Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q2 2017 Earnings Presentation
41 slides from Nextera Energy's earnings presentation, Jul 26, 2017
Slide 1: Earnings Conference Call Second Quarter 2017
Earnings Conference Call Second Quarter 2017 July 26, 2017
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 within the meaning of the federal securities laws. Actual results could differ materially from such forward- looking statements. The factors that could cause actual results to
Slide 3: NextEra Energy delivered strong financial results in the second quarter
NextEra Energy delivered strong financial results in the second quarter NextEra Energy Second Quarter 2017 Highlights • NEE grew adjusted EPS more than 11% year-over-year • FPL: – Regulatory capital growth of 10.1% versus prior-year comparable quarter – Construction is underway at eight 74.5 MW sola
Slide 4: NextEra Energy Partners delivered solid financial results and continued growth
NextEra Energy Partners delivered solid financial results and continued growth in the second quarter NextEra Energy Partners Second Quarter 2017 Highlights • Adjusted EBITDA and CAFD growth of almost 30% against prior-year comparable quarter • Grew distributions per unit by ~15% from prior-year comp
Slide 5: FPL's EPS grew 16 cents from the prior-year comparable quarter
FPL’s EPS grew 16 cents from the prior-year comparable quarter Florida Power & Light Results – Second Quarter Net Income EPS ($ MM) $526 $1.12 $448 $0.96 2016 2017 2016 2017 5
Slide 6: The primary driver of FPL's earnings growth was continued investment in the business
The primary driver of FPL’s earnings growth was continued investment in the business Florida Power & Light EPS Contribution Drivers EPS Growth Regulatory Capital Employed(1) Second Quarter $B 40.0 FPL – 2016 EPS $0.96 $37.2 35.0 $33.8 Drivers: 30.0 New investments, incl. clause $0.09 25.0 Gas reserv
Slide 7: Florida's economy remains strong driving continued customer growth
Florida’s economy remains strong driving continued customer growth Customer Characteristics & Florida Economy Retail kWh Sales Customer Growth(1,2) (Change vs. prior-year quarter) (Change vs. prior-year quarter) 100 Customer Growth & Mix 0.7% 80 ~64 UKU Impact + Usage Change Due to Weather 2.9% 60 #
Slide 8: Energy Resources' adjusted EPS increased 10% from the prior-year comparable quarter
Energy Resources’ adjusted EPS increased 10% from the prior-year comparable quarter Energy Resources Results(1) – Second Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $351 $313 $0.74 $301 $0.67 $0.64 $234 $0.50 2016 2017 2016 2017 2016 2017 2016 2017 1) Attributable to NEE, see A
Slide 9: Energy Resources' adjusted EPS growth driven by contributions from new investments
Energy Resources’ adjusted EPS growth driven by contributions from new investments Energy Resources Second Quarter Adjusted EPS(1) Contribution Drivers $1.00 $0.90 $0.17 ($0.08) $0.05 ($0.04) $0.80 ($0.03) $0.74 $0.70 $0.67 $0.60 $0.50 $0.13 Renewables $0.04 Gas pipelines $0.40 $0.30 $0.20 $0.10 $0.
Slide 10: We continue to have an outstanding opportunity set for new renewables growth
We continue to have an outstanding opportunity set for new renewables growth Energy Resources Development Program(1) • Announcing 631 MW of new renewables projects added to backlog – Includes 193 MW of wind and 80 MW of solar for 2017 - 2018 and 358 MW of solar for 2019 - 2020 • Added 200 MW to our
Slide 11: NEP delivered strong second quarter results, driven by portfolio growth
NEP delivered strong second quarter results, driven by portfolio growth over the last year NextEra Energy Partners – Second Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $225 $100 $6 ($7) ($2) $6 ($7) $200 $43 $196 $90 $20 $84 $175 $80 $156 $70 $65 $150 $60 $125 $50 $100 $40 $75 $30 $50 $20
Slide 12: NextEra Energy's adjusted earnings per share increased ~11%
NextEra Energy’s adjusted earnings per share increased ~11% versus the prior-year comparable quarter NextEra Energy EPS Summary(1) – Second Quarter GAAP 2016 2017 Change FPL $0.96 $1.12 $0.16 Energy Resources $0.50 $0.64 $0.14 Corporate and Other ($0.30) ($0.08) $0.22 Total $1.16 $1.68 $0.52 Adjuste
Slide 13: NextEra Energy Adjusted Earnings Per Share Expectations
NextEra Energy Adjusted Earnings Per Share Expectations(1) 2017 $6.35 - $6.85 2018 $6.80 - $7.30 2020 $7.85 - $8.45 Long-Term 6% - 8% CAGR through Growth Rate 2020 off a 2016 base 1) See Appendix for definition of Adjusted Earnings expectations 13
Slide 14: NextEra Energy Partners Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners Adjusted EBITDA and CAFD Expectations(1) Adjusted EBITDA CAFD 12/31/17 Run Rate(2) $875 - $975 MM $310 - $340 MM Unit Distributions $1.58 - $1.62 annualized rate by 2017(3) year end 2016 – 2022(4) 12% - 15% average annual growth 1) See Appendix for definition of Adjusted EBIT
Slide 15: Q&A Session
Q&A Session NExTera’ NexTera energy” ENERGY & PARTNERS 2 15
Slide 16: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS 2 16
Slide 17: NExTera’
NExTera’ ENERGY @
Slide 18: NextEra Energy's credit metrics remain on track
NextEra Energy’s credit metrics remain on track Credit Metrics Actual Actual Actual Target S&P A- Range 2014 2015 2016 2017/2018 FFO/Debt 23%-35% 25% 26% 27% 26% Debt/EBITDA 2.5x-3.5x 3.5x 3.3x 3.1x 3.1x Actual Actual Actual Target Moody’s Baa Range 2014 2015 2016 2017/2018 CFO Pre-WC/Debt 13%-22% 2
Slide 19: Potential drivers of variability to consolidated adjusted EPS
Potential drivers of variability to consolidated adjusted EPS Balance of 2017 Potential Sources of Variability(1) Florida Power & Light • Wholesale (primarily volume) ± $0.01 - $0.02 • Timing of investment ± $0.01 - $0.02 NextEra Energy Resources • Natural gas prices (± $1/MMBtu change) ± $0.01 • Wi
Slide 20: NextEra Energy Resources Projected 2017 Portfolio Financial Information
NextEra Energy Resources Projected 2017 Portfolio Financial Information (1) Adjusted EBITDA by Value of pre-tax tax Remaining Asset credits included in Maintenance Pre-Tax Cash Contract Category(2) adjusted EBITDA(3) Debt Service (4) Capital(5) Other(6) Flows(7) Life (8) NEER Contracted(9) Renewable
Slide 21: Wind Production Index
Wind Production Index(1)(2) 2016 2017 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR Location MW Apr May Jun QTR MW QTR MW QTR YTD MW QTR MW Apr May Jun QTR YTD Midwest 3,054 113% 87% 105% 102% 3,054 96% 3,039 106% 100% 3,039 101% 3,039 96% 102% 117% 104% 103% West 2,718 96% 97% 86% 93% 2,718 105% 3,117 10
Slide 22: Contracted Renewables Development Program
Contracted Renewables Development Program(1) Wind Location MW Solar Location MW 2017 – 2018: 2017 – 2018: Oliver III ND 99 Whitney Point CA 20 Huron MI 150 Marshall MN 62 Golden Hills North CA 46 Stuttgart AR 81 Bluff Point IN 120 Westside CA 20 Eight Point NY 102 Blue Bell TX 30 Dodge County MN 200
Slide 23: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions) 1) Includes NextEra Energy’s share of contracts at consolidated projects and equity method investees 2) Removal of the hedge mark to market and settlements related to asset sales 23
Slide 24: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges – Summary of Forward Maturity ($ millions) 2nd Quarter Asset / Asset / (Liability) Change in Total (Liability) Balance Amounts Forward NQH Gain / Balance (3) Description 3/31/17 Realized Prices (Loss) Other 6/30/17 Pretax Amounts Gross Natural gas related positions $ 959.9 $ (6
Slide 25: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges – Summary of Forward Maturity ($ millions) (1) Gain / (Loss) Asset / (Liability) Balance Total Description 6/30/17 2017 2018 2019 2020 2021 - 2047 2017 - 2047 Pretax gross amounts Natural gas related positions $ 901.9 $ (98.9) $ (131.7) $ (116.6) $ (103.4) $ (451.3) $ (901.9) G
Slide 26: Reconciliation of Adjusted Earnings to GAAP Net Income (Q2 2017)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended June 30, 2017) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc.
Slide 27: Reconciliation of Adjusted Earnings to GAAP Net Income (Q2 2016)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended June 30, 2016) Florida Pow er Energy Corporate & NextEra Energy, (m illions, except per share am ounts) & Light Resources Other Inc. Net Incom e (Loss) Attributable to NextEra Energy, Inc.
Slide 28: Reconciliation of GAAP Operating Cash Flow to Adjusted Operating Cash Flow
Reconciliation of NextEra Energy, Inc. GAAP Operating Cash Flow to Adjusted Operating Cash Flow Six Months Ended Six Months Ended (millions) June 30, 2016 June 30, 2017 Inc/(Dec) Grow th Cash flow s from operations $ 3,270 $ 3,165 $ (105) (3.2%) FPL clause recoveries (137) (10) Acquisition of Indian
Slide 29: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings Expectations This presentation refers to adjusted earnings per share expectations. Adjusted earnings expectations exclude the effect of non- qualifying hedges, net OTTI losses on securities held in NextEra Energy Resources’ nuclear deco
Slide 30: 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 31: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) effect of reductions in the liquidity of energy markets on NextEra Energy's ability to manage operational risks; effectiveness of NextEra Energy's and FPL's risk management tools associated with their hedging and trading pr
Slide 32: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 33: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q2 2017 Net income $ 50 Add back: Depreciation and amortization 50 Interest expense(1) 61 Income taxes 9 Tax credits 50 Benefits associated with differential membership interests (22) Adjustment for
Slide 34: NEP's holdco leverage to project distributions metric target
NEP’s holdco leverage to project distributions metric target of 4.0x – 5.0x, at a P90 resource, is consistent with its strong mid– to high–BB credit ratings Credit Metrics(1) BB Target Target (2) S&P Range YE 2017 YE 2018 Holdco Debt/EBITDA 4.0x - 5.0x 3.0x - 4.0x 4.0x - 5.0x Ba1 Target Target (3) M
Slide 35: NEP Governance Changes Timeline
NEP Governance Changes Timeline Preliminary Dates Action July 2017 Information Statements mailed describing Proxy Access Rights and Governance Changes On or after Aug. 1, 2017 NEP Governance Changes Effective (No meeting necessary) Aug. 23 – Sep. 22, 2017 Proxy Access nominees delivery window Sep. –
Slide 36: Expected Cash Available for Distribution
Expected Cash Available for Distribution(1) (December 31, 2017 Run Rate CAFD) $960-$1,060 ($15-$25) ($60-$70) $875-$975 ($290-$320) ($240-$280) $ MM ($30-$35) ($3-$8) $310-$340 Project-Level Corporate IDR Fees Adjusted Debt (2) Pre-Tax Tax Non-Cash Maintenance Estimated (4) (5) Adjusted Expenses EBI
Slide 37: Definitional information
Definitional information NextEra Energy Partners, LP. Adjusted EBITDA and CAFD Expectations This presentation refers to adjusted EBITDA and CAFD expectations. NEP’s adjusted EBITDA expectations represent projected (a) revenue less (b) fuel expense, less (c) project operating expenses, less (d) corpo
Slide 38: 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 federal securities laws. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra
Slide 39: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP's renewable energy projects may be adversely affected by legislative changes or a failure to comply with applicable energy regulations; A change in the jurisdictional characterization of some of the Texas pipeline entit
Slide 40: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP faces substantial competition primarily from regulated utilities, developers, independent power producers, pension funds and private equity funds for opportunities in North America; The natural gas pipeline industry is
Slide 41: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) The IDR fee may be assigned to a third party without unitholder consent; NEP may issue additional units without unitholder approval, which would dilute unitholder interests; Reimbursements and fees owed to NEP GP and its af