How did FPL's performance contribute to the overall financial results?

FPL's segment showed a modest increase in net income of $6 million for the three months ended June 30, 2008, driven by higher retail customer usage and other revenues, partly offset by increased operating expenses and the absence of certain income tax benefits from the prior year. However, for the six-month period, FPL's net income decreased by $12 million, also influenced by higher expenses and the absence of prior-year tax benefits, despite some positive drivers like customer growth and a base rate increase associated with Turkey Point Unit No. 5.

What are the company's future capital expenditure plans?

NextEra Energy (FPL Group) has substantial capital expenditure plans through 2012. For FPL, planned capital expenditures are estimated at approximately $13.4 billion, focusing on generation, transmission, distribution, and nuclear fuel. FPL Energy plans to invest approximately $3.1 billion, primarily in wind and nuclear projects. These investments are aimed at meeting customer demand, enhancing reliability, and expanding renewable energy capacity.

How is the company managing its commodity price risk?

The company utilizes derivative instruments, such as swaps, options, and forwards, to manage commodity price risk associated with fuel and electricity purchases and sales. For FPL, changes in derivative fair values are typically deferred as regulatory assets or liabilities and passed through to customers via cost recovery clauses. For FPL Energy's non-regulated operations, changes in fair value are often recognized in operating revenues or expenses, unless hedge accounting is applied. The company also employs a Value at Risk (VaR) model to measure market risk in its trading and mark-to-market portfolios.

NEXTERA ENERGY INC 10-Q Quarterly Report Q2 FY2008

Q: What is the primary reason for the decline in net income in the second quarter of 2008?

The primary reason for the decline in net income for the three and six months ended June 30, 2008, compared to the prior year, was a significant decrease in results from FPL Energy. This was largely due to adverse changes in the market value of derivative instruments classified as non-qualifying hedges, leading to substantial unrealized mark-to-market losses. Additionally, increased other-than-temporary impairment losses on securities held in FPL Energy's nuclear decommissioning funds contributed to the decline.

Summary

NextEra Energy Inc. (NEE), operating as FPL Group, Inc. during this period, reported a decrease in net income for the three and six months ended June 30, 2008, compared to the same periods in 2007. This decline was primarily driven by significantly lower results from FPL Energy, attributed to changes in the market value of derivative instruments classified as non-qualifying hedges and increased other-than-temporary impairment losses. While FPL's segment showed a slight increase in net income for the three-month period, it experienced a decrease for the six-month period, influenced by the absence of prior-year tax benefits and increased operating expenses. Despite the net income decline, the company highlighted robust operating cash flows and a strong liquidity position. Significant capital expenditures are planned for infrastructure development and renewable energy projects, particularly in wind energy. The company also provided forward-looking capital expenditure plans through 2012, underscoring its commitment to growth and investment in its business segments.

Financial Highlights

22 data points

Beta

Revenue

$3.58B

EPS (Diluted)

$0.13

Cash & Equivalents

$424.00M

Free Cash Flow

$2.07B

Financial Statements

Beta

Revenue	$3.58B
Operating Expenses	$3.27B
Operating Income	$313.00M
EPS (Basic)	$0.13
EPS (Diluted)	$0.13
Shares Outstanding (Basic)	2K
Shares Outstanding (Diluted)	2K

Key Highlights

1Net income decreased by $196 million for the three months ended June 30, 2008, and by $97 million for the six months ended June 30, 2008, compared to the prior year periods.
2FPL Energy's results were significantly impacted by a $215 million decrease (after-tax) in unrealized mark-to-market gains/losses on non-qualifying hedges for the three-month period and an $81 million decrease for the six-month period.
3FPL's net income increased by $6 million for the three-month period but decreased by $12 million for the six-month period, influenced by rising operating expenses and the absence of prior-year tax benefits.
4The company maintained strong operating cash flows, with net cash provided by operating activities increasing to $2,068 million for the six months ended June 30, 2008, up from $1,850 million in the prior year.
5Total assets grew to $43.75 billion as of June 30, 2008, from $40.12 billion at the end of 2007, indicating continued investment in property, plant, and equipment.
6Planned capital expenditures for the remainder of 2008 through 2012 are substantial, totaling over $16 billion across FPL and FPL Energy, with significant investments in wind and nuclear projects.
7The company maintained a strong liquidity position, with net available liquidity of approximately $6.7 billion at June 30, 2008.

NEXTERA ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2008

Summary

Financial Highlights

Key Highlights

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