Nextera Energy, Inc. · NYSE:NEE
Nextera Energy — Q1 2016 Earnings Presentation
43 slides from Nextera Energy's earnings presentation, Apr 28, 2016
Slide 1: Earnings Conference Call First Quarter 2016
Earnings Conference Call First Quarter 2016 April 28, 2016
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: First Quarter 2016 Highlights
Strong financial results and solid first quarter execution against objectives for both NEE and NEP First Quarter 2016 Highlights • NEE achieved adjusted EPS of $1.55(1), up ~10% from the prior-year comparable quarter • FPL: – Port Everglades came online April 1st, ahead of schedule and on budget – C
Slide 4: FPL's EPS grew 5 cents from the prior-year comparable quarter
FPL’s EPS grew 5 cents from the prior-year comparable quarter Florida Power & Light Results – First Quarter Net Income EPS ($ MM) $393 $0.85 $359 $0.80 2015 2016 2015 2016 4
Slide 5: Florida Power & Light EPS Contribution Drivers
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) First $B Quarter 35.0 $32.8 $30.2 FPL – 2015 EPS $0.80 30.0 Drivers: 25.0 New Investments $0.09 20.0 15.0 Share dilution and o
Slide 6: Florida Economy
Florida’s economic growth remains solid Florida Economy Florida Unemployment(1) Florida Consumer Sentiment(2) 12% 100 90 10% 80 Mar-16 8% 70 60 6% 50 40 4% 30 2% 20 10 0% 0 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 F
Slide 7: Customer Characteristics
FPL’s first quarter retail sales were driven higher by customer growth Customer Characteristics (through March 2016) Retail kWh Sales Customer Growth(1,3) (Change vs. prior-year quarter) 100 (Change vs. prior-year quarter) 80 64 Customer Growth & Mix 1.3% # of 60 UKU Impact Customers + Usage Change
Slide 8: FPL Base Rate Proceeding
FPL submitted its formal base rate filing on March 15th FPL Base Rate Proceeding • Proposed 2017 - 2020 base rate plan is largely consistent with what we indicated in the test year letter: – $866 MM adjustment effective January 2017 – $262 MM adjustment effective January 2018 – $209 MM adjustment ef
Slide 9: Energy Resources' adjusted EPS increased 8 cents
Energy Resources’ adjusted EPS increased 8 cents from the comparable prior-year quarter Energy Resources Results(1,2) – First Quarter GAAP Adjusted Net Income EPS Net Income EPS ($ MM) ($ MM) $306 $280 $0.66 $0.62 $262 $0.58 $224 $0.48 2015 2016 2015 2016 2015 2016 2015 2016 (1) Attributable to NEE,
Slide 10: Energy Resources First Quarter Adjusted EPS Contribution Drivers
Energy Resources’ adjusted EPS growth was largely driven by contributions from new investments Energy Resources First Quarter Adjusted EPS(1) Contribution Drivers $0.90 $0.80 $0.04 ($0.04) $0.14 ($0.06) $0.70 $0.66 $0.58 $0.60 $0.50 ($0.10)Renewables $0.04 Gas Pipelines $0.40 $0.30 $0.20 $0.10 $0.00
Slide 11: Energy Resources 2015-2016 Development Program
Energy Resources originated over 4,000 megawatts of new renewables for 2015 – 2016, making it the most successful development period in its history Energy Resources 2015-2016 Development Program(1) • 2015 – 2016 development program results: – ~4.0 GW total program size includes ~1.5 GW brought into
Slide 12: Drivers for New Renewables
Energy Resources’ renewables development opportunities have never been stronger Drivers for New Renewables • Certainty of U.S. Federal Tax incentives for renewables • Improvements in wind and solar technology and declining cost trends • State regulatory programs to encourage development of renewable
Slide 13: Energy Resources 2017-2018 Development Program
We expect our 2017 – 2018 development program to be in line with our record results for 2015 – 2016 Energy Resources 2017-2018 Development Program(1) • We have increased expectations for our 2017-2018 development program – Current expectations reflect particularly strong demand for wind with a midpo
Slide 14: NextEra Energy Partners – First Quarter Drivers
NEP delivered strong first quarter results, driven by portfolio growth over the last year and good operating performance NextEra Energy Partners – First Quarter Drivers(1) Adjusted EBITDA CAFD ($ MM) ($ MM) $180 $75 $160 $5 ($6) $65 $78 ($6) $141 $55 ($6) $140 $10 ($6) $45 $55 $38 $120 $35 $100 $25
Slide 15: NextEra Energy EPS Summary – First Quarter
NextEra Energy’s adjusted earnings per share increased ~10% versus the prior-year comparable quarter NextEra Energy EPS Summary(1,2) – First Quarter GAAP 2015 2016 Change FPL $0.80 $0.85 $0.05 Energy Resources $0.62 $0.48 ($0.14) Corporate and Other $0.03 $0.04 $0.01 Total $1.45 $1.37 ($0.08) Adjust
Slide 16: NextEra Energy's Adjusted Earnings Per Share Expectations
NextEra Energy’s Adjusted Earnings Per Share Expectations(1) 2016 $5.85 - $6.35 $6.60 - $7.10 2018 (6% - 8% CAGR off a 2014 base) (1) See Appendix for definition of Adjusted Earnings expectations 16
Slide 17: NextEra Energy Partners' Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners’ Adjusted EBITDA and CAFD Expectations(1,2) Adjusted EBITDA CAFD 12/31/16 Run Rate(3) $640 - $760 MM $210 - $290 MM Unit Distributions 2016 $1.38 - $1.41 annualized rate by year end(4) 2016 - 2020 12% - 15% average annual growth(5) (1) See Appendix for definition of Adjusted
Slide 18: Q&A Session
Q&A Session NExTera’ NexTera energy” ENERGY & PARTNERS 2 18
Slide 19: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS 2 19
Slide 20: NExTera’
NExTera’ ENERGY @
Slide 21: Credit Expectations
Our current credit expectations are on track Credit Expectations Actual Actual Projected S&P A- Range 2014 2015 2016 FFO/Debt 23%-35% 25% 26% 26% Debt/EBITDA 2.5x-3.5x 3.5x 3.3x 3.3x Actual Actual Projected Moody’s Baa Range 2014 2015 2016 CFO Pre-WC/Debt 13%-22% 21% 21% 22% Debt Capitalization 45%-
Slide 22: Balance of 2016 Potential Sources of Variability
Potential drivers of variability to consolidated adjusted EPS Balance of 2016 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) ± $0.03 - $0.04 • Wind resou
Slide 23: NextEra Energy Resources Projected 2016 Portfolio Financial Information
NextEra Energy Resources Projected 2016 Portfolio Financial Information (1) Adjusted Value of pre-tax tax EBITDA by credits inlcuded in Maintenance Pre-Tax Cash Remaining Asset Category2 adjusted EBITDA3 Debt Service 4 Capital5 Other6 Flows7 Contract Life 8 NEER Contracted(9) Renewables $1,850 - $1,
Slide 24: NextEra Energy Resources Projected 2017 Portfolio Financial Information
NextEra Energy Resources Projected 2017 Portfolio Financial Information (1) Adjusted Value of pre-tax tax EBITDA by credits inlcuded in Maintenance Pre-Tax Cash Remaining Asset Category2 adjusted EBITDA3 Debt Service 4 Capital5 Other6 Flows7 Contract Life 8 NEER Contracted(9) Renewables $1,725 - $1,
Slide 25: Wind Production Index
Wind Production Index(1)(2) 2015 2016 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR Location MW Jan Feb Mar QTR MW QTR MW QTR MW QTR YTD MW Jan Feb Mar QTR Midwest 3,066 102% 99% 103% 101% 3,066 97% 3,066 95% 3,066 105% 100% 3,066 91% 100% 95% 95% West 2,931 76% 86% 81% 81% 2,931 88% 2,931 95% 3,119 93% 8
Slide 26: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) Asset/(Liability) Balance as of 12/31/15 $692.6 Amounts Realized During 1st Quarter (91.7) Primary Drivers: Revenue Hedges – Change in Forward Prices (all positions) 11.2 Power, Gas & Oil Prices $166.8 Subtotal – Income Statement
Slide 27: Non-Qualifying Hedges – Summary of Activity
Non-Qualifying Hedges(1) – Summary of Activity ($ millions, after-tax) 1st Quarter Asset / Deals Asset / (Liability) Change in Executed Total (Liability) Balance Amounts Forward During Unrealized Balance Description 12/31/15 Realized Prices Period (2) MTM 3/31/16 Generation Related: Natural gas rela
Slide 28: Non-Qualifying Hedges – Summary of Forward Maturity
Non-Qualifying Hedges(1) – Summary of Forward Maturity ($ millions, after-tax) Gain / (Loss) (2) Asset / (Liability) Balance Total Description 3/31/16 2016 2017 2018 2019 2020 - 2035 2016 - 2035 Generation Related: Natural gas related positions $ 601.0 $ (114.7) $ (115.0) $ (79.4) $ (63.0) $ (228.9)
Slide 29: Contracted Renewables Development Program
Contracted Renewables Development Program(1,2) Wind Location MW COD Solar Location MW COD Breckenridge OK 98 2015 Shafter CA 20 2015 Goshen Ontario 102 2015 Adelanto I & II CA 27 2015 East Durham Ontario 22 2015 McCoy Solar(3) CA 250 2016 Cedar Point JV Ontario 50 2015 Blythe(3) CA 110 2016 Golden H
Slide 30: Reconciliation of Adjusted Earnings to GAAP Net Income (Q1 2016)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended March 31, 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 31: Reconciliation of Adjusted Earnings to GAAP Net Income (Q1 2015)
Reconciliation of Adjusted Earnings to GAAP Net Income Attributable to NextEra Energy, Inc. (Three Months Ended March 31, 2015) 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 32: Definitional information
Definitional information NextEra Energy, Inc. Adjusted Earnings Expectations 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 Ener
Slide 33: Cautionary Statement And Risk Factors That May Affect Future Results
Cautionary Statement And Risk Factors That May Affect Future Results This earnings release 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
Slide 34: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) inability or failure by NextEra Energy Resources to manage properly or hedge effectively the commodity risk within its portfolio; potential volatility of NextEra Energy's results of operations caused by sales of power on th
Slide 35: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 36: Reconciliation of Net Income to Adjusted EBITDA and CAFD
Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) Q1 2016 Net income $ (14) Add back: Depreciation and amortization 46 Interest expense 86 Income taxes (3) Tax credits 28 Benefits associated with differential membership interests (12) Adjustment fo
Slide 37: HoldCo Debt Capacity
HoldCo Debt Capacity (March 31, 2016) $975-$1,075 $675 $ MM $300-$400 $30-$35 (3) $15-$25 $280-$310 ~3.5x $210-$240 $10-$20 Estimated Corporate IDR Fees(2) HoldCo Cash Project HoldCo HoldCo Remaining (2) (2) Pre-tax Expenses Interest Available Level to Debt Debt HoldCo (1,2) (4) (4) CAFD Pre-tax Ser
Slide 38: Expected Cash Available for Distribution
Expected Cash Available for Distribution(1) (December 31, 2016 Run Rate CAFD) $720-$840(2) ($10-$20) ($40-$60) $640-$760 ($240-$260)(3) ($155-$205)(4) $ MM ($20-$25)(5) ($5-$10) $210-$290(6) Project-level Corporate IDR Adjusted Debt Service Pre-tax Non-cash Maintenance Estimated Adjusted Expenses Fe
Slide 39: 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 revenue less fuel expense, project operating expenses, corporate G&A, plus other incom
Slide 40: Cautionary Statement And Risk Factors That May Affect Future Results
Cautionary Statement And Risk Factors That May Affect Future Results This earnings release 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 Nex
Slide 41: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP may incur significant costs and liabilities as a result of pipeline integrity management program testing and any necessary pipeline repair or preventative or remedial measures; The Texas pipelines’ operations could incu
Slide 42: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Acquisitions of existing clean energy projects involve numerous risks; Renewable energy procurement is subject to U.S. state and Canadian provincial regulations, with relatively irregular, infrequent and often competitive p
Slide 43: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) Holders of NEP's common units have limited voting rights and are not entitled to elect NEP's general partner or NEP GP’s directors; NEP's partnership agreement restricts the remedies available to holders of NEP's common uni