Investor Conference – Nextera Energy Inc.

Nextera Energy Inc. · Jan 21, 2015 · 168 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

INVESTOR CONFERENCE 2015
Investor Conference 2015 Date: March 11, 2015 Location: New York, NY Presentation Speakers Time Opening Remarks 1:00 1:05 p.m. Introduction & Overview Jim Robo 1:05 1:35 p.m. Florida Power & Light Eric Silagy, Bob Barrett 1:35…
INVESTOR CONFERENCE 2015 Introduction and Overview Jim Robo Chairman and CEO March 11, 2015
Agenda NextEra Energy Value Proposition Growing a Multibillion Dollar Company NEP Value Proposition How NEE and NEP Support Each Other The Role of M&A 5
Our areas of focus have remained consistent since our last investor conference in early 2013 NextEra Energy: Areas of Focus At FPL: Consistently deliver superior customer value through world class daily operations (low bills, high…
We have been very successful in executing the initiatives we discussed in 2013 March 2013 Key Initiatives and Status FPL FPL Current Status Focus on productivity 2014 base O&M declined 100 MM vs. 2012 Incremental storm…
We have also resolved key uncertainties and pursued new initiatives not discussed in 2013 Other Developments: 2013 - 2014 FL Supreme Court affirmed 2012 FPL Rate Agreement FL Governor Scott re-elected PTC program extended through…
2014 was another very strong year for NextEra Energy 2014 Performance Review Achieved adjusted EPS of 5.30(1) up 6.6% vs. 2013 Successfully executed on 200 MM of annual O&M savings identified through Project Momentum Outstanding…
As a result, we extended our long term track record of delivering value to shareholders Adjusted Earnings Per Share(1) Total Shareholder Return(2) 35% 100% 93% 5.30 4.97 30% 28% 29% 75% 4.05 4.30 4.39 4.57 80% 3.84 25% 3.49…
We are well positioned to continue this track record for the next four years FPL T&D FPL New FPL Gas Infrastructure Solar Reserves FPL FPL Energy FPL New Upgraded Company Generation Generation M&A Services 30 B - 34 B of…
Like all companies, we have our headwinds, uncertainties, and our upside opportunities Headwinds/Uncertainties Additional Potential/Upsides PTC/ITC roll-off Stronger commodity prices 2007 was a 1,000 MW wind EPA Clean Power Plan…
Our total return proposition remains attractive Annual Value Proposition 2015 2018 Expected 8 10% Expect to continue trend of 5 - 7% annual growth in adjusted EPS Expected 2014 actual: 5.30(1) Growth Growth 5 7% 2018…
Some will argue that NEEs value proposition is simply middle-of-the-road Annual Value Proposition(1) Top 10 Power Companies by Market Cap 10% 8-10% 8% 8% 7% 7% 6% 5% 1% NEE (5%) 14 (1) For peers, dividend yield plus…
NEE has outperformed all but one of the large caps in the space in adjusted EPS growth over the last ten years 10-year Adjusted EPS CAGR(1) Top 10 Power Companies by Market Cap 10% 9.3% 7.8% 8% 6.9% 6% 5.1% Adj. EPS 4.1% 3.9%…
Investors may also wish to consider the quality of earnings growth 10-year Cumulative EPS Adjustments(1) Top 10 Power Companies by Market Cap GAAP higher 5% than 1% Adjusted EPS % Cumulative (0%) Adjusted Adjustments higher…
NEE has grown GAAP EPS over the last decade faster than any of the large caps in the space 10-year GAAP EPS CAGR(1) Top 10 Power Companies by Market Cap 10% 8.5% 5.9% 5% 3.3% 2.0% 1.9% 1.7% 0.8% 0.7% GAAP EPS % CAGR (0.1%)…
A key element of our track record and value proposition is a culture focused on delivering results for shareholders Culture of Delivering Results Talent of our team Key elements of our culture: Financial discipline Operational…
Over a sustained period of time, these factors lead to real change in relative position Top 20 Global Utility Equity Market Capitalization As of 6/1/2001 ( MM) As of 12/31/2014 ( MM) Market Market Rank Company Rank Company Cap…
Agenda NextEra Energy Value Proposition Growing a Multibillion Dollar Company NEP Value Proposition How NEE and NEP Support Each Other The Role of M&A 20
Our starting point is a long-term vision Long-Term Vision Largest, most profitable clean energy provider in the U.S. Best skills and capabilities across the industry value-chain FPL: the best utility in the U.S. Operations…
Our toe-in-the-water approach to growth tailors resources and risk to business maturity Increasing Capital Limited Commitment Limited Exposure R&D Pilot Early Growth Mature Monitoring Projects Stage Phase Operations…
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 FPL…
Our toe-in-the-water approach to growth has been very successful 70 FPL Wholesale 14,000 NEER Wind(1) 60 11,427 60 12,000 Net 50 10,000 Income MW MM 40 8,000 30 6,000 20 4,000 1,745 10 2,000 0 0 0 2007 2014 2002 2014…
NextEra Energy has many opportunities to grow FPL T&D FPL New FPL Gas Infrastructure Solar Reserves FPL FPL Energy FPL New Upgraded Company Generation Generation M&A Services Asset FiberNet Transmission Growth NEP…
We challenge ourselves to improve our business from a position of strength Growth Capability Balanced growth between our utility and renewables businesses remains central to our story Our financial strength and discipline allow us…
Agenda NextEra Energy Value Proposition Growing a Multibillion Dollar Company NEP Value Proposition How NEE and NEP Support Each Other The Role of M&A 27
We believe NEP is the premiere 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…
A key determinant of the attractiveness of a yieldco is its pipeline of additional projects Drop-Down Assets as Multiple of Current Portfolio 11.5x 3.2x 2.3x 1.9x 0.6x 0.5x NEP (1) Power Yieldcos (2) (1) For NEP,…
We believe NEP and NEE investors all benefit from the tight alignment of interests provided by the NEP structure IDR Fee Accretive Asset Sale Interest Increase Proceeds Drop- IDR Fee Downs Cash Flows Driving LP Unit…
We are re-affirming our financial expectations for NEP NEP Expectations(1,2) Adjusted EBITDA CAFD 2015 400 - 440 MM 100 - 120 MM 2016 580 - 620 MM 170 - 190 MM Grow LP unit distributions to an annualized rate of at least…
NEP is expected to generate significant cash flow for NEE Total Cash Flows Received By NextEra Energy(1) 4 3.4-3.8 3 2.0-2.4 B 2 1.2-1.4 0.9-1.4 0.9-1.3 1 0.4-0.5 0 2015 2016 2017 2018 2019 2020 Drop-Down Proceeds LP…
Over time we expect that the NEP asset portfolio may become more diverse Characteristics of Potential Additional a Strong Yieldco Asset NEP Asset Classes Strong, stable, predictable Contracted fossil cash flow generation Long term…
NEPs value proposition does not depend on third- party acquisitions; however, we expect to be competitive Yieldco and MLP Trading Levels 13% 11% 9% Annualized Dividend 7% Yield(1) 5% 3% 1% NEP Over time, we expect…
Agenda NextEra Energy Value Proposition Growing a Multibillion Dollar Company NEP Value Proposition How NEE and NEP Support Each Other The Role of M&A 35
NEP forms an excellent complement to NEE NEE offers NEP NEP offers NEE Significant sponsor Highlights the value of strength with proven contracted renewable development track record generation assets Access to management,…
Agenda NextEra Energy Value Proposition Growing a Multibillion Dollar Company NEP Value Proposition How NEE and NEP Support Each Other The Role of M&A 37
We expect to continue to be disciplined and opportunistic in terms of corporate M&A Logic Constraints Implications Strong Moderate scale Must set clear operational and economics boundaries management skills can create Regulatory…
INVESTOR CONFERENCE 2015 Florida Power & Light Overview Eric Silagy President and CEO March 11, 2015 39
Agenda Introduction and Overview Florida Power & Light Value Proposition 40
The FPL story has remained consistent since our last investor conference FPL: Areas of Focus Unyielding commitment to customer value proposition Low bills High reliability Excellent customer service Focus on efficiency has driven…
We have enjoyed great success against the objectives we laid out in March 2013 March 2013 Key Initiatives: Status Executed well on major capital initiatives Successfully completed extended nuclear power uprate program Cape…
We continue to have a great set of opportunities ahead of us Overview of Opportunities We are focused on the underpinnings of our successful strategy: Deploying incremental capital and focusing on O&M savings Investments that…
Agenda Introduction and Overview Florida Power & Light Value Proposition 44
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 45
FPLs strategy continues to result in typical residential bills below both Florida and national averages Typical Customer Bill(1) 138.10 122.71 101.25 97.12 FPL FPL FL IOU National 2014(2) (3) 2015 Average Average (5) (4)…
We continue to score well on 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…
Our value delivery is founded on a low cost position and we have executed well on our productivity initiative Project Momentum Operational Cost Effectiveness(1) 100.00 Good Adjusted Regressed Top Decile /Retail MWh FPL…
We have focused on growth capital and long term infrastructure improvements that will improve system reliability Transmission and Distribution Infrastructure Investments From 2015-2018 FPL expects to invest 3-4 B in T&D Potential…
Our major generation initiatives are on track Generation Modernization Projects Produce a number of customer benefits: 33% more fuel-efficient Cape Canaveral Next Generation Expected to save customers more Clean Energy Center…
We are upgrading our existing gas turbines peakers with more efficient, advanced combustion turbines Generation Upgrades FPL currently has a fleet of 48 gas turbines or peakers to help ensure reliability Original GTs went into…
Replacing FPLs existing GT peakers with new CT technology is expected to provide a significant reduction in emissions Generation Upgrades Estimated Emissions Reductions % (1) (2) Existing New Reduction SOx 223 4 98% (Tons/Year)…
We are upgrading 26 7FA combustion turbine compressors to the newest .05 design .05 Compressor Upgrades Expected to reduce fuel cost for our customers by 600 MM over the life of the plants Improve emissions profile Inlet Exhaust…
Longer term, our state continues to grow and will require more infrastructure 2019 Combined Cycle Unit 1.0-1.1 B capital investment State of the art NGCC facility 1,622 MW (Summer) facility 6,293 BTU/kWh Expect one of the lowest…
FPL has the opportunity to create customer savings through an acquisition of the Cedar Bay facility Cedar Bay The Cedar Bay cogeneration facility is a 250 MW coal-fired power plant in Jacksonville, FL FPL has a contract with Cedar…
We recently announced three new large scale solar projects that are cost effective for customers Solar Investment Combined 223 MW 400 420 MM Cost effective for customers: Further reduces fuel cost Further improves emissions…
We are focused on identifying opportunities to deliver cost effective renewables for our customers Utility Scale vs. Distributed Solar Generation(1) Annual MWhrs Generated per 10 MM of Solar Capital Investment 14,000 13,000…
FPLs strategy continues to result in a CO2 emissions profile that is below both Florida and national averages FPL CO2 Emissions Profile 1,600 1,393 1,400 1,200 1,155 1,200 1,000 908 800 761 740 CO2 660 Lbs/MWh 600 400 200…
We continue to look for opportunities to drive out variable cost and improve customer economics Natural Gas Supply Project Investments in gas production should drive significant benefits for our customers Owning gas production…
FPL remains focused on delivering outstanding customer value and deploying smart capital Summary By focusing on delivering superior customer value, we put ourselves in the best position for regulatory proceedings By maintaining…
INVESTOR CONFERENCE 2015 Florida Power & Light Financial Review and Outlook Bob Barrett Vice President Finance March 11, 2015 61
Agenda Customers and Economy O&M Productivity Capital Investments FPLs Earnings Equation 62
The Florida economy is growing at its healthiest pace in years Annual Change in Florida Florida Unemployment(1) 400 Non-Farm Employment(2) 12% Lowest (1,000s) 10% unemployment rate since mid--2008 200 8% 0 5.6% 6% Strongest…
Floridas population growth has recently surpassed the U.S. rate and Florida is now the third most populous state Atlas World Group FL Population Growth(1) 2014 Migration(2) 5% (Annual Change) 4% Actual Projected FL growth has…
Floridas continued economic growth should help FPL achieve modest increases in customers and sales in the next few years Weather-Normalized Retail Delivered Sales 12-month sum GWH FORECAST 114,000 +1.5% 112,000 +2% 110,000 +2%…
The underlying components of our sales growth forecast are steady customer growth and near-term continued cyclical recovery in use per customer Annual Weather-Normalized Customer Growth Use per Customer (1,000s) FORECAST (KwH)…
Agenda Customers and Economy O&M Productivity Capital Investments FPLs Earnings Equation 67
FPLs continued focus on base O&M efficiency delivered its best performance ever in 2014 FPL Base O&M Costs in Real 2014 Dollars(1,2) 4.00 3.50 3.34 3.00 per kWh 2.50 (Real 2014 2.00 Dollars) 1.48 1.39 1.51 1.50 1.32 1.00…
Agenda Customers and Economy O&M Productivity Capital Investments FPLs Earnings Equation 69
FPL has invested significantly over the last decade in modernizing both its generation fleet and its transmission and distribution (T&D) network MM FPL Capital Expenditures(1) 5,000 4,000 3,000 2,000 1,000 0 2004 2005 2006…
Significant opportunity set to continue these initiatives and further improve our already outstanding customer value proposition Projected Capital Expenditures(1) B 5.0 4.5 3.9 - 4.3 4.0 3.4 - 3.7 3.3 - 3.8 3.5 3.0 2.5 2.0…
FPLs 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…
Agenda Customers and Economy O&M Productivity Capital Investments FPLs Earnings Equation 73
FPLs net income is largely a function of capital employed, capital structure (equity ratio) and ROE earned Net Income, Regulatory Capital Employed and ROE Net Income Regulatory Capital Employed 1,600 1,517 35 1,400 1,349 30 Total…
FPLs regulatory capital employed is comprised of several distinct categories of assets Regulatory Capital Employed 2014 13-Month Average FPLs adjusted retail rate base is the Total 29.3 B largest category of assets Retail portion…
FPLs regulatory capital structure is comprised of more than investor sources FPLs 2014 Retail Base Regulatory Capital Structure(1) Ratio Cost(2) Long-Term Debt 29.8% 4.79% Investor Sources Short-Term Debt 1.1% 2.25% Common…
Net income is largely a function of equity investment and return on equity 2014 Net Income Composition Average Average Implied Investment Equity Net Income ( B) ( B) ( MM) Retail Rate Base 25.6 11.9 1,365 Non-Retail Rate Base 1.1…
During FPLs settlement period, most of the variation in revenue and cost drivers is offset by the reserve amortization mechanism Reserve Amortization Mechanism FPL is allowed to amortize up to 400 MM of remaining surplus…
FPL has successfully executed on capital plans since the last investor conference and continues to find new avenues of growth Financial Summary FPL has a number of growth opportunities to provide value to customers and shareholders…
INVESTOR CONFERENCE 2015 NextEra Energy Resources Introduction Armando Pimentel President & CEO March 11, 2015
Energy Resources is a diversified clean energy company whose skills and assets are well aligned to drive future growth Skills and Capabilities + Asset Portfolio Future Growth Largest, most Terrific portfolio of Strong backlog of…
Energy Resources has a strong track record of growth Business Growth Adjusted EBITDA(1)(2) Adjusted Earnings(1)(2) 3,500 3,350 1,000 862 3,000 2,584 2,500 750 685 2,000 1,878 553 MM MM 500 1,500 1,000 622 250 173 500 351…
Energy Resources generation portfolio is diverse in terms of technology and is clean and low-cost Generation Portfolio Portfolio by Technology(1) CO2 Emissions 1,400 1,200 Wind 1,000 58% 2014 800 Top 50 Power Natural lbs/ 600…
Energy Resources growth is driven by its best-in- class development skills Growth in New Businesses Wind and Solar Portfolio(1) 18,000 Wind Customer Relationships 12,000 Solar Engineering/ Construction Regulatory MW Management…
New wind, solar, and infrastructure investments are expected to drive CapEx through 2018 Projected CapEx Through 2018(1) Wind 6 5.2-5.6 Solar Energy Resources All Other (2) 5 4.5-4.9 Infrastructure (3) 4 3.2-3.6(4) 3.0-3.4(4) B…
Adjusted EBITDA and adjusted earnings are expected to grow at roughly a 9% CAGR from 2014 to 2018 Forecast Through 2018 Adjusted EBITDA(1)(2) Adjusted Earnings(1)(2) 6,000 4,600- 4,100- 5,000 2,000 3,600- 4,500 1,175- 4,000 3,900…
NextEra Energy Partners is expected to provide 9-11 B of recycled capital through 2020 as well as a variety of other benefits for NextEra Energy NextEra Energy Partners Value Through 2020(1) Isolates and highlights the value of…
INVESTOR CONFERENCE 2015 NextEra Energy Resources Renewable Development Mike OSullivan Senior Vice President Development March 11, 2015
We have exceeded the renewable development expectations shared in 2013 2013-2014 Renewable Highlights Brought into service nearly 2,300 MW of new Recent Development Activity contracted renewables 2,500 1,275 MW of U.S. wind…
Renewable Portfolio Standards (RPS) are expected to support 5-8 GW(1) per year of new renewables through 2020 State RPS RPS-Driven Renewable 30-45 GW(1) of new wind Requirements by Region(2) and solar needed by 2020 120 100…
Further out, demand for renewables will also be driven by the requirement for lower emission rates under the EPA Clean Power Plan EPA Clean Power Plan U.S. CO2 2020-2030 Potential Reduction Targets Renewable Demand 1,800 EPAs…
Energy Resources wind energy development is very well positioned to take advantage of the 2014 extension of PTCs Wind Production Tax Credit Late in December 2014, the Federal Government extended the wind PTC program through the end…
Turbine price reductions and efficiency improvements continue to reduce the average delivered cost of new wind installations Wind Technology Levelized Cost of Net Capacity Factor(1) Electricity from Wind(2) 60% 70 55% 60 50% 55-…
Solar installation costs are declining and efficiency is improving; the gap on price competitiveness versus conventional generation continues to narrow Solar Technology PV Module Efficiency Levelized Cost of and Delivered Cost(1)…
For solar development, the amount of demand and geographic diversity has exceeded our expectations Utility Scale Solar Demand and Geography Regional expansion of opportunity set is increasing Solar has moved from a 2008-2012…
Energy Resources renewable program is well positioned for continued success Renewables Development Expectations Additional Additional Current 2015-2016 2017-2018 2015 2018 Backlog(1) Forecast Forecast U.S. Wind 980 1,100 1,300 750…
4.8-5.0 B of capital investments are supported by our backlog of projects with signed PPAs Renewable Development Backlog(1) Wind Location MW Solar Location MW Golden Hills CA 83 McCoy Solar CA 250 Golden West CO 249 Blythe CA 110…
An additional 5.1-5.3 B of capital expenditures are captured in our near-term pipeline Renewable Development Near-Term Pipeline Wind Region MW Solar Region MW Project B Central 250 Project O Central 140 Project C Central 200…
At roughly 10,000 MW, our longer term U.S. wind and solar development pipelines are capable of supporting growth through the end of this decade Renewable Development Longer-Term Pipeline Wind: 350-400 MW Wind: 2,500-2,700 MW…
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…
INVESTOR CONFERENCE 2015 NextEra Energy Resources Business and Financial Outlook John Ketchum Senior Vice President - Finance March 11, 2015