2014 asia investor presentation final/media/files/n/nee-ir/... · 2018. 10. 9. · 2014 asia...
TRANSCRIPT
2014 Asia Investor Presentation
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Cautionary Statements And Risk Factors That May Affect Future ResultsAny statements made herein about future operating and/or financial results and/or other future events are forward-lookingstatements under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-lookingstatements may include, for example, statements regarding anticipated future financial and operating performance and results,including estimates for growth. Actual results may differ materially from such forward-looking statements. A discussion of factorsthat could cause actual results or events to vary is contained in the Appendix herein and in our Securities and ExchangeCommission (SEC) filings.
Non-GAAP Financial InformationThis presentation refers to NEE’s adjusted earnings and NEE’s adjusted EBITDA, which are not financial measurements preparedin accordance with GAAP. Definitions of these measures and quantitative reconciliations of these measures to the closest GAAPfinancial measure are included in the attached Appendix. Prospective adjusted earnings and adjusted EBITDA amounts cannot bereconciled to net income because net income includes the mark-to-market effects of non-qualifying hedges, OTTI on certaininvestments and operating results from the solar thermal facilities in Spain, none of which can be determined at this time. Adjustedearnings does not represent a substitute for net income, as prepared in accordance with GAAP.
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• NextEra Energy, Inc. Overview Slide 4
• Florida Power & Light Slide 10
• NextEra Energy Resources Slide 18
• NextEra Energy, Inc. Financial Review Slide 25
• Appendix Slide 33
Table of Contents
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NextEra Energy is well-positioned for future growth
NextEra Energy – Investment Proposition• Above-average and highly visible growth through 2016
– Rate agreement through 2016 provides regulatory certainty at FPL– Strong backlog at Energy Resources with upside potential
• Strong and increasing cash flow from operations– Operating cash flow expected to increase at ~10% CAGR from 2013 to
2016• Moderate risk portfolio
– 84% of adjusted EBITDA coming from regulated and long-term contracted operations by 2016
– Highly hedged against commodity price fluctuations• Underpinned by one of the strongest balance sheets in the
industry• Leading dividend per share growth
– Targeting 55% dividend payout ratio in 2014, implying ~10% dividend per share growth over 2013
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• $39.6 B market capitalization(1)
• 42,576 MW in operation• $69 B in total assets
• One of the largest U.S. electric utilities• 4.7 MM customer accounts• 24,273 MW in operation
NextEra Energy is comprised of two strong businesses supported by a common platform
• U.S. leader in renewable generation• Assets primarily in 24 states and Canada• 18,303 MW in operation
(1) Market capitalization as of January 30, 2014; source: FactSetNote: All other data as of December 31, 2013
Engineering & Construction
Supply Chain
Nuclear Generation
Non-Nuclear Generation
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Our business strategies are straightforward
Virtuous Circle
Customer Satisfaction
ConstructiveRegulatory
Environment
StrongFinancial Position
SuperiorCustomer
ValueDelivery
Florida Power & Light NextEra Energy Resources
• Low Cost
• High Reliability
• Customer Satisfaction
• Competitive Markets
• Diverse Customer Segments
• Low Cost
• Tailored Product Offerings
• Experimentation & Innovation
Competitive Strategy
7
Utility Credit Ratings(3)
NextEra Energy is built on a foundation of operational excellence and financial strength
25
50
75
100
125
150
'06 '07 '08 '09 '10 '11 '12
0%
2%
4%
6%
8%
10%
'06 '07 '08 '09 '10 '11 '12 '13
Fossil Reliability – EFOR(2)
SAIDI: System AverageInterruption Duration Index(1)
Minutes
(1) SAIDI represents the number of minutes the average customer is without power during that time periodSource: FPL as reported to FL PSC; FL Industry Average consists of data from TECO, PEF, and Gulf as reported to FL PSC
(2) Equivalent Forced Outage Rate; NextEra EFOR represents FPL Fossil and NEER TH&S; Industry Source: NERC (Large Fossil Generating Peer Companies).
(3) Source: Edison Electric Institute: S&P Utility Credit Ratings Distribution – Financial Update Q3 2013; may not add to 100% due to rounding
Good
Industry Average
NextEra Energy
GoodFL Industry Average
FPL
NextEra Energy
4%
20%22%
38%
11%
5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
A or higher A- BBB+ BBB BBB- Non-Investment
Grade
8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0
500
1,000
1,500
2,000
2,500
0.0
1.5
3.0
4.5
6.0
7.5
9.0
CO2 Emissions Rates(2)(Lbs/MWh)
NextEra Energy has one of the cleanest emissions profiles among the nation’s top 50 power producers
NextEra Energy 2013 Fuel Mix(1)(MWh)
SO2 Emissions Rates(2)(Lbs/MWh)
NOx Emissions Rates(2)(Lbs/MWh)
NextEra Energy
NextEra Energy
NextEra Energy
(1) As of December 31, 2013; may not add to 100% due to rounding. The environmental attributes of NEER's electric generating facilities have been or likely will be sold or transferred to third parties, who are solely entitled to the reporting rights and ownership of the environmental attributes, such as renewable energy credits, emissions reductions, offsets, allowances and the avoided emission of greenhouse gas pollutants.
(2) Source for emissions rates: MJ Bradley & Associates 2013 report “Benchmarking Air Emissions of the Largest 100 Power Producers in the United States”
Nuclear27%
Wind16%
Solar <1%
Oil & Hydro <1%
Coal 3%
Natural Gas52%
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(1) Source: FactSet and NextEra Energy company filings; S&P EPS is unadjusted and is calculated as aggregate Price divided by the aggregated PE ratio of the constituents December 31, 2002 to December 31, 2012.
(2) See Appendix slide 48 for reconciliation of adjusted amounts to GAAP amounts (3) Source: FactSet; Dividend per Share 10-year CAGR from December 31, 2003 to December 31, 2013(4) Source: FactSet; Total shareholder return from December 31, 2003 to December 31, 2013
Over an extended period of time, we have been successful in attaining our goal of outperforming our industry
NextEra Energy Performance vs. Industry
10-Year CAGR EndingDecember 31, 2013
S&P 500
S&P 500 UtilitiesIndex
NextEra Energy
Adjusted EPS (2002-2012)(1) 9.0% 0.2% 6.6%(2)
Dividend per Share(3) 7.0% 5.1% 8.2%
Total Shareholder Return(4) 104% 142% 271%
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• One of the largest U.S. electric utilities
• Vertically integrated, retail rate-regulated
• 4.7 MM customer accounts
• 24,273 MW in operation
• $10.4 B in operating revenues
• $36 B in total assets
Florida Power & Light is one of the best utility franchises in the U.S.
Florida Power & Light(1)
(1) All data as of December 31, 2013, except operating revenue which is for the year ended December 31, 2013
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FPL – Base O&M Costs in Real 2012 Dollars(1)
FPL’s O&M costs declined through 2005, but in recent years they have increased
FPL’s goal is to get back to a trend of positive O&M productivity in real terms
3.29
1.45 1.36 1.47
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
1988 2000 2005 2012
¢ perkWh
(1) Cents per kWh expressed in real 2012 dollarsNote: See appendix slide 45 for reconciliation of base O&M cents per kWh to GAAP O&M cents per kWh
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• Moving forward with several initiatives with significant O&M cost savings in the following areas:
– Nuclear operations
– Transmission and distribution
– Customer service
– Fossil generation operations
– Staff functions
FPL Productivity Improvements
Project Momentum has provided a line of sight to achieve our goal of keeping nominal base O&M expenses flat in 2016
Our goal of keeping nominal base O&Mexpenses flat corresponds to ~$1.5 B O&M in 2016
Note: See appendix slide 45 for reconciliation of base O&M cents per kWh to GAAP O&M cents per kWh
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We have made excellent progress on our backlog of major capital projects in 2013
FPL’s Backlog of Major Capital Projects
Modernization Projects Nuclear Uprates• Successfully completed our
extended nuclear power uprate program in April 2013– Added more than 500 MW of
zero emission capacity to our system
St. Lucie Units 1 & 2
Turkey Point Units 3 & 4
– Received FPSC approval for recovery of our extended power uprate investment
• Cape Canaveral completed ahead of schedule and under budget– COD April 2013– ~$970MM capex; $164MM
GBRA• Riviera Beach is slightly ahead
of schedule and on budget– Expected COD Q2-2014– ~$1.3B capex; ~$230-240MM
GBRA• Port Everglades is on time and
on budget– Expected COD mid-2016– ~$1.1B capex; ~$205-215MM
GBRA
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• Incremental storm hardening
• Infrastructure / reliability investment
• Generation upgrades
• Natural gas pipelines(1)
• Vero Beach acquisition and other wholesale opportunities
• Solar investment
In March we laid out $4 B to $5 B in incremental capital expenditures that we continue to develop
Incremental Capital Expenditures Through 2016
These investments must represent win/win for both customers and shareholders
$4 B - $5 B
(1) Sabal Trail Transmission and Florida Southeast Connection were selected to construct and operate the two pipeline projects.
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Natural Gas Pipeline Investments
The Florida Public Service Commission has approved FPL’s natural gas pipeline proposal
• Best economic solution for customers– Sabal Trail Transmission (Spectra Energy):
– ~465 miles to Central Florida Hub
– Estimated capital cost of ~$3 B
– NextEra Energy to invest ~$1 B in Sabal Trail
– Plus: Florida Southeast Connection (NextEra Energy):
– ~126 miles from Central FL Hub to Martin plant
– Estimated capital cost of ~$530 MM
• Received Florida PSC approval for transportation capacity contracts in October 2013
• FERC approval expected in 2015• Expected in-service by mid-2017• Initial quantity of 400k MMBtu/day
increasing to 600k beginning May 2020
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0%
2%
4%
6%
8%
10%
12%
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Florida Retail Sales Index(4)
100105110115120125130135140145
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Florida Unemployment Rate(1)
(1) Source: Bureau of Labor Statistics, through December 2013(2) Three-month moving average; Source: The Census Bureau through November 2013(3) Source: Mortgage Bankers Association & IHS Global Insight, through Q3 2013(4) Sources: Office of Economic and Demographic Research, through October 2013. January 2000 = 100
Florida Economy
Florida’s economy continues to improve
Florida Mortgages 90+ Days Past Due(3)
0%1%2%3%4%5%6%7%8%
2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2
Florida Building Permits(2)
0
2,000
4,000
6,000
8,000
10,000
12,000
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
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A Set of Assets• Largest wind and solar
renewable portfolio in North America
• Over 11,000 MW of stable long-term contracted projects
• Clean emissions profile; diversified by fuel, geography and regional markets
• Strong and profitable nuclear portfolio
• Large base-load position in NEPOOL
• Attractive position in ERCOT
What is Energy Resources?A Set of Skills
• Largest greenfield developer in North America over the last decade
– Over 12,000 MW of greenfield development
• Leader in generation construction over the last decade
• Excellent operator of diverse fuel assets; wind, solar, natural gas and nuclear
• Hedging, optimization and risk management
A Set of Opportunities
+
• Strong backlog of wind and solar projects
• Strong, near-term pipeline of opportunities in wind and solar
• Long-term upside through environmental profile
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Energy Resources’ Adjusted EBITDA(1)
Energy Resources’ risk profile continues to improve as the business mix shifts to more long-term contracted assets
In 2014, we expect 65% of Energy Resources’ adjusted EBITDA to come from long-term contracted assets, up from 49% in 2009
49%59% 64%
40% 26% 22%
11% 15% 14%
0%
25%
50%
75%
100%
2009 2012 2014Long‐Term Contracted Merchant Peripheral Businesses
(1) See appendix slide 49 for definition of Adjusted EBITDA.
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Our generation portfolio consists of over 11,000 MW of contracted assets, which are primarily wind and nuclear
Energy Resources: Contracted Assets(1)
(1) As of December 31, 2013; excludes Spain solar project
Technology MWWind 8,366Nuclear 1,621Solar 472Natural Gas 1,003
Total: 11,462
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1,7452,7192,758
3,1924,016
5,077
6,375
7,5448,2988,569
10,05710,210
Top US Wind Developers/Owners(1)(Megawatts)
Our wind fleet has grown to a size comparable to a top 15 utility
(1) As of December 31, 2013. Includes 367.5 megawatts of wind in Canada.Source: American Wind Energy Association for competitor megawatts
Energy Resources Wind PortfolioCumulative Wind Growth
(Megawatts)
Energy Resources has more than 10,000 MW of installed wind in North America
10,210
5,444
3,6372,623 2,530
0
2,000
4,000
6,000
8,000
10,000
12,000
EnergyResources
Iberdrola Horizon(EDP)
E.ON Invenergy
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We have a strong pipeline of new projects to continue our growth
Wind 2012 Actual 2013 Actual 2014-15 Est.(1)
United States ~1,500 MW ~250 MW ~1,175 MW
Canada ~20 MW ~125 MW ~466 MW
Solar 2012 Actual 2013 Actual 2014-16 Est.(1)
United States 40 MW ~280 MW ~800 MW
Total Wind and Solar Additions 2012 to 2016
We believe our total 2012 to 2016 contracted renewables program could be 5,200 to 5,700 megawatts
(1) As of January 28, 2014 Fourth Quarter Earnings Call
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Energy Resources is the U.S. leader in renewable energy and has solid growth prospects supported by a solid strategic focus
Building the NextEra of clean energy
Diversified portfolio: fuel type and geography
Stable cash flows from mostly contracted assets– Securing long-term power
purchase agreements for new projects
One of the cleanest generators in the nation– North American leader in wind
and solar energy Strong track record of growth
and diverse set of new development opportunities– Wind, solar and gas
infrastructure
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FINANCIAL REVIEW
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Country Breakdown by Funding
U.S. $2.9 billion
NextEra Energy has received approximately $17 billion(1) of credit, including commitments and funded transactions
We have a balanced and well-diversified lending group
(1) ~$17.4 billion of credit includes corporate credit facilities commitments and term loans outstanding as of December 31, 2013 and original balances of project debt funded or committed by banks since 2003.
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(1) Credit metric methodologies are defined by each credit rating agency. NextEra Energy targets based on respective rating agency methodology.
(2) Based on U.S. Utilities Ratings Analysis dated November 30, 2007; intermediate financial risk.(3) Based on Request for Comment – Key Credit Factors For The Global Regulated Utility Industry dated June 26, 2013;
medial volatility, intermediate financial risk.
Moody’s Baa Range NEE Target• CFO Pre-WC/Debt• Debt Capitalization
13% - 22%45% - 55%
20%50%
Fitch A Range NEE Target• FFO/Debt• FFO/Interest
20% - 26%4.5x - 5.6x
21%5.2x
S&P – Old Framework(2) A- Range NEE Target• FFO/Debt• Debt to Total Capitalization
25% - 45%35% - 50%
25%48%
S&P – New Framework(3) A- Range NEE Target• FFO/Debt• Debt/EBITDA
23% - 35%2.5x - 3.5x
25%3.4x
NextEra Energy 2014 Credit Metric Targets(1)
Balance sheet strength and credit play an important role in our strategy
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Market risk will be mitigated by our significantly hedged position over the next several years
Energy ResourcesEquivalent Gross Margin Contracted or Hedged(1)
(1) See appendix slide 49 for definition of Equivalent Gross Margin
96% 94% 91%
82%
100% 99% 100% 100%
0%
20%
40%
60%
80%
100%
2014 2015 2016 2017
Existing New
29
NextEra Energy’s business mix is expected to continue to shift towards more regulated and long-term contracted
Adjusted EBITDA(2) from Regulated and Long-Term
Contracted Operations
(1) Includes FPL and Lone Star regulated earnings(2) See appendix slide 46 for a reconciliation of adjusted EBITDA to Net Income and slide 49 for a definition of Energy
Resources adjusted EBITDA.
Adjusted Earnings fromRegulated Businesses(1)
58%
65%
0%
20%
40%
60%
80%
100%
2011 2016
78%84%
0%
20%
40%
60%
80%
100%
2011 2016
30
$1.20$1.30
$1.42$1.50
$1.64$1.78
$1.89$2.00
$2.20
$2.40
$2.64
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14E
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 PolicyDividend Per Share(1) Growth
2011 to 2014 CAGR: ~10%
• Implemented dividend policy
of 55% target payout ratio in
2014
• Leading dividend per share
growth rate in the industry
through 2014
$2.80 - $3.00 ?
(1) Split-adjusted
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• NextEra Energy:– Project Momentum: Implement the many initiatives to underpin our strong cost
position– Maintain a strong credit position
• FPL:– Maintain leading customer value proposition– Continue execution on large construction projects– Finalize scope for peaking facilities to meet environmental standards– Pursue successful development of Sabal Trail and Florida Southeast
Connection Pipelines
• Energy Resources:– Maintain excellence in day-to-day operations – Continue execution on renewables backlog– Continue to develop a strong backlog of renewables projects into 2015 and
beyond
• NextEra Energy Transmission: – Reliable operations and development of new opportunities
Focus for 2014
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33
Appendix
34
• During the 1990s, a number of states adopted different regulatory models to encourage competition among generators to serve retail customers
• Status of electricity restructuring– 28 states did not restructure and remain regulated
– 7 states suspended deregulation for several reasons including increased cost and environmental and reliability concerns
– 15 states and the District of Columbia have deregulated, and a monopoly system of electric utilities has been replaced with competing sellers(1)
While the majority of states use “cost-of-service” ratemaking, a number of states have gone through deregulation
In the deregulated markets, the price for the generation portion of customers’ bills is set through a competitive process
History of State Deregulation
Source: Edison Electric Institute(1) Source: DOE, Energy Information Administration, status as of January 2013
35
• Federal Energy Regulatory Commission (FERC)– FERC has also encouraged the
formation of regional transmission organizations (RTOs) and Independent System Operators (ISOs) to oversee electricity markets
• Nuclear Regulatory Commission (NRC)
Multiple regulators, at the federal and state level, govern rate setting, transmission, reliability, and environmental protection
Major Regulatory Agencies
• State agencies, typically known as the Public Utility Commission (PUC) or Public Service Commission (PSC)
• Environmental Protection Agency (EPA)
Source: http://www.ferc.gov/industries/electric/indus-act/rto/elec-ovr-rto-map.pdf
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• Consists of five members selected for their knowledge and experience in fields substantially related to the duties and functions of the Commission– Commissioners are appointed by the Governor, and must also be
confirmed by the Florida Senate
• Has the responsibility to set rates that are fair, just and reasonable. It is also required to set rates to allow investors an opportunity to earn a reasonable return on their investment
• Ensure consumers receive electricity in a safe, affordable, and reliable manner
Florida is regulated by a state agency known as the Florida Public Service Commission
Florida Public Service Commission
Source: www.psc.state.fl.us
State-level regulation is all encompassing, balancing the needs of utilities and their shareholders with the needs of consumers
37
• Base rates – designed to recover the costs of constructing, operating, and maintaining a utility system– Generally, most of FPL’s return is earned through base rates
• Cost recovery clauses – recovery of certain costs and provide a return on certain assets– Fuel clause – facilitates the direct pass-through of fuel costs– Capacity clause
Capacity payments to other utilities and generating companies for purchased powerPre-construction costs and carrying charges associated with nuclear uprates and exploring the option of new nuclear generation
– Environmental clause FPL’s three solar generating facilitiesImplementation of energy conservation programs
FPL’s costs are recovered through base rates as well as through clause mechanisms
Cost Recovery Mechanisms
38
United States Electric Power Industry Overview• Electricity demand growth in the United States is projected to
be flat through 2015(1)
– Demand in Florida is projected to grow faster than the national average
• Economics turned upside down from shale gas boom– Merchant power generators continue to experience challenging markets– Several companies have recently exited merchant generation and some
continue to contemplate exiting the business
• Coal generators are experiencing additional pressure from environmental regulations and coal-to-gas switching
• Nuclear economics also pressured by gas and additional costs post-Fukushima
The United States electric power sector faces a number of challenges
(1) U.S. Energy Information Administration Annual Energy Outlook, released December 16, 2013;FRCC Projections 2013 - 2022
39
United States Power MarketsThe United States power industry varies meaningfully by region
Geographically dispersed regulated utilities
Large regulated utilities
Small regulated utilities
Large and small regulated and
merchant utilities
Primarily large regulated and
merchant utilities
Regulated Transmission &
Distribution
Large regulated utilities
Large merchant utilities
40
NextEra Energy U.S. Facility Locations
NextEra Energy’s facilities are located throughout the nation’s power markets
Geographically dispersed regulated utilities
Large regulated utilities
Small regulated utilities
Large and small regulated and
merchant utilities
Primarily large regulated and
merchant utilities
Regulated Transmission &
Distribution
Large regulated utilities
Large merchant utilities
41
Investor Relations Website
The Investor Relations website is a great source for company information
• You can find the IR home page here on the main www.nexteraenergy.com site:
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Investor Relations Website – Home Page
The most current events and newly posted information will appear in the carousel at the top of the IR home page
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You can access all of our quarterly earnings materials and listen to the webcast of the earnings call
Investor Relations Website – Earnings & Supplements
• Non-GAAP Reconciliations are available under “Financial Statements”
• Earnings call webcast and other materials can be accessed through the “Earnings Releases” section
44
Investor Relations Website – Other Resources
You can also download any recent presentation, FPL and NEER asset portfolios, and other information
• Under “Business Updates,” you can find NEE’s full asset portfolio and wind resource performance, among other items
• All of the recent presentations are available under “Events”
45
Reconciliation of Base O&M Cents per kWh to GAAP O&M Cents per kWh
1988 2000 2005 2012($ in millions)Base O&M (A) $1,131 $984 $1,199 $1,500Clause 32 77 99 269Other 0 1 9 4GAAP O&M (B) $1,163 $1,062 $1,307 $1,773
Retail delivered kWhs (in millions) (C) 59,163 88,128 101,980 102,128
Base O&M cents per Retail kWh (A)/(C)*100 = (D) 1.91 1.12 1.18 1.47GAAP O&M cents per Retail kWh (B)/(C)*100 = (E) 1.97 1.21 1.28 1.74
In Real 2012 $:Real Factor (F) 1.7212 1.3007 1.1540 1.0000Base O&M cents per Retail kWh (D)*(F) 3.29 1.45 1.36 1.47GAAP O&M cents per Retail kWh (E)*(F) 3.38 1.57 1.48 1.74
46
Reconciliation of 2011 Adjusted Earnings Before Interest, TaxesDepreciation and Amortization (Adjusted EBITDA) to Net Income
(Full-Year Ended December 31, 2011)
(1) Includes net unrealized mark-to-market (gains) losses associated with non-qualifying hedges, other than temporary impairment losses, and charges resulting from the sale of the five natural gas-fired generating assets in two sale transactions - net and related tax impact.
(2) Primarily consists of the pre-tax effect of production tax credits, investment tax credits and convertible investment tax credits and related amortization, and Energy Resources’ share of revenue and operating expenses of equity method investees in excess of GAAP equity in earnings.
GAAP Adjustments AdjustedNet income $1,923 ($86) (1) $1,837
Add back interest 1,034 0 1,034Add back income taxes 529 (57) (1) 472Add back depreciation & amortization 1,567 0 1,567Other 0 738 (2) 738EBITDA $5,053 $595 $5,648
FPL, Lonestar, Contracted $3,912 77% $517 $4,429 78%All other 1,141 23% 78 1,219 22%
Total $5,053 100% $595 $5,648 100%
47
($ millions) 2011
Net Income $1,923Adjustments, 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 6Loss on sale of natural gas-fired generating assets 98
Adjusted Earnings $1,837
Reconciliation of Adjusted Earnings to Net Income
48
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) losses associated with non-qualifying hedges (0.06) 0.01 0.29 (0.23) 0.21 (0.42) 0.05 (0.43) (0.45) 0.08
Loss (income) from other than temporary impairment losses, net 0.01 0.19 0.03 (0.01) 0.01 (0.07)Cumulative effect of change in accounting principle, net 0.64 0.01Impairment/other charges, net 0.39Merger-related expenses 0.04Loss on sale of natural gas-fired generating assets 0.24
Adjusted Earnings Per Share $2.41 $2.48 $2.49 $2.63 $3.04 $3.49 $3.84 $4.05 $4.30 $4.39 $4.57
Reconciliation of Adjusted Earnings Per Share to Earnings Per ShareNextEra Energy, Inc.
49
Definitional informationNextEra Energy Resources, LLC. Adjusted EBITDA (Slides 20, 29) Adjusted EBITDA includes Energy Resources’ consolidated investments as well as its share of equity method investments. Adjusted EBITDA for each category set forth above is represented by (a) revenue, including a pre-tax allocation of production tax credits, investment tax credits and convertible investment tax credits, less (b) fuel expense less (c) royalty expense, for the gas infrastructure business only, less (d) operating expenses, plus (e) other income, less (f) other deductions. Adjusted EBITDA excludes the impact of non-qualifying hedges, certain differential membership interest costs, and other than temporary impairments.
NextEra Energy Resources, LLC. Adjusted EarningsNextEra Energy Resources’ adjusted earnings exclude the unrealized mark-to-market effect of non-qualifying hedges as well as thenet other than temporary impairment losses on securities held in NextEra Energy Resources’ nuclear decommissioning funds, none of which can be determined at this time, and operating results from the solar thermal facilities in Spain. For 2013, adjusted earnings also exclude the gain on the sale of the Maine hydropower assets, a charge associated with the decision to sell merchant fossil assets in Maine, and charges associated with an impairment on the Spain Solar project.
NextEra Energy Resources, LLC. Equivalent Gross Margin (Slides 28)Projected equivalent gross margin includes Energy Resources’ consolidated investments, excluding Spain, as well as its share of earnings from equity method investments. Projected equivalent gross margin for each category of asset set forth above represents such category’s projected (a) revenue less (b) fuel expense. Projected equivalent gross margin excludes the impact of non-qualifying hedges. Projected revenue as used in the calculations of projected equivalent gross margin represents the sum of projected (a) operating revenue plus a pre-tax allocation of (b) production tax credits, plus (c) investment tax credits and plus (d) earnings impact from convertible investment tax credits. Projected revenue excludes the impact of non-qualifying hedges. Projected equivalent gross margin differs significantly from operating income as calculated in accordance with GAAP. 2014 to 2016 data as of December 6, 2013.
50
Cautionary Statement And Risk Factors That May Affect Future ResultsThis 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, but instead represent the current expectations of NextEra Energy, Inc. (together with its subsidiaries, NextEra Energy) regarding future operating results and other future events, many of which, by their nature, are inherently uncertain and outside of NextEra Energy's control. Forward-looking statements in this presentation include, among others, statements concerning adjusted earnings per share expectations and future operating performance. In some cases, you can identify the forward-looking statements by words or phrases such as “will,” “may result,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “seek,” “aim,” “potential,” “projection,” “forecast,” “predict,” “goals,” “target,” “outlook,” “should,” “would” or similar words or expressions. You should not place undue reliance on these forward-looking statements, which are not a guarantee of future performance. The future results of NextEra Energy are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: effects of extensive regulation of NextEra Energy's business operations; inability of NextEra Energy to recover in a timely manner any significant amount of costs, a return on certain assets or an appropriate return on capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise; impact of political, regulatory and economic factors on regulatory decisions important to NextEra Energy; risks of disallowance of cost recovery based on a finding of imprudent use of derivative instruments; effect of any reductions to or elimination of governmental incentives that support renewable energy projects; impact of new or revised laws, regulations or interpretations or other regulatory initiatives on NextEra Energy; effect on NextEra Energy of potential regulatory action to broaden the scope of regulation of over-the-counter (OTC) financial derivatives and to apply such regulation to NextEra Energy; capital expenditures, increased operating costs and various liabilities attributable to environmental laws, regulations and other standards applicable to NextEra Energy; effects on NextEra Energy of federal or state laws or regulations mandating new or additional limits on the production of greenhouse gas emissions; exposure of NextEra Energy to significant and increasing compliance costs and substantial monetary penalties and other sanctions as a result of extensive federal regulation of its operations; effect on NextEra Energy of changes in tax laws and in judgments and estimates used to determine tax-related asset and liability amounts; impact on NextEra Energy of adverse results of litigation; effect on NextEra Energy of failure to proceed with projects under development or inability to complete the construction of (or capital improvements to) electric generation, transmission and distribution facilities, gas infrastructure facilities or other facilities on schedule or within budget; impact on development and operating activities of NextEra Energy resulting from risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements; risks involved in the operation and maintenance of electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities; effect on NextEra Energy of a lack of growth or slower growth in the number of customers or in customer usage; impact on NextEra Energy of severe weather and other weather conditions; risks associated with threats of terrorism and catastrophic events that could result from terrorism, cyber attacks or other attempts to disrupt NextEra Energy's business or the businesses of third parties; risk of lack of availability of adequate insurance coverage for protection of NextEra Energy against significant losses; risk of increased operating costs resulting from unfavorable supply costs necessary to provide full energy and capacity requirement services; inability or failure to hedge effectively assets or positions against changes in commodity prices, volumes, interest rates, counterparty credit risk or other risk measures; potential volatility of NextEra Energy's results of operations caused by sales of power on the spot market or on a short-term contractual basis; effect of reductions in the liquidity of energy markets on NextEra Energy's ability to manage operational risks; effectiveness of NextEra Energy's hedging and trading procedures and associated risk management tools to protect against significant losses; impact of unavailability or disruption of power transmission or commodity transportation facilities on sale and delivery of power or natural gas; exposure of NextEra Energy to credit and performance risk from customers, hedging counterparties and vendors; risks of failure of counterparties to perform under derivative contracts or of requirement for NextEra Energy to post margin cash collateral under derivative contracts;
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Cautionary Statement And Risk Factors That May Affect Future Results (cont.)failure or breach of NextEra Energy's information technology systems; risks to NextEra Energy's retail businesses of compromise of sensitive customer data; risks to NextEra Energy of volatility in the market values of derivative instruments and limited liquidity in OTC markets; impact of negative publicity; inability to maintain, negotiate or renegotiate acceptable franchise agreements; increasing costs of health care plans; lack of a qualified workforce or the loss or retirement of key employees; occurrence of work strikes or stoppages and increasing personnel costs; NextEra Energy's ability to successfully identify, complete and integrate acquisitions; environmental, health and financial risks associated with ownership of nuclear generation facilities; liability of NextEra Energy for significant retrospective assessments and/or retrospective insurance premiums in the event of an incident at certain nuclear generation facilities; increased operating and capital expenditures at nuclear generation facilities resulting from orders or new regulations of the Nuclear Regulatory Commission; inability to operate any owned nuclear generation units through the end oftheir respective operating licenses; liability for increased nuclear licensing or compliance costs resulting from hazards posed to owned nuclear generation facilities; risks associated with outages of owned nuclear units; effect of disruptions, uncertainty orvolatility in the credit and capital markets on NextEra Energy's ability to fund its liquidity and capital needs and meet its growth objectives; inability to maintain current credit ratings; risk of impairment of liquidity from inability of creditors to fund their credit commitments or to maintain their current credit ratings; poor market performance and other economic factors that could affectNextEra Energy's defined benefit pension plan's funded status; poor market performance and other risks to the asset values ofnuclear decommissioning funds; changes in market value and other risks to certain of NextEra Energy's investments; effect of inability of NextEra Energy subsidiaries to upstream dividends or repay funds to NextEra Energy or of NextEra Energy's performance under guarantees of subsidiary obligations on NextEra Energy's ability to meet its financial obligations and to pay dividends on its common stock; and effect of disruptions, uncertainty or volatility in the credit and capital markets of the market price of NextEra Energy's common stock. NextEra Energy discusses these and other risks and uncertainties in its annual report on Form 10-K for the year ended December 31, 2012 and other SEC filings, and this presentation should be read in conjunction with such SEC filings made through the date of this presentation. The forward-looking statements made in this presentation are made only as of the date of this presentation and NextEra Energy undertakes no obligation to update any forward-looking statements.
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