Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q3 2012 Earnings Presentation
38 slides from Nextera Energy's earnings presentation, Oct 24, 2012
Slide 1: Earnings Conference Call Third Quarter 2012
Earnings Conference Call Third Quarter 2012 October 24, 2012
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: We are executing well on our 2012 objectives
We are executing well on our 2012 objectives Third Quarter 2012 Highlights • Solid financial results despite challenging market conditions • 2012 execution programs remain on track – At FPL, we continue to invest capital at record rate to deliver superior value to customers – Evidentiary hearing on
Slide 4: FPL delivered solid quarterly earnings growth from capital deployment
FPL delivered solid quarterly earnings growth as a result of continued capital deployment to improve customer value Florida Power & Light Results –Third Quarter Net Income EPS $ MM $0.93 $392 $0.83 $347 2011 2012 2011 2012 4
Slide 5: FPL's earnings per share grew 10 cents over the comparable quarter
FPL’s earnings per share grew 10 cents over the comparable quarter, driven by continued investment in the business Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Invested(1) Third Quarter $B $25.6 FPL – 2011 EPS $0.83 $25.0 $21.7 Drivers: $20.0 New investment growth $0.
Slide 6: FPL's Major Capital Projects
Our modernization projects and nuclear uprates will drive significant fuel savings for FPL customers over the lives of the plants FPL’s Major Capital Projects Modernization Projects Nuclear Uprates • Cape Canaveral is 86% • St. Lucie Unit 1 and Turkey complete and is on time and Point Unit 3 both co
Slide 7: Economic indicators for Florida are mixed but moving in a positive direction
Economic indicators for Florida are mixed but moving in a positive direction Florida Economy Florida Unemployment Rate(1) $B Tourism Taxable Sales(2) (12 month moving sum) 12% $72 11% $70 10% $68 9% $66 8% $64 7% $62 6% 5% $60 4% $58 3% $56 2% $54 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-07 Jan
Slide 8: Florida's housing market continues to show signs of improvement
Florida’s housing market continues to show signs of improvement Florida Housing Market Delinquent Mortgages Mortgage Delinquencies(1) # of Supply of Inventory by (%) 8% Months 16 Number of Months(2) 7% 14 Townhouse / 6% Condo 12 5% 10 4% 8 Single - 3% 6 Family 2% 4 1% 2 0% 0 2008 Q2 2009 Q2 2010 Q2
Slide 9: FPL's volume metrics continue to improve gradually
FPL’s volume metrics continue to improve gradually Customer Characteristics – Third Quarter 2012 Retail kWh Sales(1) Customer Growth(2) (Change vs. prior-year quarter) (Change vs. prior-year quarter) 100 Customer Growth 0.7% 80 + Usage Growth Due to Weather -3.2% # of 60 Customers + Underlying Usage
Slide 10: FPL has signed a settlement with three intervenors
FPL has signed a settlement with three intervenors; settlement hearing is scheduled for November 19-21 FPL Base Rate Request Proposed Settlement • Main components of settlement: – Effective January 2013 through December 2016 – $378 MM retail base revenue increase effective January 2013 – Allowed reg
Slide 11: Energy Resources' adjusted earnings decreased 11 cents over the comparable quarter
Energy Resources’ adjusted earnings decreased 11 cents over the comparable quarter in 2011 Energy Resources Results– Third Quarter GAAP Adjusted(1) Net Income EPS Net Income EPS $ MM $ MM $0.16 $204 $67 $0.49 $162 $0.38 $44 $0.10 2011 2012 2011 2012 2011 2012 2011 2012 11 (1) See Appendix for reconc
Slide 12: Energy Resources adjusted EPS contribution drivers; comfortable with full-year outlook
Energy Resources’ adjusted earnings decreased 11 cents over the comparable quarter but we remain comfortable with our full-year outlook Energy Resources Third Quarter $0.80 Adjusted EPS(1) Contribution Drivers $0.06 ($0.21) $0.13 $0.60 $0.49 ($0.06) ($0.03) $0.40 $0.38 $0.20 $0.00 Q3 2011 Customer N
Slide 13: Energy Resources: Development Highlights
Energy Resources continues to make good progress in developing its record backlog of renewables projects Energy Resources: Development Highlights • Executing well on our backlog of renewables projects: – 80 MW of U.S. wind added during the quarter – Expect to add over 1,200 MW of U.S. wind during th
Slide 14: NextEra Energy EPS Summary – Third Quarter
NextEra Energy’s adjusted earnings per share decreased 5 cents over the comparable quarter in 2011 NextEra Energy EPS Summary – Third Quarter GAAP 2011 2012 Change FPL $0.83 $0.93 $0.10 Energy Resources $0.16 $0.10 ($0.06) Corporate and Other ($0.02) ($0.05) ($0.03) Total $0.97 $0.98 $0.01 Adjusted(
Slide 15: Capital Plans: free cash flow positive in 2014
We continue to expect to be free cash flow positive in 2014 Capital Plans • $650MM of equity units issued in September completes near- term equity needs based on current backlog – Brings total equity units issued in 2012 to $1.25B • Expect rate-regulated businesses and assets under long- term contra
Slide 16: Adjusted Earnings Per Share Expectations
Adjusted Earnings Per Share Expectations 2012 $4.35 - $4.65 2014 $5.05 - $5.65 NextEra Energy’s adjusted earnings expectations exclude the cumulative effect of adopting new accounting standards, the unrealized mark-to-market effect of non-qualifying hedges, and net other than temporary impairment lo
Slide 17: Critical Success Factors for 2012
Achievement of NextEra Energy’s 2012 key objectives sets the stage for growth through 2014 Critical Success Factors for 2012 • At FPL: – Continue to deliver outstanding customer value – Continue execution on major capital projects – Achieve satisfactory outcome of base rate case • At Energy Resource
Slide 18: NEXT@Cra’
NEXT@Cra’ ENERGY &
Slide 19: Q&A Session
19 Q&A Session NEXTera’ ENERGY &
Slide 20: NEXT@Cra’
NEXT@Cra’ ENERGY &
Slide 21: Appendix
21 Appendix NEXTera’ ENERGY &
Slide 22: 2013 Portfolio Financial Information
2013 Portfolio Financial Information (as of September 7, 2012) Equivalent Equivalent Equivalent 1 1 2 3 Expected Gross Margin % Gross EBITDA Remaining Following Generation Range Margin Range Contract Year PTC MWs Twh's $ in millions Hedged $ in millions Life Expiration Contracted 4 Wind 8,218 26.1 $
Slide 23: Energy Resources' 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(5) • $1/MMBtu change in natural gas ≈ 3-4 cents in 12% Other (2) adjusted EPS(3) 56% 26% Contracted Merchant Assets • 1% change in
Slide 24: 2014 Portfolio Financial Information
2014 Portfolio Financial Information (as of September 7, 2012) Equivalent Equivalent Equivalent 1 1 2 3 Expected Gross Margin % Gross EBITDA Remaining Following Generation Range Margin Range Contract Year PTC MWs Twh's $ in millions Hedged $ in millions Life Expiration Contracted Wind4 8,218 26.4 $1
Slide 25: Energy Resources' 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 12% New Investment(5) • $1/MMBtu change in natural gas ≈ 6-7 cents in 13% Other(2) 50% adjusted EPS(3) Contracted Assets (97% hedged) 24% • 1% change
Slide 26: Wind Resource Performance
Wind Resource Performance Gross1 MWh Production: Actual vs. Long Term Expected Average (Fifteen month trend ended September 30, 20122) 2011 2012 3rd QTR YTD 4th QTR YTD 1ST QTR 2nd QTR 3rd QTR YTD 3 Location MW Jul Aug Sep % % MW % % MW % MW % MW Jul Aug Sep % % Midwest 2,865 81% 83% 82% 82% 90% 2,8
Slide 27: NextEra Energy Resources – Wind Portfolio Locations
NextEra Energy Resources – Wind Portfolio Locations1 September 30, 2012 Mount Copper 54mw Mount Miller 54mw Ghost Pine 81.6mw Ashtabula II 120mw Baldwin 102.4mw Oliver County I&II Midwest 2,865 MW 50.6mw / 48mw West 2,475 MW Wilton I&II Langdon I&II 49.5mw / 49.5mw 118.5mw / 40.5mw Pubnico Point 30.
Slide 28: Additional investments at FPL will drive an increasing rate base
Additional investments in generation and infrastructure at FPL will drive an increasing rate base Regulatory Capital Employed(1) $B $30 $27.0 - $28.0 $24.9 - $25.3 $25 $20 $15 $10 $5 $0 2012 2013 Retail Rate Base Other 28 (1) 13-month average; includes retail rate base, wholesale rate base, clause-r
Slide 29: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 6/30/12 $536.4 Amounts Realized During 3rd Quarter 35.0 Primary Drivers: Revenue Hedges – Gas Change in Forward Prices (all positions) (166.0) & Power Prices ($167.3) Subtotal – Income Statement (1
Slide 30: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) 1st Quarter 2nd Quarter Asset / Deals Asset / Deals Asset / (Liability) Change in Executed Total (Liability) Change in Executed Total (Liability) Balance Amounts Forward During Unrealized Balance Amounts Forward During Unrealized
Slide 31: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges(1) – Summary of Forward Maturity ($ millions, after-tax) Gain / (Loss) (2) Asset / (Liability) Balance Total Description 9/30/12 2012 2013 2014 2015 2016 - 2032 2012 - 2032 Natural gas related positions $ 492.5 $ (28.0) $ (94.8) $ (87.5) $ (77.1) $ (205.1) $ (492.5) Spark sprea
Slide 32: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Three Months Ended September 30, 2011) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 347 $ 67 $ (7) $ 407 Adjustments, net of income taxes: Net unrea
Slide 33: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Three Months Ended September 30, 2012) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 392 $ 44 $ (21) $ 415 Adjustments, net of income taxes: Net unre
Slide 34: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Nine Months Ended September 30, 2011) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 852 $ 371 $ 33 $ 1,256 Adjustments, net of income taxes: Net unre
Slide 35: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings(1) to GAAP Net Income (Nine Months Ended September 30, 2012) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 984 $ 516 $ (18) $ 1,482 Adjustments, net of income taxes: Net un
Slide 36: 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 37: Cautionary Statements and Risk Factors That May Affect Future Results
Cautionary Statements 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, b
Slide 38: Cautionary Statements and Risk Factors That May Affect Future Results
Cautionary Statements and Risk Factors That May Affect Future Results risks to NextEra Energy and FPL's retail businesses of compromise of sensitive customer data; risks to NextEra Energy and FPL of volatility in the market values of derivative instruments and limited liquidity in OTC markets; impac