Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q3 2014 Earnings Presentation
36 slides from Nextera Energy's earnings presentation, Oct 31, 2014
Slide 1: Earnings Conference Call Third Quarter 2014
Earnings Conference Call Third Quarter 2014 October 31, 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: Successful third quarter for both NEE and NEP
Successful third quarter for both NEE and NEP Third Quarter 2014 Highlights • FPL: – Strong financial and operating performance – Major capital projects on track – Positive outcome of Florida Supreme Court ruling on 2012 rate settlement • Energy Resources: – Continued strong contributions from growt
Slide 4: FPL delivered solid earnings growth during the quarter
FPL delivered solid earnings growth during the quarter Florida Power & Light Results – Third Quarter Net Income EPS ($ MM) $462 $422 $1.05 $0.99 2013 2014 2013 2014 4
Slide 5: FPL's EPS grew 6 cents versus third quarter 2013
FPL’s EPS grew 6 cents versus third quarter 2013 Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) Third Quarter $B FPL – 2013 EPS $0.99 $29.4 30 $27.9 Drivers: 25 New Investments, incl clauses 0.04 20 Wholesale operations 0.04 15 Share dilution and other (0.02
Slide 6: Florida's economic recovery remains solid
Florida’s economic recovery remains solid Florida Economy Florida Unemployment & Labor Participation Rates(1) Florida Building Permits(2) 12% 65% 12,000 Labor 64% 10% Participation Rate 10,000 (Right Axis) 63% Sep-14 8% 8,000 62% 6% 61% 6,000 60% 4% 4,000 59% 2% 2,000 58% 0% 57% 0 Jan-07 Jan-08 Jan-
Slide 7: FPL's retail sales usage per customer rebounded in the third quarter
FPL’s retail sales usage per customer rebounded in the third quarter Customer Characteristics (through September 2014) Retail kWh Sales Customer Growth(1,3) (Change vs. prior-year quarter) (Change vs. prior-year quarter) 100 82 80 Customer Growth & Mix 1.2% UKU Impact # of 60 Customers + Usage Growt
Slide 8: Energy Resources' adjusted EPS increased 7 cents versus third quarter 2013
Energy Resources’ adjusted EPS increased 7 cents versus third quarter 2013 Energy Resources Results(1) – Third Quarter GAAP Adjusted Net Income(2) EPS(2) Net Income EPS ($ MM) ($ MM) $0.66 $281 $231 $0.52 $204 $0.46 $0.45 $190 2013 2014 2013 2014 2013 2014 2013 2014 (1) See Appendix for reconciliati
Slide 9: Energy Resources' adjusted EPS growth driven primarily by new contracted renewables
Energy Resources’ adjusted EPS growth was driven primarily by new contracted renewables Energy Resources Third Quarter Adjusted EPS(1) Contribution Drivers $0.70 $0.60 $0.03 $0.01 ($0.03) $0.09 ($0.03) $0.52 $0.50 $0.45 $0.40 $0.30 $0.20 $0.10 $0.00 Q3 2013 New Customer Supply Existing Gas Corporate
Slide 10: Energy Resources' team had an excellent period of new renewable origination activity
Energy Resources’ team had an excellent period of new renewable origination activity Energy Resources Highlights • Signed contracts for ~445 MW of new wind and solar projects since the last call – ~304 MW U.S. solar – ~91 MW U.S. wind – ~50 MW Canadian wind 2013-2015 COD 2013-2015 Wind and Contracte
Slide 11: NextEra Energy Partners' initial portfolio operated well
NextEra Energy Partners’ initial portfolio operated well NextEra Energy Partners – Highlights • Third quarter 2014 CAFD = $27 MM • Solid operational performance • Declared initial quarterly distribution of $0.1875 per common unit – Annualized rate of $0.75 per unit • Announcements: – Two planned pro
Slide 12: NextEra Energy's adjusted earnings per share increased 12 cents
NextEra Energy’s adjusted earnings per share increased 12 cents versus the prior year comparable quarter NextEra Energy EPS Summary(1) – Third Quarter (2) GAAP 2013 2014 Change FPL $0.99 $1.05 $0.06 Energy Resources $0.66 $0.46 ($0.20) Corporate and Other ($0.01) ($0.01) $0.00 Total $1.64 $1.50 ($0.
Slide 13: 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 28 for definition of Adjusted Earnings. 13
Slide 14: 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 ~$1.125 annualized rate by year end 2016 - 2020 12% - 15% average annual growth (1) See slide 33 for definition of Adjusted EBITDA and CAFD. 14 (2) Inc
Slide 15: Q&A Session
Q&A Session NExTera’ NexTera energy” ENERGY & PARTNERS Z 15
Slide 16: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z 16
Slide 17: NEX Tera
NEX Tera ENERGY &
Slide 18: 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 19: Potential drivers of variability to consolidated adjusted EPS
Potential drivers of variability to consolidated adjusted EPS 2015 Potential Sources of Variability(1) Florida Power & Light • Wholesale (primarily volume) ± $0.01 • Timing of investment ± $0.01 NextEra Energy Resources • Natural gas prices (± $1/MMBtu change) ± $0.05 - $0.06 • Wind resource (± 1% d
Slide 20: NextEra Energy Resources Projected 2015 Portfolio Financial Information
NextEra Energy Resources Projected 2015 Portfolio Financial Information (As of September 11, 2014) ($ 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) - ($15
Slide 21: Wind Production Index
Wind Production Index(1)(2) 2013 2014 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR Location 3 MW Jul Aug Sep QTR MW QTR YTD MW QTR MW QTR MW Jul Aug Sep QTR YTD Midwest 2,816 94% 76% 95% 89% 3,066 97% 97% 3,141 115% 3,066 106% 3,066 112% 68% 93% 91% 106% West 2,953 92% 81% 99% 90% 2,730 91% 93% 2,730 100
Slide 22: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ MM, after-tax) Asset/(Liability) Balance as of 6/30/14 $83.2 Amounts Realized During 3rd Quarter 18.4 Primary Drivers: Revenue Hedges – Gas Change in Forward Prices (all positions) (29.5) & Power Prices ($30.1) Subtotal – Income Statement (11.1) All
Slide 23: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ MM, 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 Balan
Slide 24: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges(1) – Summary of Forward Maturity ($ MM, after-tax) Gain / (Loss) (2) Asset / (Liability) Balance Total Description 9/30/14 4Q 2014 2015 2016 2017 2018 - 2034 2014 - 2034 Natural gas related positions $ 110.6 $ 11.1 $ 27.8 $ 4.9 $ (4.1) $ (150.3) $ (110.6) Spark spread related p
Slide 25: 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 26: Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc.
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended September 30, 2014) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) Attributable to NextEra Energy,
Slide 27: Reconciliation of Adjusted Earnings to GAAP Net Income
Reconciliation of Adjusted Earnings to GAAP Net Income (Three Months Ended September 30, 2013) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Income (Loss) $ 422 $ 281 $ (5) $ 698 Adjustments, net of income taxes: Net unreali
Slide 28: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings (Slide 13) 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 29: 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 30: Cautionary Statement And Risk Factors That May Affect Future Results (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 31: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 32: 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 33: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA (Slide 14) 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 34: 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 35: Cautionary Statement And Risk Factors That May Affect Future Results (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 36: Cautionary Statement And Risk Factors That May Affect Future Results (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