Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Investor Presentation (June 2013)
58 slides from Nextera Energy's investor presentation, June 2013
Slide 1: May/June 2013 Investor Presentation
May/June 2013 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: 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… • $34.5 B market capitalization(1) • 41,068 MW in operation • $64 B in total assets • One of the largest U.S. electric utilities • U.S. leader in renewable generation • 4.6 MM customer accounts • Assets in 24 states
Slide 4: Built on a foundation of operational excellence and financial strength
…built on a foundation of operational excellence and financial strength… SAIDI: System Average (1) Interruption Duration Index Utility Credit Ratings(3) 30% Minutes 29% 150 FL Industry Average Good 125 25% NextEra Energy 23% 100 FPL 75 20% 20% 50 25 15% 14% '06 '07 '08 '09 '10 '11 '12 Fossil Reliabi
Slide 5: One of the cleanest emissions profiles among top 50 power producers
…with 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% Nuclear Wind 21%15% Wind Coal 3% 6.0 14% Hydro 1% 4.5 Oil <1% NextEra 3.0 Energy Natural Gas 59% 1.5 0.0 3.5 NO
Slide 6: 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) $25.2 $4.57 $21.8 $4.30 $4.39 $19.6 $3.84 $4.05 $17.7 $3.49 $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 '
Slide 7: Strong backlog and incremental investment opportunities to drive growth through 2016
…and a strong backlog of projects as well as incremental investment opportunities that will continue to drive growth through 2016 March 2013 Backlog(1) Incremental Opportunities • FPL • FPL – Base rate increase and GBRA – Storm hardening & reliability investment in settlement agreement Cape Canavera
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Slide 9: 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 • 4.6 MM customer accounts • 23,297 MW in operation • $10.1 B in operating revenues • $35.5 B in total assets 9
Slide 10: Florida PSC approved FPL's settlement agreement in December 2012
In December 2012, the Florida Public Service Commission voted unanimously to approve FPL’s settlement agreement Overview of Settlement Agreement • Effective for a four-year term beginning January 1, 2013 through December 31, 2016 • Base rate adjustment increase of $350 MM effective January 2013 and
Slide 11: Settlement provides a four-year window for productivity improvements
The settlement approved in December provides a four-year window for productivity improvements FPL Efficiency Opportunities • Identified several initiatives with significant O&M cost savings in the following areas: – Nuclear operations – Transmission and distribution – Staff functions • Focused on id
Slide 12: FPL opportunity to deploy ~$4 to $5 B in incremental investments through 2016
FPL has the opportunity to deploy ~$4 to $5 B in incremental investments through 2016 that will benefit customers Projected Capital Expenditures(1) $B $4.0 $2.6 - $3.7 $2.1 - $3.6 $1.9 - $3.5 $3.5 $3.0 $2.6 - $2.8 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 2013E 2014E 2015E 2016E Baseline Capital Expenditures Po
Slide 13: 2012 storm season reinforced need for hurricane resistance initiative
The 2012 storm season highlighted and reinforced FPL’s need for maintaining hurricane resistance initiative Incremental Storm Hardening Investment • Between 2006 and 2012, FPL invested almost $500 MM in capital for storm hardening – The investment reflects FPL’s commitment to harden its electric inf
Slide 14: FPL is identifying incremental storm hardening opportunities
FPL is identifying incremental storm hardening opportunities Incremental Storm Hardening Investment (continued) • FPL plans to continue investing in strengthening the grid against storms and help keep everyday reliability high – Expect to invest $428 MM to $646 MM through 2015 • Key customer benefit
Slide 15: Infrastructure and reliability investments will have significant customer benefits
Capital investments in infrastructure and reliability will have significant customer benefits Infrastructure and Reliability Investments • FPL will continue to invest Potential Impact in the grid to improve of Deploying AFS (Service Unavailability) customer reliability Minutes 90 • One example: Auto
Slide 16: Environmental standards could require replacement of gas turbine peakers
Achieving improved environmental standards could require replacement of FPL’s fleet of existing gas turbine peakers Generation Upgrades • Original peakers were placed in- service in the early 1970s with heat rates of 17,000 to over 19,000 Btu/kWh • Achieving improved environmental standards could re
Slide 17: Opportunity to invest in a new natural gas pipeline
FPL has an opportunity to invest in a new natural gas pipeline to meet future gas requirements while increasing the reliability and diversity of FPL’s gas transportation portfolio Natural Gas Pipeline Investment • FPL’s current request for proposal includes a two- Butler, AL segment approach for New
Slide 18: Opportunities to serve others within the state
FPL’s low rates, high reliability and excellent customer service have created opportunities to potentially serve others within the state Florida’s Electric Utility Market • Florida’s electric utility market is comprised of three main segments dominated by five investor-owned utilities, representing
Slide 19: Potential acquisition of the Vero Beach municipal electric utility
FPL has the opportunity to expand its service territory through a potential acquisition of the Vero Beach municipal electric utility Vero Beach Electric Utility • Serves approximately 34,000 customers, primarily residential • Approximately 61% of customers are outside the city limits, primarily in I
Slide 20: FPL's electric rates lower than Vero Beach utility's rates
FPL’s electric rates have historically been lower than Vero Beach electric utility’s rates and the disparity is growing Vero Beach Utility vs. FPL Typical Bill(1) • With the potential $160 acquisition, Vero Beach (2) utility customers could $140 $137.89 benefit from FPL’s retail rate structure, with
Slide 21: FPL contracting with several cooperatives, including Lee County Electric Coop
FPL has been successful at contracting with several cooperatives, including Lee County Electric Coop Existing Wholesale Power Sales MWs Full Requirements MWs Partial Requirements 1,200 350 1,000 300 800 250 600 200 150 400 100 200 50 - - 2009 2012 2014 2009 2012 2014 $ MM Estimated Net Income Key Cu
Slide 22: FPL exploring incremental solar projects for fuel diversity
FPL is exploring opportunities to invest in incremental solar projects to provide additional fuel diversity in Florida Solar Investment DeSoto Solar Expansion • 25-50 MW solar PV project Manatee Solar • Potential for additional 275 MW • Potential for 40 MW Solar Costs for 100 MW(1) Babcock Ranch $/1
Slide 23: NextEra Energy Resources
NEXTeCra’ ENERGY &% RESOURCES
Slide 24: What is Energy Resources?
What is Energy Resources? A Set of Skills + A Set of Assets • Largest greenfield developer in • Largest wind and solar renewable North America over the last decade portfolio in North America – Over 12,000 MW of greenfield • Over 11,000 MW of stable long- development term contracted projects • #1 in
Slide 25: EBITDA mix continues to shift to long-term contracted assets
Our EBITDA mix continues to shift to 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 64% of Energy Resources’ adjusted EBITDA to come from lo
Slide 26: Consciously shifting the focus of our portfolio
We have been consciously shifting the focus of our portfolio Energy Resources’ Adjusted EBITDA(1) 100% 11% 15% 14% 75% 22% 40% 26% 50% 59% 64% 25% 49% 0% 2009 2012 2014 Long‐Term Contracted Merchant Peripheral Businesses 26 (1) See appendix for definition of adjusted EBITDA
Slide 27: Generation portfolio of over 11,000 MW of contracted assets
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 8,213 Nuclear 1,621 Solar 193 Natural Gas 1,004 Total: 11,031 27 (1) As of December 31, 2012
Slide 28: Backlog of signed long-term PPAs translates into roughly $3.6 B of capital investment
Our current backlog of signed long-term PPAs for wind and solar projects translates into roughly $3.6 B of capital investment through 2016 Estimated Cap Ex(1) for Wind March 2013 Backlog and Solar Projects in Backlog ($MM) • ~600 MW Canadian wind $2,000 program $1.7-1.9 B • 175 MW of new 2013 U.S. $
Slide 29: Strong renewable energy prospects beyond the current backlog
Energy Resources has strong renewable energy prospects beyond the current backlog Renewable Energy Development Opportunities Wind Solar • PTC extension creates an • Expect up to 300 MW of opportunity for new U.S. additional opportunities wind development through 2016 • Expect 500-1,500 MW(1) of • Up
Slide 30: March 2013 backlog projects remain on track
The projects in our March 2013 backlog remain on track and we continue to execute on new incremental opportunities Energy Resources Development Highlights March 2013 Backlog Status • 175 MW of 2013 U.S. wind(1) • On track • ~600 MW of Canadian wind • On track • ~900 MW of solar • On track Incrementa
Slide 31: Consciously shifting the focus of our portfolio
We have been consciously shifting the focus of our portfolio Energy Resources’ Adjusted EBITDA(1) 100% 11% 15% 14% 75% 22% 40% 26% 50% 59% 64% 25% 49% 0% 2009 2012 2014 Long‐Term Contracted Merchant Peripheral Businesses 31 (1) See appendix for definition of Adjusted EBITDA
Slide 32: Evaluating portfolio to reduce merchant exposure
We continue to evaluate our portfolio for opportunities to reduce merchant exposure Energy Resources’ Merchant MW(1) 10,000 • Consciously focused on reducing merchant exposure by contracting previously 8,000 8,780 merchant assets or selling our asset position 7,536 6,960 6,732 • Made decision in Q1
Slide 33: 88% ownership share of Seabrook Station
Our 88% ownership share of Seabrook Station remains an important cornerstone of Energy Resources’ merchant operations Seabrook • One of newest nuclear units in 2010-2016 Adjusted EBITDA(1)(2) the United States ($MM) – Large unit provides scale:1,246 $600 Seabrook has not MW pressurized water reactor
Slide 34: Forney and Lamar well positioned in changing Texas market
Forney and Lamar are well positioned to take advantage of the changing market paradigm in Texas Merchant Fossil: Forney and Lamar ERCOT North On-Peak • Located in the attractive Spark Spread(1) ERCOT market and equipped ($/MWh) with proven technology $25 • Texas economy expected to grow at 3.5% from
Slide 35: Consciously shifting the focus of our portfolio
We have been consciously shifting the focus of our portfolio Energy Resources’ Adjusted EBITDA(1) 100% 11% 15% 14% 75% 22% 40% 26% 50% 59% 64% 25% 49% 0% 2009 2012 2014 Long‐Term Contracted Merchant Peripheral Businesses 35 (1) See appendix for definition of Adjusted EBITDA
Slide 36: Leveraging our skills to generate additional earnings with little incremental capital
By leveraging our skills we have generated additional earnings and cash flows with little incremental capital or risk Capital Employed (Year-end 2012) Wholesale Full Structured Competitive Proprietary Origination PMI/Retail Requirements Products Retail Trading 1% Competitive Proprietary Retail Tradi
Slide 37: One of the largest consumers of natural gas in the U.S. power sector
NextEra Energy is one of the largest consumers of natural gas in the U.S. power sector U.S. Power Company Annual Gas Consumption (2011) Gas Infrastructure Rationale (Bcf) • NextEra Energy is one of 800 the largest consumers of 700 natural gas in the U.S. 600 power sector 500 – Over 700 Bcf in 2011 4
Slide 38: Economic returns from gas infrastructure business have been attractive
Our economic returns from the gas infrastructure business have been attractive, and we have gained valuable insight into the dynamics of the gas business Typical Shale Gas – Activities To-Date Return on Investment(1) 4-5 Year Simple Payback • 12-15% unlevered return 40% 37% • 4 to 5-year simple payb
Slide 39: 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 39 (1) See Appendix for definition of Adjust
Slide 40: NextEra Energy Transmission
NEXT@ra’ ENERGY & TRANSMISSION
Slide 41: Lone Star CREZ project cornerstone of growing transmission business
The Lone Star CREZ project in Texas is the cornerstone of our growing transmission business Lone Star Transmission • 330 mile, 345 kV line and five substations in Texas • Fully energized on time and under budget • Total capital investment of approximately $780 MM • Authorized 45% equity and 9.6% ROE
Slide 42: Market for new transmission projects offers increasing opportunities to compete
The overall market for new transmission projects is aligned regionally, with increasing opportunities to compete Competitive Transmission Opportunity Set • Competing for $4 B of investment opportunities in several jurisdictions – Alberta – Hawaii – New England – New York – Ontario • Decisions expect
Slide 43: NextEra Energy
NEXT abe ENERGY &%
Slide 44: Credit metrics expected to return to historical levels by 2014
We expect our credit metrics to return to historical levels by 2014 NextEra Energy’s Credit Metrics(1) Adjusted Debt to Total Capital Adjusted FFO to Debt 53.0% 30.0% 52.0% 51.8% 25.2% 25.0% 52.0% 25.0% 51.0% 20.3% 20.0% 17.0% 50.0% 49.4% 15.0% 49.0% 48.3% 10.0% 48.0% 47.0% 5.0% 46.0% 0.0% 2009 2012
Slide 45: Financing Strategy: 2013 - 2016
Any equity issuances to support incremental capital deployment opportunities through 2016 are likely to be in the form of straight common stock, rather than equity units Financing Strategy: 2013 - 2016 • At FPL: – Maintain consistent balance sheet ~60% regulatory equity ratio – Focus on long-dated m
Slide 46: Free cash flow position is improving every year
Our free cash flow position is improving every year NextEra Energy’s Free Cash Flow Before Dividends 2013 2014 2016 Operating Cash Flow $4.7 B to $4.9 B $5.6 B to $5.9 B $6.2 B to $6.6 B Capital Expenditures(1) ($5.0) B to ($5.7) B ($4.4) B to ($6.9) B ($2.8) B to ($4.9) B Other Investing $0.3 B to
Slide 47: Business mix shifting towards more 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 48: Dividend policy reflects increasing contribution from 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 2011 to 2014 CAGR: ~10% • Implemented dividend policy $2.80 - $3.00 ? $2.64(2) of
Slide 49: Well-positioned for future growth: Investment Proposition
We are well-positioned for future growth NextEra Energy – Investment Proposition • Above-average and highly visible growth through 2016 – Four years of regulatory certainty at FPL – Strong backlog at Energy Resources with upside potential • Strong and increasing cash flow from operations • Moderate
Slide 50: NextEra Energy
NEXT abe ENERGY &%
Slide 51: Appendix
NEXTera’ ENERGY 2 a Appendix
Slide 52: Reconciliation of Adjusted Earnings to Net Income
NextEra Energy, Inc. Reconciliation of Adjusted Earnings to Net Income ($ millions) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Net Income $479 $903 $896 $901 $1,281 $1,312 $1,639 $1,615 $1,957 $1,923 $1,911 Adjustments, net of income taxes: Net unrealized mark-to-market (gains) losses as
Slide 53: Reconciliation of Adjusted Earnings Per Share to Earnings Per Share
NextEra Energy, Inc. Reconciliation of Adjusted Earnings Per Share to Earnings Per Share 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Earnings Per Share (assuming dilution) $1.38 $2.53 $2.48 $2.34 $3.23 $3.27 $4.07 $3.97 $4.74 $4.59 $4.56 Adjustments: Net unrealized mark-to-market (gains)
Slide 54: 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 55: Definitional information
Definitional information NextEra Energy Resources, LLC. Adjusted EBITDA Adjusted EBITDA includes Energy Resources’ consolidated investments as well as its share of earnings from equity method investments. Adjusted EBITDA for each category set forth above is represented by (a) revenue, including a pr
Slide 56: 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 57: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) failure or breach of NextEra Energy's and FPL's information technology systems; risks to NextEra Energy and FPL's retail businesses of compromise of sensitive customer data; risks to NextEra Energy and FPL of volatility in
Slide 58: NextEra Energy
NEXT abe ENERGY &%