without unitholder consent; the IDR fee may be transferred to a third party without unitholder consent; NEP may issue additional units w