NextEra Energy, Inc. · NYSE:NEE
NextEra Energy — Edison Electric Institute Conference 2015
65 slides from NextEra Energy's conference presentation, Nov 8, 2015
Slide 1: Edison Electric Institute Conference
Edison Electric Institute Conference Hollywood, Florida November 8-11, 2015
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: Table of Contents
Table of Contents • NextEra Energy, Inc. Overview (NYSE: NEE) Slide 4 • Florida Power & Light Slide 11 • NextEra Energy Resources Slide 25 • NextEra Energy Partners, LP (NYSE: NEP) Slide 34 • Financial Review Slide 44 • Appendix Slide 48 3
Slide 4: 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 • $47 B market capitalization(1) • 45,347 MW in operation(2) • $80 B in total assets • Strategic partnership with • The largest individual • The world leader in utility in the nation by electricity generated electric
Slide 5: NextEra Energy: Investment Proposition
NextEra Energy is well-positioned for future growth NextEra Energy: Investment Proposition • One of the top growth profiles in the industry – Expecting 6-8% compound annual growth rate in adjusted EPS through 2018 off a 2014 base • Leading dividend per share growth – Expecting growth in DPS of 12-14
Slide 6: NextEra Energy: Partnership with NEP
NEP forms an excellent complement to NextEra Energy NextEra Energy: Partnership with NEP • Best-in-class yieldco vehicle through – Strong sponsor with proven development track record – Extensive potential drop down visibility – Well-aligned incentives, using proven MLP-like structure with IDRs • Hig
Slide 7: Built on operational excellence and financial strength, focused on clean generation
Built on a foundation of best-in-class operational excellence and financial strength, and focused on clean generation Cost and Reliability Generation Profile 2014 Utility & Corporate Benchmarks 2014 NextEra Energy Fuel Mix MWhs(4) Good Industry 7.4% Nuclear Wind Good 26% 17% Industry ~$24 FL Avg ~97
Slide 8: Long-term track record of delivering value to shareholders
We have continued our long-term track record of delivering value to shareholders Adjusted Earnings Per Share(1) Total Shareholder Return(2) $5.30 35% 100% 93% 4.97 4.39 4.57 30% 28% 29% 4.30 80% 75% 3.84 4.05 25% 3.49 3.04 60% 2.49 2.63 20% 48% 14% 15% 40% 10% 20% 5% 0% 0% '04 '05 '06 '07 '08 '09 '1
Slide 9: Growth strategy built around core strengths
A key part of our strategy has been to build around our core strengths, taking advantage of market opportunities Growth Strategy Core Strengths Operational Excellence + Financial Strength + Visible Growth Opportunities 2014 Storage Skills 2014 FPL Gas Reserves 2013 Gas Pipelines + 2012 Distributed S
Slide 10: Growth strategy has led to real change in relative position
Over a sustained period of time, our growth strategy has led to real change in relative position Top 20 Global Utility Equity Market Capitalization(1) As of 6/1/2001 ($ MM) As of 10/29/2015 ($ MM) Rank Market Cap Rank Market Cap 1 $38,574 1 $53,076 2 $38,185 2 $49,264 3 $34,476 3 $46,866 NextEra Ene
Slide 11: 11
11
Slide 12: FPL: Areas of Focus
FPL remains focused on delivering outstanding customer value and deploying capital productively FPL: Areas of Focus • Unyielding commitment to customer value proposition – Low bills – High reliability – Clean emissions – Excellent customer service • Focus on efficiency has driven best-in-class perfo
Slide 13: March 2015 Key Initiatives: Status
We have been very successful in executing against the initiatives we laid out in March 2015 for FPL March 2015 Key Initiatives: Status • Continued successful delivery of superior customer value – Typical residential customer bills significantly below state and national averages and lower than 10 yea
Slide 14: FPL core strategy: The Virtuous Circle
Our core strategy at FPL has been consistent for many years The “Virtuous Circle” Superior Customer Value Delivery Strong Customer Financial Virtuous Circle Satisfaction Position Constructive Regulatory Environment 14
Slide 15: Typical residential bills below Florida and national averages
FPL’s strategy continues to result in typical residential bills below both Florida and national averages Typical Customer Bill(1) ~$137 ~$121 ~$109 ~$101 ~$97 ~$94 FPL (2) FPL (2) FPL (3) FPL FL IOU National (4) (6) 2006 2014 2015 2016 Average Average 2015 (5) (1) Rates based on a typical 1,000 kWh
Slide 16: Low cost position and best-in-class operations
Our value delivery is founded on a low cost position and best- in-class operations Operational Cost Effectiveness(1) $100.00 Good Adjusted Regressed Top Decile $/Retail MWh FPL ~$15 Log/Log $10.00 1,000,000 10,000,000 100,000,000 1,000,000,000 Retail MWh (1) FERC Form 1, 2014. Excludes pensions and
Slide 17: FPL recognized as nation's most reliable electric utility
FPL has been recognized as the nation’s most reliable electric utility by delivering value to customers through superior reliability System Average (1) System Average Interruption Duration Index Interruption Frequency Index(2) Avg # of Minutes Interruptions 150 2.00 FL Industry Average Good 125 1.50
Slide 18: FPL a national leader in customer service
FPL has continued to be recognized as a national leader in customer service Customer Service • Edison Electric Institute – No. 1 in outstanding national key accounts customer service • E Source benchmarking – No. 1 in survey of large customers • Southeastern Electric Exchange – Industry excellence a
Slide 19: FPL 2015-2018 Investment Initiatives
We continue to have a great set of opportunities ahead of us FPL 2015 – 2018 Investment Initiatives Projected Opportunity Investment(1) • Transmission & Distribution Infrastructure Investments from 2015-2018 ~ $3 - $4 B • Generation Modernizations(2) Port Everglades on schedule and on budget ~ $1.2
Slide 20: Transmission and Distribution Infrastructure Investments
We have focused on growth capital and long-term infrastructure improvements that will continue to improve system reliability Transmission and Distribution Infrastructure Investments • From 2015-2018 FPL expects Potential Impact to invest $3-4 B in T&D of Reliability Investments(1) infrastructure inv
Slide 21: Longer term, state growth will require more infrastructure
Longer term, our state continues to grow and will require more infrastructure 2019 Combined Cycle Unit • Announced plans in July ’15 to • State of the art Natural Gas move forward with the Combined Cycle (NGCC) facility Okeechobee Clean Energy Center – $1.2 B capital investment – Filed a determinati
Slide 22: Natural Gas Reserves
We continue to look for opportunities to drive out variable costs and improve customer economics to lock in today’s low natural gas prices Natural Gas Reserves • Woodford Project approved • Received FPSC approval of by FPSC in December ’14 modified natural gas reserve – JV with PetroQuest guidelines
Slide 23: Utility Scale Solar Investments
We are developing three new large scale solar projects that are cost effective for customers and provide fuel diversity Utility Scale Solar Investments • Developing three large scale solar projects that are cost effective for customers – Combined ~223 MW – $400 - $420 MM capital investment • Further
Slide 24: FPL regulatory capital employed projected to grow by 2018
FPL’s average regulatory capital employed is projected to be $36.0 B - $39.0 B by 2018 Average Regulatory Capital Employed $40 $36.0 - $39.0 $35 $30 $29.3 $25 $B $20 $15 $10 $5 $0 2014 2018E Regulatory capital employed is a function of capital expenditures, depreciation and retirements 24
Slide 25: NextEra Energy Resources
NEXTeCra’ ENERGY & RESOURCES
Slide 26: Energy Resources' clean and low cost generation portfolio
Energy Resources’ clean and low cost generation portfolio consists of a diverse set of technologies positioned in a number of regions Energy Resources’ Generation Portfolio(1) Wind 58% Natural Gas Nuclear 20% Oil 2,721 MW 4% Solar Nuclear 4% 14% 1,400 CO2 Emissions (lbs/MWh) 1,200 1,000 Top 50 Power
Slide 27: Growth driven by best-in-class development skills
Energy Resources’ growth is driven by its best-in-class development skills Growth in New Businesses Wind and Solar Portfolio(1) 18,000 Customer Wind Relationships Engineering/ Regulatory 12,000 Solar Construction MW Management 6,000 0 Best-In-Class Integrated 2002 2004 2006 2008 2010 2012 2014 2015
Slide 28: Drivers for New Renewables
The opportunities for renewables have never been stronger Drivers for New Renewables • Wind technology and efficiency improvements – Expect another step change in technology approaching market levelized cost of electricity by the end of the decade in high wind resource regions • Solar installation c
Slide 29: EPA Clean Power Plan
Requirements for lower emission rates under the EPA Clean Power Plan has the potential to drive significant demand EPA Clean Power Plan • Estimated annual CO2 reductions of 32% below 2005 levels by 2030(1) • State emission targets based on three building blocks – Efficiency improvements at affected
Slide 30: Expect to exceed 2015-2016 U.S. wind development program
We expect to exceed the high end of the 2015-2016 U.S. wind development program range we shared in March 2015 Energy Resources 2015-2016 Development Program(1) March 2015 Investor Conference(2) 2015-2016 Signed Additional Potential Total U.S. Wind 980 1,100 – 1,300 2,080 – 2,280 Canadian Wind 174 –
Slide 31: Expanding into the gas pipeline business
We have leveraged our skills and capabilities from gas infrastructure activities to expand into the gas pipeline business Gas Pipeline Assets Sabal Trail and Florida Mountain Valley Pipeline(1) NET Midstream(2) Southeast Connection(1) • NextEra to invest ~$1 B in • NextEra to invest $1.0-$1.3B • NEP
Slide 32: Competitive transmission opportunity set
Lone Star was the first significant project for our transmission business followed by awards in Ontario and California Competitive Transmission Opportunity Set Awarded Projects Incremental Potential Texas Lone Star Competitive Solicitations Underway/Pending • 330 mile, 345 kV line and five substatio
Slide 33: Battery storage as a potential game-changer
While still in its infancy, battery storage has the potential to be a game-changer for the renewable energy industry Storage Technology • Storage is a natural extension of Lithium Ion Battery our development business and Cost Curve and complements the balance of our Production(1) portfolio • Applica
Slide 34: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 35: Characteristics of a Great Yieldco
We believe NEP is the premier company in the yieldco space and we are focused on sustaining this position Characteristics of a Great Yieldco NEP • Strong sponsor • Operational excellence • High quality projects • High-profile drop-down visibility • Well-aligned incentives 35
Slide 36: NEP benefits from substantial sponsor strength
NEP benefits from substantial sponsor strength Sponsor Strength Operational Sponsor Excellence Alignment • Largest generator in the world of renewable energy from the wind and sun • ~20,100 MW in operation(1) • Assets primarily in 25 states and Canada • Portfolio efficiencies driven by scale, techno
Slide 37: NEP has more than doubled its portfolio since the IPO
NEP has more than doubled the size of its portfolio since the IPO NEP Portfolio Additions Renewables Capacity(1) Annualized Rate of DPU(2) 2,072 MW $1.23 $0.75 990 MW IPO Q4 2015 IPO Q4 2015 (Est) Run-Rate Adjusted EBITDA(3) Run-Rate CAFD(3) $540-$580 MM $190-$220 MM $245-$255 MM $85-$90 MM IPO 12/3
Slide 38: NEP portfolio characteristics
NEP consists of a diverse set of high-quality assets, with long contract lives, minimal commodity risk and largely investment-grade counterparties NEP Portfolio Characteristics Average Contract Life(1) Average Counterparty Credit(2,3) A3 21 Years 19 Years A2 IPO 12/31/15 (Est) IPO 12/31/15 (Est) Ass
Slide 39: The NEP portfolio is diversified by geography and asset mix
The NEP portfolio is diversified by geography and asset mix The NEP Portfolio Wind Asset Solar Asset Pipelines 39
Slide 40: Expected Cash Available for Distribution (2015 run-rate)
NEP has completed all anticipated acquisitions for 2015 and is well positioned to deliver 2016 growth expectations Expected Cash Available for Distribution(1) (12/31/2015 Run-Rate CAFD) $580-$620(2) ($15-$20) ($20-$25) $540-$580 ($220-$260)(3) ($75-$85)(4) $ MM ($20-$25)(5) ($5-$10) $190-$220(6) Pro
Slide 41: Expected Cash Available for Distribution (2016 run-rate)
NEP has the flexibility to issue a modest amount of equity to continue to grow the portfolio in 2016 Expected Cash Available for Distribution(1) (12/31/2016 Run-Rate CAFD) $720-$840(2) ($15-$25) ($40-60) $640-$760 ($265-$285)(3) ($125-$185)(4) $ MM ($20-$25)(5) ($5-$10) $210-$290(6) Project-level Co
Slide 42: Long-Term Growth Outlook – LP Distributions per Unit
After the acceleration of growth in 2015, our current expectations are for NEP to grow LP distributions by 12-15% annually through 2020 Long-Term Growth Outlook – LP Distributions/Unit(1) $2.17-$2.47 $2.50 $2.00 $1.50 $1.38-$1.41 $1.23 $1.00 $0.50 $0.00 2015 2016 2017 2018 2019 2020 12% Growth 15% G
Slide 43: NEP Adjusted EBITDA and CAFD Expectations
NextEra Energy Partners’ Adjusted EBITDA and CAFD Expectations(1, 2) Adjusted EBITDA CAFD 2015 $400 - $440 MM $100 - $120 MM 12/31/15 Run Rate(3) $540 - $580 MM $190 - $220 MM 12/31/16 Run Rate(4) $640 - $760 MM $210 - $290 MM Unit Distributions 2015 ~$1.23 annualized rate by year end 2016 - 2020 12
Slide 44: Financial Review
NEXT@ra ANANCIAL REVIEW
Slide 45: Adjusted Earnings Per Share Expectations
NextEra Energy Adjusted Earnings Per Share Expectations(1) Upper half of 2015 $5.40 - $5.70 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 45
Slide 46: NextEra Energy Dividend Expectations
NextEra Energy announced a new dividend policy on the second quarter earnings call NextEra Energy Dividend Expectations Dividend Per Share Growth Dividend Policy • Targeting increased rate of dividend growth $4.30 - $4.60 • Dividend payout ratio expected to increase from 55% current level to 65% $3.
Slide 47: 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% 66% 58% 60% 60% 40% 40% 20% 20% 0% 0% 2011 201
Slide 48: Appendix
Appendix NExTera’ NexTera energy” ENERGY & PARTNERS Z 48
Slide 49: NextEra Energy, Inc.
NEX Tera ENERGY &
Slide 50: Energy Resources 2015-2018 Development Program
We expect to update the development program by our first quarter earnings call next year in April 2016 Energy Resources 2015-2018 Development Program(1) March 2015 Investor Conference(2) 2015-2018 Signed Additional Potential Total U.S. Wind 980 1,850 – 2,150 2,830 – 3,130 Canadian Wind 174 – 174 U.S
Slide 51: 2015-2018 Contracted Renewables Development Program
2015-2018 Contracted Renewables Development Program(1,2,3) Wind Location MW COD Solar Location MW COD Breckenridge(4) OK 98 2015 Shafter(2) (4) CA 20 2015 Goshen(4) Ontario 102 2015 Adelanto I & II(4) CA 27 2015 East Durham(4) Ontario 22 2015 McCoy Solar CA 250 2016 Cedar Point JV Ontario 50 2015 Bl
Slide 52: Energy Storage Applications
While still in its infancy, battery storage has the potential to be a game-changer for the renewable energy industry Energy Storage Applications Generation Transmission Distribution Customer Capacity Frequency Regulation T&D Asset Deferral Peak Shaving, Capacity Renewable Ramping Voltage Support Pea
Slide 53: Reconciliation of EPS to Adjusted EPS
Reconciliation of Earnings Per Share Attributable to NextEra Energy, Inc. to Adjusted Earnings Per Share 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) $2.48 $2.34 $3.23 $3.27 $4.07 $3.97 $4.74 $4.59 $4.56 $4.47 $5.6
Slide 54: Reconciliation of 2011 Adjusted EBITDA
Reconciliation of 2011 Adjusted Earnings Before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA) to Net Income (Full-Year Ended December 31, 2011) ($ in millions) GAAP Adjustments Adjusted (1) Net income $1,923 ($86) $1,837 Add back interest 1,034 0 1,034 (1) Add back income taxes 529
Slide 55: Reconciliation of Adjusted Earnings to Net Income
Reconciliation of Adjusted Earnings to Net Income ($ millions) 2011 Net Income $1,923 Adjustments, net of income taxes: Net unrealized mark-to-market losses (gains) associated with non-qualifying hedges (190) Loss (income) from other than temporary impairment losses, net 6 Loss on sale of natural ga
Slide 56: 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 57: 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 58: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) inability or failure 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 the spot market or on a short-
Slide 59: NextEra Energy Partners
NExTera energy” PARTNERS Z
Slide 60: Reconciliation of Income Before Taxes to Adjusted EBITDA and CAFD
Reconciliation of Income Before Taxes to Adjusted EBITDA and Cash Available for Distribution (CAFD) (millions) 2015E Income before income taxes $85 - $90 Less financial results of entities under common control prior to their respective acquisition dates (65 - 75) Add back: Depreciation and amortizat
Slide 61: 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, a portion of corporate G&A asso
Slide 62: 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 63: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP may not be able to extend, renew or replace expiring or terminated agreements, such as its power purchase agreements (PPAs), Renewable Energy Standard Offer Program (RESOP) Contracts and FIT Contracts, at favorable rate
Slide 64: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP may be unable to terminate the management services agreement among NEP, NextEra Energy Management Partners, LP (NEE Management), NEP OpCo and NEP GP (Management Services Agreement); if NEE Management terminates the Mana
Slide 65: Cautionary Statement And Risk Factors (cont.)
Cautionary Statement And Risk Factors That May Affect Future Results (cont.) NEP may fail to realize the growth prospects anticipated as a result of the NET Midstream acquisition; uncertainties associated with the NET Midstream acquisition may cause a loss of management personnel and other key emplo
NextEra Energy — Edison Electric Institute Conference 2015 on 6ix