Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (February 2014)
52 slides from Nextera Energy's investor presentation, February 2014
Slide 1: February 2014 Investor Presentation
February 2014 Investor Presentation
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: Table of Contents
Table of Contents • NextEra Energy, Inc. Overview Slide 4 • Florida Power & Light Slide 12 • NextEra Energy Resources Slide 23 • NextEra Energy Transmission Slide 29 • NextEra Energy, Inc. Financial Review Slide 31 • Appendix Slide 39 3
Slide 4: NextEra Energy is well-positioned for future growth
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 regulatory certainty at FPL – Strong backlog at Energy Resources with upside potential • Strong and increasing cas
Slide 5: NextEra Energy is comprised of two strong businesses supported by a common platform
NextEra Energy is comprised of two strong businesses supported by a common platform • $39.6 B market capitalization(1) • 42,576 MW in operation • $69 B in total assets • One of the largest U.S. electric utilities • U.S. leader in renewable generation • 4.7 MM customer accounts • Assets primarily in
Slide 6: Built on a foundation of operational excellence and financial strength
NextEra Energy is built on a foundation of operational excellence and financial strength SAIDI: System Average (1) Interruption Duration Index Utility Credit Ratings(3) Minutes 40% 38% 150 FL Industry Average Good 125 35% NextEra Energy 100 FPL 30% 75 50 25% 22% 25 20% '06 '07 '08 '09 '10 '11 '12 20
Slide 7: One of the cleanest emissions profiles among top 50 power producers
NextEra Energy has one of the cleanest emissions profiles among the nation’s top 50 power producers NextEra Energy 2012 Fuel Mix(1) SO2 Emissions Rates(2) (MWh) (Lbs/MWh) 9.0 Nuclear Solar <1% 7.5 22% Wind 15% Coal 3% 6.0 Hydro 1% 4.5 Oil <1% NextEra 3.0 Energy Natural Gas 59% 1.5 0.0 3.0 NOx Emissi
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 T
Slide 9: Successful in attaining our goal of outperforming our industry
Over an extended period of time, we have been successful in attaining our goal of outperforming our industry NextEra Energy Performance vs. Industry 10-Year CAGR Ending December 31, 2013 S&P 500 Utilities NextEra S&P 500 Index Energy Adjusted EPS (2002-2012)(1) 9.0% 0.2% 6.6%(2) Dividend per Share(3
Slide 10: 2013-2016 Capital Expenditures
At our investor conference in March, we identified potential capital spending of up to $23 B in 2013 to 2016; we have now firmed up ~$19 B of investment opportunities 2013 – 2016 Capital Expenditures(1) $ MM • FPL 25,000 – Includes cap ex for modernizations, incremental storm hardening, reliability/
Slide 11: Moving forward on ~$7 B of incremental investments
We are moving forward on ~$7 B of incremental investments Incremental Capital Opportunities 2013 to 2016 Opportunity Status Projected Cap Ex FPL • Storm hardening Received PSC approval ~$400 MM • Reliability investment Infrastructure improvements on track ~$700 MM • Potential peaker upgrades Acquiri
Slide 12: Florida Power & Light
12
Slide 13: 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 • 24,273 MW in operation • $10.4 B in operating revenues • $36 B in total assets 13
Slide 14: Excellent progress on backlog of major capital projects in 2013
We have made excellent progress on our backlog of major capital projects in 2013 FPL’s Backlog of Major Capital Projects Modernization Projects Nuclear Uprates • Cape Canaveral completed • Successfully completed our ahead of schedule and under extended nuclear power budget uprate program in April 20
Slide 15: Florida's economy continues to improve
Florida’s economy continues to improve Florida Economy Florida Unemployment Rate(1) Florida Building Permits(2) 12% 12,000 10% 10,000 8% 8,000 6% 6,000 4% 4,000 2% 2,000 0% 0 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Florida Mortgages 90+ Days
Slide 16: FPL's O&M costs declined through 2005, but have increased recently
FPL’s O&M costs declined through 2005, but in recent years they have increased FPL – Base O&M Costs in Real 2012 Dollars(1) 3.50 3.29 3.00 2.50 ¢ per 2.00 kWh 1.45 1.47 1.50 1.36 1.00 0.50 0.00 1988 2000 2005 2012 FPL’s goal is to get back to a trend of positive O&M productivity in real terms (1) Ce
Slide 17: Project Momentum: goal of flat nominal base O&M in 2016
Project Momentum has provided a line of sight to achieve our goal of keeping nominal base O&M expenses flat in 2016 FPL Productivity Improvements • Moving forward with several initiatives with significant O&M cost savings in the following areas: – Nuclear operations – Transmission and distribution –
Slide 18: $4 B to $5 B in incremental capital expenditures
In March we laid out $4 B to $5 B in incremental capital expenditures that we continue to develop Incremental Capital Expenditures Through 2016 • Incremental storm hardening • Infrastructure / reliability investment • Generation upgrades $4 B - $5 B • Natural gas pipelines(1) • Vero Beach acquisitio
Slide 19: Incremental Storm Hardening Investment
FPL filed a plan with the PSC to invest in storm hardening and reliability opportunities Incremental Storm Hardening Investment • FPL filed plans with the PSC to continue investing in strengthening the grid against storms and help keep everyday reliability high – Expect to invest an additional ~$400
Slide 20: Florida PSC 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 21: Replacement of FPL's gas turbine peakers may be required
Achieving improved environmental standards may require replacement of FPL’s fleet of existing gas turbine peakers Generation Upgrades • Upgrading FPL’s peaking capacity with more efficient, advanced combustion turbines (CTs) • Will perform local air quality monitoring to determine scope and timing o
Slide 22: Incremental capital investments recovered via base rates or separate mechanisms
FPL’s incremental capital investments will be recovered either via existing base rates or separate recovery mechanisms Recovery Mechanisms for FPL Capital Expenditures Capital Expenditures Recovery Mechanism • Base infrastructure (T&D, etc.) • Maintenance Absorbed in base rates • Incremental storm h
Slide 23: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 24: Energy Resources' risk profile continues to improve
Energy Resources’ risk profile continues to improve as the business mix shifts to more long-term contracted assets Energy Resources’ Adjusted EBITDA(1) 100% 11% 15% 14% 75% 26% 22% 40% 50% 59% 64% 25% 49% 0% 2009 2012 2014 Long‐Term Contracted Merchant Peripheral Businesses In 2014, we expect 65% of
Slide 25: Over 11,000 MW of contracted assets, primarily wind and nuclear
Our generation portfolio consists of over 11,000 MW of contracted assets, which are primarily wind and nuclear Energy Resources: Contracted Assets(1) Technology MW Wind 8,366 Nuclear 1,621 Solar 472 Natural Gas 1,003 Total: 11,462 25 (1) As of December 31, 2013; excludes Spain solar project
Slide 26: March 2013 Investor Conference backlog of signed PPAs
Our March 2013 Investor Conference backlog of signed long- term PPAs for wind and solar projects translates into roughly $3.6 B of capital investment through 2016 March 2013 Investor Estimated Cap Ex(2) for Wind and Conference Backlog(1) Solar Projects in the IC Backlog • 175 MW U.S. wind COD 2013 (
Slide 27: Strong renewable energy prospects beyond the backlog
Energy Resources has strong renewable energy prospects beyond the 2013 Investor Conference backlog Renewable Energy Development Opportunities(1) Wind Solar • 2013 – 2015 U.S. wind • Incremental U.S. solar development program development backlog could be between 2,000 – – Executed agreement to 2,500
Slide 28: Business mix continues to shift toward long-term contracted assets through 2016
The resulting business mix continues to shift toward long-term contracted assets through 2016 Energy Resources’ Adjusted EBITDA(1) 100% 11% 14% 15% 75% 22% 19% 40% 50% 64% 66% 25% 49% 0% 2009 2014 2016 Long‐Term Contracted Merchant Peripheral Businesses 28 (1) See appendix slide 49 for definition of
Slide 29: NextEra Energy Transmission
NEXT@ra’ ENERGY & TRANSMISSION
Slide 30: Market for new transmission projects with increasing opportunities to compete
The overall market for new transmission projects is aligned regionally, with increasing opportunities to compete Competitive Transmission Opportunity Set • Current operations include: – Lone Star Transmission: ~330-mile portion of the Texas CREZ build-out – New Hampshire Transmission: Independent ow
Slide 31: Financial Review
NEXT@ra ANANCIAL REVIEW
Slide 32: Balance sheet strength and credit play an important role in our strategy
Balance sheet strength and credit play an important role in our strategy NextEra Energy 2014 Credit Metric Targets(1) Moody’s Baa Range NEE Target • CFO Pre-WC/Debt 13% - 22% 20% • Debt Capitalization 45% - 55% 50% Fitch A Range NEE Target • FFO/Debt 20% - 26% 21% • FFO/Interest 4.5x - 5.6x 5.2x S&P
Slide 33: Cash flow available to support credit in 2014 is expected to be strong
Cash flow available to support credit in 2014 is expected to be strong 2014 Expected Cash Flow Analysis ($ billions) NEE Capital Holdings FPL Consolidated (1) Adjusted EBITDA $2.3 - $2.6 $4.1 - $4.3 Plus: Monetization of Tax Benefits 0.2 - 0.3 N/A Less: Limited Recourse Debt Service (0.9) - (1.0) (0
Slide 34: Financing Strategy: 2013-2016
We have an agreement to issue ~$1 B of common equity to support our growth objectives from 2013 through 2016 Financing Strategy: 2013 - 2016 • At FPL: – Maintain consistent balance sheet ~60% regulatory equity ratio – Focus on long-dated maturities, but may selectively shorten up to meet market dema
Slide 35: Market risk mitigated by significantly hedged position
Market risk will be mitigated by our significantly hedged position over the next several years Energy Resources Equivalent Gross Margin Contracted or Hedged(1) 100% 99% 100% 100% 100% 96% 94% 91% 82% 80% 60% 40% 20% 0% 2014 2015 2016 2017 Existing New 35 (1) See appendix slide 49 for definition of E
Slide 36: Business mix shifting toward 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 37: Current dividend policy reflects increased proportion of regulated and contracted businesses
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 $2.80 - $3.00 ? 2011 to 2014 CAGR: ~10% of 55% targe
Slide 38: NEX Tera
NEX Tera ENERGY &
Slide 39: Appendix
39 Appendix NeExTera’ ENEBIGY 2
Slide 40: Reconciliation of Base O&M Cents per kWh to GAAP O&M Cents per kWh
Reconciliation of Base O&M Cents per kWh to GAAP O&M Cents per kWh 1988 2000 2005 2012 ($ in millions) Base O&M (A) $1,131 $984 $1,199 $1,500 Clause 32 77 99 269 Other 0 1 9 4 GAAP O&M (B) $1,163 $1,062 $1,307 $1,773 Retail delivered kWhs (in millions) (C) 59,163 88,128 101,980 102,128 Base O&M cent
Slide 41: 2014 Expected Cash Flow Analysis Debt Detail
2014 Expected Cash Flow Analysis Debt Detail (1) YE 2012 Expected 2014 Notes ($ MM) ($ B) FPL Senior Debt and Bank Loans $8,290 $8.4 - $8.6 Debt excluded from Expected Cash Flow Analysis slide Storm-recovery bonds and other $492 Secured by FPL customer bill surcharge FPL long-term debt, including cu
Slide 42: Projected 2014 Portfolio Financial Information
NextEra Energy Resources Projected 2014 Portfolio Financial Information (as of December 6, 2013) Equivalent Equivalent Equivalent 1 1 2 3 Expected Gross Margin % Gross EBITDA Remaining Following Generation Range Margin Range Contract Year PTC MW TWh $ MM Hedged $ MM Life Expiration Contracted 4 Wind
Slide 43: Reconciliation of Energy Resources Equivalent EBITDA to NEECH Adjusted EBITDA
Reconciliation of Energy Resources Equivalent EBITDA to NEECH Adjusted EBITDA ($ millions) 2014 NEER Equivalent EBITDA(1) $ 3,250 Midpoint from Projected 2014 Portfolio Information slide 42 in Appendix Less: Tax credits (430) Includes grossed up tax credits and amortization of CITC Tax equity costs
Slide 44: NextEra Energy Resources Portfolio Additions
NextEra Energy Resources Portfolio Additions(1) (2) March 2013 Investor Conference Backlog Incremental Opportunities Incl. in 9/30/13 Incl. in 9/30/13 U.S. Wind: MW COD Form 10-Q(3) U.S. Wind: MW COD Form 10-Q(3) Tuscola Bay II(4) 100.3 2013 Yes Tuscola Bay II(4) 100.3 2013 Yes Steele Flats(4) 74.8
Slide 45: Potential drivers of variability to consolidated adjusted EPS
Potential drivers of variability to consolidated adjusted EPS 2014 Potential Sources of Variability(1) Florida Power & Light • Wholesale (primarily volume) ± $0.02 • Timing of investment ± $0.02 NextEra Energy Resources • Natural gas prices (± $1/MMBtu change) ± $0.03 - $0.04 • Wind resource (± 1% d
Slide 46: 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 $4.47 Adjustments: Net unrealized mark-to-market losses (
Slide 47: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ millions) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Net Income $903 $896 $901 $1,281 $1,312 $1,639 $1,615 $1,957 $1,923 $1,911 $1,908 Adjustments, net of income taxes: Net unrealized mark-to-market losses (gains)
Slide 48: 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 49: Definitional information
Definitional information NextEra Energy Resources, LLC. Adjusted EBITDA (Slides 24, 28, 36) Adjusted EBITDA includes Energy Resources’ consolidated investments as well as its share of equity method investments. Adjusted EBITDA for each category set forth above is represented by (a) revenue, includin
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 That May Affect Future Results (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) failure or breach of NextEra Energy's information technology systems; risks to NextEra Energy's retail businesses of compromise of sensitive customer data; risks to NextEra Energy of volatility in the market values of deriv
Slide 52: NEX Tera
NEX Tera ENERGY &
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