Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (March 2012)
57 slides from Nextera Energy's investor presentation, Mar 8, 2012
Slide 1: March Investor Presentation
March Investor Presentation March 8-9, 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: Two strong businesses built on a common platform
NextEra Energy is comprised of two strong businesses built on a common platform… A premier regulated utility… …and a diversified, competitive power producer Engineering & Construction Supply Chain Nuclear Generation Non-nuclear Generation 3
Slide 4: Highly visible growth prospects
…with highly visible growth prospects… FPL Energy Resources Rate base growth… Largest ever renewable backlog… $B $30.0 • 1,150 to 1,500 MW of contracted U.S. $25.0 wind $20.0 • 850 to 950 MW of solar $15.0 • Approximately 600 MW of Canadian $10.0 $5.0 wind $0.0 • All expected to go into service 2011
Slide 5: Operational excellence and financial strength
…a foundation of operational excellence and financial strength… SAIDI: System Average (1) Interruption Duration Index Utility Credit Ratings(2) Minutes 175 Good NextEra 150 Industry Average Energy 30% 125 26% 100 FPL 25% 24% 75 50 20% 25 20% 17% '03 '04 '05 '06 '07 '08 '09 '10 '11 15% Fossil Reliabi
Slide 6: One of the cleanest emissions profiles among top 50 power producers
…one of the cleanest emissions profiles among the nation’s top 50 power producers… NextEra Energy 2011 Fuel Mix(1) SO2 Emissions Rates Hydro (MWh) (Lbs/MWh) 1.0% Solar 16 0.3% Nuclear 22% 12 Wind 13% Coal 8 6% NextEra Energy Natural Gas 4 Oil 1.0% 56% 0 NOx Emissions Rates CO2 Emissions Rates 4 (Lbs
Slide 7: 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) $4.30 $4.39 $21.7 $4.05 $3.84 $19.5 $3.49 $17.7 $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 '09 '10 '11 '0
Slide 8: Outperforming the electric utility industry
Over an extended period of time, we have been successful in attaining our goal of outperforming our industry NextEra Energy Performance vs. Electric Utility Industry 10-Year CAGR S&P 500 Electric NextEra Utility Energy Adjusted EPS Growth (2001-2011)(1) 2.2% 6.3% Dividends per Share Growth (2001-201
Slide 9: FPL
PL...
Slide 10: The virtuous circle
Our approach to the business is founded on the “virtuous circle” Customer Satisfaction Superior Constructive Customer Value Virtuous Circle Regulatory Delivery Environment Strong Financial Position 10
Slide 11: We deliver excellent value
We deliver excellent value 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 – December 2011(1) $170 R
Slide 12: Operational excellence and superior cost proposition
Value delivery is built on operational excellence and a superior cost proposition FPL O&M Per Retail kWh $2.50 2.28¢ $2.25 $2.00 Industry Average $1.75 1.64¢ $1.50 FPL(1) $1.25 $1.00 (1) Sources: Ventyx (FERC Form 1) and FPL O&M reported annually in the 10-K; Note: 1) Excludes storm recovery 12 cost
Slide 13: Investing heavily to improve long-term customer value
We are investing heavily to improve long-term customer value without driving up customer bills FPL’s Capital Expenditures(1) $3.5 $2.5 $B $1.5 $0.5 $(0.5) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E FPL’s Major Capital Projects Estimated Approx. Project Name Fuel Est. PSC In-
Slide 14: FPL will file for rate relief in 2012
FPL will file for rate relief in 2012 FPL 2012 Base Rate Proceeding • Capital investments (averaging $3 B per year between 2011 and 2013) improve system heat rate, lower fuel consumption – Investments benefit customers through lower fuel costs • Test Year Letter filed January 17, 2012 • Estimated $6
Slide 15: Base rate impacts offset by efficiency and lower fuel prices
Base rate impacts are expected to be offset by improved system efficiency and lower fuel prices FPL Base Rate Request: Bill Impacts • Base rates estimated to go up $6.80 per month(1), or 23 cents per day • Total typical residential bill is currently projected to go up about $3.00 per month(1), or no
Slide 16: New rates expected effective January 1, 2013
FPL expects new rates to be effective on January 1, 2013 Estimated FPL Rate Proceeding Timeline Late Late Q2 January 1, Q1 Q2 Early Q3 Q3 Q4 2013 File formal Quality of Intervenor, Final New rates staff, and FPL Rate rate request service decision by effective rebuttal hearings (testimony; hearings P
Slide 17: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 18: Building around core strengths at Energy Resources
Our strategy at Energy Resources has always been to build around our core strengths, taking advantage of market opportunities Energy Resources Strategy Core Strengths Visible Growth Opportunities + Operational Excellence + Financial Strength Skills New Solar + Scale Nuclear Business (Seabrook) + Sco
Slide 19: Strong portfolio and track record of earnings growth
We have built a strong portfolio and a track record of earnings growth Energy Resources Energy Resources Capacity Growth – 2002-2011 Adjusted Earnings(1) $ MM 792 800 1/01/02 Capacity 5,063 MW 737 679 Greenfield Development 10,516 MW 553 449 Asset Acquisitions 3,722 MW 258 Sales and Other (2,694) MW
Slide 20: 2012 through 2014 challenged by headwinds
2012 through 2014 will be challenged by headwinds… Natural Gas Prices(1) Production Tax Credit Roll-Off $/MMBtu $12 $ MM $10 $40 $37 $35 $35 $8 $30 $26 $25 $6 $20 $16 $15 $4 $9 $9 $10 $5 $2 $0 02 03 04 05 06 07 08 09 10 11 12 2009 2010 2011 2012E 2013E 2014E 20 20 20 20 20 20 20 20 20 20 20 Lower na
Slide 21: Largest backlog of renewable projects in our history
…but supported by the largest backlog of renewable projects in our history Estimated Capital Expenditures for Projects with a PPA(1) $4.2 B - $4.6 B Solar $2.1 B - $2.3 B $2.6 B - $3.0 B Solar $1.3 B - $1.5 B Wind $2.1 B - $2.3 B Wind $1.3 B - $1.5 B 2011-2012 2013-2014 In total, Energy Resources ha
Slide 22: Wind is no longer a niche business
Wind is no longer a “niche” business Wind Production Summary 2007 2008 2009 2010 2011 Effective Capacity(1) (MW) 4,173 5,388 6,493 7,624 8,386 Wind Production (MM MWh) 11.4 15.4 15.8 20.4 24.6 Implied Average Capacity Factor 31% 33% 28% 30% 34% Total Production Eligible for PTCs (MM MWh) 10.5 14.4 1
Slide 23: Lone Star Transmission
L®NEStar NESTA
Slide 24: Lone Star CREZ line regulated growth opportunity
Successful development of Lone Star’s CREZ line represents a significant regulated growth opportunity Lone Star Transmission CREZ Line • In January 2009, Lone Star was selected by Texas PUC as a CREZ(1) transmission service provider – ~320-mile line – ~$800 million of rate base • Received approval f
Slide 25: Expected adjusted EPS growth through 2014
Together, NextEra Energy’s investment opportunities form the basis for our expected adjusted earnings per share growth through 2014 NextEra Energy Adjusted Earnings Per Share Growth Adj. EPS $6.00 $5.05 - $5.65 $5.00 $4.39 $4.00 $3.00 $2.38 $2.00 $1.00 $0.00 2001 2011 2014E Note: See Appendix for re
Slide 26: Future free cash flow scenarios
An attractive option Future Free Cash Flow Scenarios “Backlog Only” Scenario(1) Alternate Scenario 2011 2014 • Additional attractive investment opportunities Cash from $4.1 B $5.0 - $5.5 B are identified Operations Less: Cash to $6.5 B $3.5 - $4.0 B Investing • Reduced free cash flow Free Cash Flow
Slide 27: Business mix shifting to regulated and contracted
NextEra Energy’s business mix is expected to shift to a more regulated and long-term contracted business by 2014 Adjusted EBITDA(1) from Adjusted Earnings from Regulated and Long-Term Regulated Businesses Contracted Operations 100% 100% 84% 78% 80% 80% 65% 58% 60% 60% 40% 40% 20% 20% 0% 0% 2011 2014
Slide 28: Cash quality of earnings comparable to other utilities
NextEra Energy’s cash quality of earnings is comparable to other utilities’ S&P 500 Electric Utility Index Companies Ratio of Cash Flow to Adjusted Earnings – 3-Yr Avg. (2008-2010)(1) Cash Flow to Adjusted Earnings Cash Flow to Adjusted Earnings Including Deferred Taxes(2) Excluding Deferred Taxes(3
Slide 29: Closing Summary
Closing Summary • Visible growth prospects • A solid foundation – Operational excellence – Financial strength – Clean emissions profile • Proven track record of success – Building businesses – Delivering growth – Creating shareholder value 29
Slide 30: 2012 key objectives set stage for growth through 2014
Achievement of NextEra Energy’s 2012 key objectives sets the stage for growth through 2014 Critical Success Factors for 2012 • At FPL: – Continue to deliver outstanding customer value – Continue execution on major capital projects – Achieve satisfactory outcome of base rate case • At Energy Resource
Slide 31: NextEra Energy
NExTera’ ENERGY @
Slide 32: Appendix
N Gone ENERGY & = Appendix
Slide 33: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net Income $791 $479 $903 $896 $901 $1,281 $1,312 $1,639 $1,615 $1,957 $1,923 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses asso
Slide 34: Reconciliation of Adjusted Earnings Per Share to Earnings Per Share
NextEra Energy, Inc. Reconciliation of Adjusted Earnings Per Share to Earnings Per Share 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Earnings Per Share (assuming dilution) $2.34 $1.38 $2.53 $2.48 $2.34 $3.23 $3.27 $4.07 $3.97 $4.74 $4.59 Adjustments: Net unrealized mark-to-market (gains)
Slide 35: NextEra Energy Resources Reconciliation of Adjusted Earnings
NextEra Energy Resources, LLC Reconciliation of Adjusted Earnings to Net Income ($ millions) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Net Income (Loss) $81 ($173) $192 $148 $146 $540 $461 $831 $759 $980 $774 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses
Slide 36: 2011 Sources and Uses of Cash
Reconciliation of Adjusted to GAAP 2011 Sources and Uses of Cash (Full Year Ended December 31, 2011) USES SOURCES Limited Commercial Recourse FPL Differential Paper, Cash to Common Total Cash From Project Mortgage Membership Corporate Cash, & Total Investing Dividends Uses Operations Debt (net) Bond
Slide 37: Reconciliation of 2011 Adjusted EBITDA to EBITDA
Reconciliation of 2011 Adjusted Earnings Before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA) to EBITDA (Full-Year Ended December 31, 2011) GAAP Adjustments Adjusted (1) Net income $1,923 ($86) $1,837 Add back interest 1,034 0 1,034 (1) Add back income taxes 529 (57) 472 Add back d
Slide 38: Cash Flow/Adjusted Earnings Reconciliation (Including Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Including Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income(1) Ratio 2008 2009 2010 Average 2008 2009 2010 Average Adjusted Cash Flow $3,556 $3,686
Slide 39: Cash Flow/Adjusted Earnings Reconciliation (Excluding Deferred Taxes)
NextEra Energy, Inc. Reconciliation of Cash Flow/Adjusted Earnings to Cash Flow from Operations/Net Income (Excluding Deferred Taxes) Cash Flow to Cash Flow from Adjusted Earnings to Net ($ MM) Operations Income(1) Ratio 2008 2009 2010 Average 2008 2009 2010 Average Adjusted Cash Flow $2,987 $3,413
Slide 40: Cautionary Statement And Risk Factors
Cautionary Statement And Risk Factors That May Affect Future Results In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), NextEra Energy, Inc. (NEE) and Florida Power & Light Company (FPL) are hereby providing cautionary statements ident
Slide 41: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected if they are unable to recover in a timely manner any significant amount of costs, a return on certain
Slide 42: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEER also depends heavily on investment cost recovery mechanisms currently available through the American Recovery and Reinvestment Act of 2009 (Recovery Act). The Recovery Act includes, among other things, provisions that
Slide 43: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The Dodd-Frank Act, enacted into law in July 2010, among other things, provides for the regulation of the OTC derivatives market. The Dodd-Frank Act includes provisions that will require certain OTC derivatives, or swaps, t
Slide 44: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Federal or state laws or regulations may be adopted that would impose new or additional limits on the emissions of greenhouse gases, including, but not limited to, CO2 and methane, from electric generating units using fossi
Slide 45: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEE's and FPL's provision for income taxes and reporting of tax-related assets and liabilities require significant judgments and the use of estimates. Amounts of tax-related assets and liabilities involve judgments and esti
Slide 46: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The operation and maintenance of NEE's and FPL's electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities are subject to many operational risks, the consequences of w
Slide 47: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Weather conditions directly influence the demand for electricity and natural gas and other fuels and affect the price of energy and energy-related commodities. In addition, severe weather, such as hurricanes, floods and ear
Slide 48: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Insurance coverage may not continue to be available or may not be available at rates or on terms similar to those presently available to NEE and FPL. The ability of NEE and FPL to obtain insurance and the terms of any avail
Slide 49: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) If price movements significantly or persistently deviate from historical behavior, NEE's and FPL's hedging and trading procedures and associated risk management tools may not protect against significant losses. NEE and FPL
Slide 50: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEE and FPL are highly dependent on sensitive and complex information technology systems, and any failure or breach of those systems could have a material adverse effect on their business, financial condition, results of op
Slide 51: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEE and FPL could recognize financial losses as a result of volatility in the market values of derivative instruments and limited liquidity in OTC markets. NEE and FPL execute transactions in derivative instruments on eithe
Slide 52: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEE's and FPL's business, financial condition, results of operations and prospects could be negatively affected by the lack of a qualified workforce or the loss or retirement of key employees. NEE and FPL may not be able to
Slide 53: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) In the event of an incident at any nuclear generation facility in the U.S. or at certain nuclear generation facilities in Europe, NEE and FPL could be assessed significant retrospective assessments and/or retrospective insu
Slide 54: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEE's and FPL's nuclear units are periodically removed from service to accommodate normal refueling and maintenance outages, and for other purposes. If planned outages last longer than anticipated or if there are unplanned
Slide 55: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEE's and FPL's liquidity may be impaired if their creditors are unable to fund their credit commitments to the companies or to maintain their current credit ratings. The inability of NEE's, NEECH's and FPL's credit provide
Slide 56: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEE's subsidiaries are separate legal entities and have no independent obligation to provide NEE with funds for its payment obligations. The subsidiaries have financial obligations, including, but not limited to, payment of
Slide 57: NextEra Energy
NExTera’ ENERGY @