Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Edison Electric Institute Conference 2014
57 slides from Nextera Energy's conference presentation, November 2014
Slide 1: Edison Electric Institute Conference
Edison Electric Institute Conference Dallas, Texas November 11-13, 2014
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: Table of Contents
Table of Contents • NextEra Energy, Inc. Overview (NYSE: NEE) Slide 4 • Florida Power & Light Slide 9 • NextEra Energy Resources Slide 18 • NextEra Energy Partners, LP (NYSE: NEP) Slide 28 • Financial Review Slide 36 • Appendix Slide 42 3
Slide 4: NextEra Energy is comprised of two strong businesses supported by a common platform
NextEra Energy (NYSE: NEE) is comprised of two strong businesses supported by a common platform • $44 B market capitalization (1) • 44,257 MW in operation (2) • $72 B in total assets • One of the largest U.S. electric utilities • U.S. leader in renewable generation • 4.7 MM customer accounts • Asset
Slide 5: NextEra Energy – Investment Proposition
NextEra Energy is well-positioned for future growth NextEra Energy – Investment Proposition • Above-average and highly visible growth through 2016 – Rate agreement through 2016 provides visibility at FPL – Strong backlog at Energy Resources with upside potential • Strong and increasing cash flow fro
Slide 6: NextEra Energy – Partnership with NEP
NextEra Energy investment proposition is enhanced by the formation of NextEra Energy Partners (NYSE: NEP) NextEra Energy – Partnership with NEP • Best in class YieldCo vehicle through creation of – Strong sponsor with proven development track record – Extensive potential drop down visibility – Well-
Slide 7: Built on a foundation of operational excellence and financial strength, focused on clean generation
Built on a foundation of operational excellence and financial strength, and focused on clean generation Cost and Reliability Generation Profile 2013 Utility & Corporate Benchmarks 2013 NextEra Energy Fuel Mix MWhs(4) Good Industry 6.9% Nuclear Wind Good 27% 16% Industry ~$24 FL Avg ~97 Natural Gas C
Slide 8: In 2013, we continued our long-term record of delivering shareholder value
In 2013, we continued our long-term record of delivering shareholder value Adjusted Earnings Per Share(1) Total Shareholder Return(2) 35% 32% 90% 84% $4.97 30% 28% 80% $4.57 $4.30$4.39 70% $3.84 $4.05 25% 57% $3.49 60% $3.04 20% 50% $2.48$2.49 $2.63 38% 15% 13% 40% 30% 10% 20% 5% 10% 0% 0% One Year
Slide 9: 9
9
Slide 10: 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 • 4.7 MM customer accounts • 25,586 MW in operation • $10.4 B in operating revenues(1) • $38 B in total assets
Slide 11: FPL currently operates under a settlement agreement extending through the end of 2016
FPL currently operates under a settlement agreement extending through the end of 2016 Settlement Agreement • Effective for a four-year term beginning January 2013 through December 2016 • Base rate adjustment increase of $350 MM effective January 2013 and Generation Base Rate Adjustment (GBRA) upon c
Slide 12: Focus on efficiency has driven best in class performance
Focus on efficiency has driven best in class performance 2013 Operational Cost Effectiveness $100.00 Good Adjusted Regressed Top Quartile Top Decile $/Retail MWh(1) FPL 2013 = $15.19/MWh FPL 2016 Est. Log/Log $10.00 1,000,000 10,000,000 100,000,000 1,000,000,000 Retail MWh (1) FERC Form 1, 2013. Exc
Slide 13: Projected capital expenditures from 2013 to 2016 include ~$12.1 B backlog
Projected capital expenditures from 2013 to 2016 include ~$12.1 B backlog and up to $1 B incremental opportunities FPL Projected Capital Expenditures(1) $B $4.0 ~$2.9 - $3.6 $3.5 ~$3.3 ~$3.0 - $3.3 $3.0 ~$2.9 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 2013 2014 2015 2016 (2) (3) Committed Backlog Incremental Opp
Slide 14: FPL Capital Opportunities 2013 - 2016
We have made excellent progress on our major capital initiatives and continue to pursue incremental opportunities FPL Capital Opportunities 2013 - 2016 • ~$12.1 B Committed backlog – $9.2 B March ‘13 Investor Conference backlog remains on track – $2.9 B Added to backlog Storm hardening, reliability,
Slide 15: FPL pursuing development of three ~75 MW solar projects
FPL pursuing development of three ~75 MW solar projects to take advantage 2016 ITC window and prior development work Solar Investment • Combined ~225 MW – ~$1,500-$1,800 per kW • Expected in-service in 2016 • Existing FPL properties: – Manatee County – DeSoto County – Charlotte County • Near existin
Slide 16: FPL proposed an innovative plan to invest in natural gas supplies
FPL proposed an innovative plan to invest in natural gas supplies Natural Gas Supply Project • JV with PetroQuest • Up to 38 production wells in Woodford Shale region • Connected to existing natural (1) gas transportation • Capex estimated to begin at ~$70 MM, with potential growth up to ~$190 MM •
Slide 17: The Florida PSC has approved FPL's natural gas pipeline proposal
The Florida Public Service Commission has approved FPL’s natural gas pipeline proposal Natural Gas Pipeline Investments • Best economic solution for customers – Sabal Trail Transmission (Spectra Energy): – ~465 miles to Central Florida Hub – Estimated capital cost of ~$3 B – NextEra Energy to invest
Slide 18: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 19: What is Energy Resources?
What is Energy Resources? A Set of Skills + A Set of Assets • Largest greenfield developer in • Largest wind and solar renewable North America over the last decade portfolio in North America – Over 12,000 MW of greenfield • Over 11,000 MW of stable long-term development contracted projects • Leader
Slide 20: Energy Resources' generation portfolio consists of a diverse set of technologies
Energy Resources’ generation portfolio consists of a diverse set of technologies positioned in a number of regions Energy Resources’ Generation Portfolio(1) Wind Nat Gas 10,210 MW 3,990 MW Nuclear 2,721 MW Oil - 796 MW Solar - 477 MW Coal - 9 MW Contracted 63% Not Contracted 37% 20 (1) As of Decembe
Slide 21: NextEra Energy Resources Projected 2015 Portfolio Financial Information
NextEra Energy Resources Projected 2015 Portfolio Financial Information (As of September 11, 2014) ($ MM) Value of PTC's Remaining Adjusted included in Maintenance Pre-Tax Cash Contract MW EBITDA1 EBITDA2 Debt Service3 Capital4 Other 5 Flows6 Life7 NEP Existing 990 $265 - $275 - ($175 - $185) - ($15
Slide 22: Energy Resources has had a successful period of new contracted renewables origination
Energy Resources has had a successful period of new contracted renewables origination activity Wind and Solar Additions 2013 – 2016(1) COD and Total (MW) Contracted Potential Projected COD MW Incremental Potential 1,800 U.S. Wind U.S Solar 2013 – 2015 Wind Program 1,600 1,400 U.S. ~1,862 ~2,500+ 1,2
Slide 23: Renewable projects are increasingly price competitive with conventional generation
Renewable projects are increasingly price competitive with conventional generation U.S. Wind U.S. Solar Delivered Cost of Electricity(1) Delivered Cost of Electricity(2) Levelized cost to wholesale customer ($/MWh) Levelized cost to wholesale customer ($/MWh) $70 $67 $220 $200 $210 $60 $55 $180 $50
Slide 24: 111(d) has the potential to drive significant demand
111(d) has the potential to drive significant demand EPA Proposed CAA 111(d) Rule • Published on June 18, 2014 with 165 day comment period • Rule proposes state-by-state CO2 emission targets, expressed in pounds of CO2 per megawatt hour • State emission targets based on four building blocks – Effici
Slide 25: Energy Resources' strategy implies a shift towards long-term contracted assets
Energy Resources’ strategy implies a shift in portfolio mix towards long-term contracted assets Energy Resources Adjusted EBITDA(1) 100% 11% 15% 14% 75% 22% 40% 26% 50% 59% 64% 25% 49% 0% 2009 2012 2014 Long‐Term Contracted Merchant Peripheral Businesses (1) See appendix slide 49 for definition of A
Slide 26: Development activities for the Mountain Valley Pipeline project continue to progress
Development activities for the Mountain Valley Pipeline project continue to progress Mountain Valley Pipeline Project • JV with EQT • Designed to connect Marcellus and Utica shales with markets in the Southeast regions – ~300 mile natural gas pipeline – Route from existing Equitrans transmission sys
Slide 27: Energy Resources has a lot of different avenues for growth
Energy Resources has a lot of different avenues for growth Looking Ahead to 2017+ • Contracted wind and solar remain strategic over the long-term • “Toe in the water” – Distributed solar generation – C&I space – Storage – evolution of batteries and energy apps • Natural gas generation – Handful of p
Slide 28: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 29: NextEra Energy Partners – Investment Proposition
NextEra Energy Partners is a best-in-class YieldCo NextEra Energy Partners – Investment Proposition • Growth-oriented partnership formed by NextEra Energy – Strong sponsor with proven development track record – Access to management, skills and industry-leading expertise of NEE to monitor and operate
Slide 30: Initial portfolio of geographically diversified projects under long-term contracts
Initial portfolio consists of 10 geographically diversified projects operating under long-term contracts Initial Portfolio Capacity: ~990 MW Wind Asset Solar Asset Conestogo, 23 MW Bluewater, 60 MW Tuscola Bay, 120 MW Summerhaven, 124 MW Northern Colorado, 174 MW Sombra, 20 MW Moore, 20 MW Perrin Ra
Slide 31: Announced Acquisitions
NEP has entered into agreements to expand its portfolio through two project acquisitions from NextEra Energy Announced Acquisitions • Palo Duro: Fuel MW COD Contract ROFO Wind 249.9 4Q 2014 20-year No – Expect to earn PTCs and enter into a tax equity structure • Shafter: Fuel MW COD Contract ROFO So
Slide 32: NEP's distributable cash flow is driven by OpCo distributions
NEP’s distributable cash flow is driven by OpCo distributions Distribution Policy Public Unitholders • The operating subsidiaries manage the project entities, service debt payments and NextEra Energy NextEra Energy fund any maintenance CapEx Partners requirements • The OpCo manages the cash Distribu
Slide 33: Structure incorporates the IDR Fee structure from typical MLPs
Structure incorporates the IDR Fee structure from typical MLPs Incentive Distribution Fee Overview • IDR Fee entitles an affiliate of sponsor to receive an increasing share of distributions as benchmarks for OpCo distributions are achieved (up to 50%) Cash Flow $/ Unit & Split levels Example with $2
Slide 34: Aligned interests with NextEra Energy
Aligned interests with NextEra Energy IDR Fee Asset Sale Interest Proceeds Accretive Increase Drop- IDR Fee Downs Cash Flows Driving LP Unit Growth is the Key LP Distribution Growth Retained LP Stake 34
Slide 35: NextEra Energy Partners Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners Adjusted EBITDA and CAFD Expectations(1) Adjusted EBITDA CAFD (2) 2015 $400 - $440 MM $100 - $120 MM Unit Distributions 2015 ~$1.13 annualized rate by year end 2016 - 2020 12% - 15% average annual growth (1) See slide 54 for definition of Adjusted EBITDA and CAFD. 35 (2) Incl
Slide 36: Financial Review
NEXT@ra ANANCIAL REVIEW
Slide 37: NextEra Energy Adjusted Earnings Per Share Expectations
NextEra Energy Adjusted Earnings Per Share Expectations(1) 2014 $5.15 - $5.35 2015 $5.40 - $5.70 $5.50 - $6.00 2016 (5% - 7% CAGR off a 2012 base) (1) See slide 49 for definition of NextEra Energy, Inc. Adjusted Earnings 37
Slide 38: 2013 – 2016 Capital Expenditures
2013 – 2016 Capital Expenditures(1) ($ B) 2013 2014 2015 2016 (2) Committed Capital Expenditures FPL $2.9 $3.3 $3.0 $2.9 NEER Renewables 2.6 2.5 2.0 0.6 NEER Other 1.0 1.0 0.5 0.3 Corporate and Other 0.2 0.2 0.4 0.9 Total 6.7 7.0 5.9 4.7 Incremental Opportunities(3) FPL 0 - 0.3 0 - 0.7 NEER 0 - 0.3
Slide 39: Our current credit expectations are in line with the targets we set out in 2013
Our current credit expectations are in line with the targets we set out in 2013 2014 Credit Expectations 2014 Current (2) 2013 Actuals 2014 Target Expectations (1) S&P FFO / Debt 22.7% 25% 24% - 25% Debt / EBITDA(3) 3.5x 3.4x 3.2x - 3.3x Adj. Debt to Total Capital(3) 48.7% 48% 47% - 49% Moody's(1) C
Slide 40: Business mix expected to shift towards more regulated and long-term 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% 65% 58% 60% 60% 40% 40% 20% 20% 0% 0% 2011 201
Slide 41: NextEra Energy's current dividend policy
NextEra Energy’s current dividend policy reflects its expected increase in the proportionate contribution from its rate-regulated businesses and long-term contracted assets Dividend Per Share(1) Growth Dividend Policy • Implemented dividend policy $2.90(2) 2011 to 2014 CAGR: ~10% $2.64 of 55% target
Slide 42: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z 42
Slide 43: NextEra Energy
NEX Tera ENERGY &
Slide 44: The Investor Relations website is a great source for company information
The Investor Relations website is a great source for company information NEE Investor Relations Website • You can find the IR home page here on the main www.nexteraenergy.com site: 44
Slide 45: NextEra Energy Resources Portfolio Additions
NextEra Energy Resources Portfolio Additions(1,2) (3) March 2013 Investor Conference Backlog Incremental Opportunities Incl. in Incl. in (4) (4) U.S. Wind: MW COD Form 10-Q U.S. Wind: MW COD Form 10-Q (5) (5) Tuscola Bay II 100.3 2013 Yes Tuscola Bay II 100.3 2013 Yes (5) (5) Steele Flats 74.8 2013
Slide 46: Reconciliation of 2011 Adjusted EBITDA to Net Income
Reconciliation of 2011 Adjusted Earnings Before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA) to Net Income (Full-Year Ended December 31, 2011) ($ in millions) GAAP Adjustments Adjusted (1) Net income $1,923 ($86) $1,837 Add back interest 1,034 0 1,034 (1) Add back income taxes 529
Slide 47: Reconciliation of Adjusted Earnings to Net Income
Reconciliation of Adjusted Earnings to Net Income ($ 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 48: Reconciliation of Adjusted Earnings Per Share to Earnings Per Share
NextEra Energy, Inc. Reconciliation of Adjusted Earnings Per Share to Earnings Per Share 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Earnings Per Share (assuming dilution) $2.53 $2.48 $2.34 $3.23 $3.27 $4.07 $3.97 $4.74 $4.59 $4.56 $4.47 Adjustments: Net unrealized mark-to-market losses (
Slide 49: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings (Slide 37) 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 Energy
Slide 50: 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 51: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) failure or breach of NextEra Energy's or FPL's information technology systems; risks to NextEra Energy and FPL's retail businesses from compromise of sensitive customer data; losses from volatility in the market values of d
Slide 52: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 53: NextEra Energy Partners Portfolio Information
NextEra Energy Partners Portfolio Information(1) Contract Contract (2) NEP IPO Portfolio: Type MW COD Expiration NEP ROFO Portfolio : Type MW COD Expiration Northern Colorado Wind 22.5 Sept 2009 2029 Story II Wind 150 Dec 2009 2030 Northern Colorado Wind 151.8 Sept 2009 2034 Day County Wind 99 Apr 2
Slide 54: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA (Slide 35) 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 pr
Slide 55: 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 56: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) which face risks related to project siting, financing, construction, permitting, the environment, governmental approvals and the negotiation of project development agreements; NEP's ability to effectively consummate future
Slide 57: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Reimbursements and fees owed to NEP GP and its affiliates for services provided to NEP or on NEP's behalf will reduce cash available for distribution to or from NEP OpCo and from NEP to NEP's common unitholders, and the amo
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