NextEra Energy, Inc. (NEE)

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NextEra Energy (NEE)

Q1 2013 Earnings Call

April 30, 2013 9:00 am ET

Executives

Julie Holmes

Moray P. Dewhurst - Vice Chairman, Chief Financial Officer and Executive Vice President - Finance

James L. Robo - Chief Executive Officer, President, Chief Operating Officer, Director and Member of Executive Committee

Armando Pimentel - Chief Executive Officer and President

Analysts

Dan Eggers - Crédit Suisse AG, Research Division

Paul T. Ridzon - KeyBanc Capital Markets Inc., Research Division

Steven Fleishman

Michael J. Lapides - Goldman Sachs Group Inc., Research Division

Paul Patterson - Glenrock Associates LLC

Stephen Byrd - Morgan Stanley, Research Division

Greg Gordon - ISI Group Inc., Research Division

Jonathan P. Arnold - Deutsche Bank AG, Research Division

Julien Dumoulin-Smith - UBS Investment Bank, Research Division

Hugh Wynne - Sanford C. Bernstein & Co., LLC., Research Division

Ashar Khan

Presentation

Operator

Good day, everyone, and welcome to the NextEra Energy First Quarter 2013 Earnings Conference Call. Today's conference is being recorded. At this time, for opening remarks, I would like to turn the call over to Ms. Julie Holmes, Director of Investor Relations. Please go ahead.

Julie Holmes

Thank you, Leslie. Good morning, everyone, and welcome to our First Quarter 2013 Earnings Conference Call. With me this morning are Jim Robo, President and Chief Executive Officer of NextEra Energy; Moray Dewhurst, Vice Chairman and Chief Financial Officer of NextEra Energy; Armando Pimentel, President and Chief Executive Officer of NextEra Energy Resources; and Eric Silagy, President of Florida Power & Light Company.

Moray will provide an overview of our results, following which, our executive team will be available to answer your questions. We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from our forward-looking statements if any of our key assumptions are incorrect or because of other factors discussed in today's earnings news release, in the comments made during this conference call, in the Risk Factors section of the accompanying presentation or in our latest reports and filings with the Securities and Exchange Commission, each of which can be found in the Investor Relations section of our website, nexteraenergy.com. We do not undertake any duty to update any forward-looking statements.

Please also note that today's presentation includes references to adjusted earnings and adjusted EBITDA, which are non-GAAP measures -- financial measures. You should refer to the information contained in the slides accompanying this presentation for definitional information and reconciliations of the non-GAAP measure to the closest GAAP financial measure. With that, I will turn the call over to Moray.

Moray P. Dewhurst

Thank you, Julie, and good morning, everyone. NextEra Energy delivered strong results during the first quarter of 2013, and both Florida Power & Light and Energy Resources are executing well on the objectives we've discussed with you last quarter and during our investor conference.

At FPL, we maintained a regulatory ROE of 11%, while we continued to invest heavily in the business in ways that enhance what we believe is already the best customer value proposition in the state. Average regulatory capital employed grew roughly 14% over the same quarter last year and was the main driver of our net income growth of about 20%.

I am pleased to report that 3 of FPL's major capital projects are now complete. The successful repowering of Turkey Point Unit 4 earlier this month marked the completion of our extended nuclear power uprate program. We also finished installing 4.5 million smart meters across our service territory to serve our customers better.

Finally, our first modernization project at Cape Canaveral entered service last week, more than a month earlier than originally expected. And our Riviera Beach and Port Everglades modernizations remain on track.

At Energy Resources, adjusted earnings were down slightly compared to the prior year comparable quarter, primarily from lower wind generation. This quarter's adjusted results excludes 3 unusual items: the gain on the sale of our Maine hydro assets, a charge associated with our decision to sell our merchant fossil assets in Maine and charges associated with an impairment on our Spain solar project. I will discuss each of these items in more detail later in the call.

Our renewables backlog remains on track, and we continue to make good progress on our incremental growth opportunities. Since our investor conference in March, we signed long-term power purchase agreements for an incremental 150 megawatts of new U.S. wind projects and 40 megawatts of new solar projects.

On the transmission front, we successfully energized our Lone Star Transmission line in Texas on time and under budget. We continue to pursue a number of other transmission opportunities in North America, as we discussed at our investor conference in March.

Looking beyond this quarter, we are focused on driving long-term growth across our primary businesses that is profitable and creates value. Central to this is a continued search for ways to improve our productivity and relative cost position sustainably.

As we mentioned during our recent investor conference, we have initiated a comprehensive company-wide internal review to identify opportunities to continue to improve our businesses through revenue enhancement and O&M savings. Even though our overall relative cost position is excellent, we believe we have room for further improvement. We are fairly early in our review process but we are pleased with our progress, and we will provide updates on this initiative throughout the year.

I want to take a brief moment to elaborate on the growth plan we laid out for you at our conference. If we simply complete the projects that were in our backlog in March, which are outlined on the left side of the accompanying slide, we believe we can grow adjusted EPS at a compound annual growth rate of roughly 5% through 2016 off a 2012 base.

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