10-QPeriod: Q3 FY2008

NEXTERA ENERGY INC Quarterly Report for Q3 Ended Sep 30, 2008

Filed October 31, 2008For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy Inc. (NEE), formerly FPL Group, Inc., reported a significant increase in net income for the third quarter of 2008, reaching $774 million compared to $533 million in the same period of the previous year. This growth was largely driven by strong performance in its FPL Energy segment, which benefited from changes in the market price of derivative instruments classified as non-qualifying hedges, contributing substantial unrealized mark-to-market gains. While the regulated utility segment (FPL) saw a slight decrease in net income due to lower customer usage and higher depreciation, the overall financial results demonstrate resilience and growth. The company also highlighted its continued capital investments in new generation and infrastructure, alongside a robust liquidity position, despite challenging credit market conditions.

Financial Highlights

22 data points
Beta

Revenue

$5.39B

EPS (Diluted)

$0.48

Cash & Equivalents

$1.59B

Free Cash Flow

$291.00M

Financial Statements
Beta
Revenue$5.39B
Operating Expenses$4.07B
Operating Income$1.32B
EPS (Basic)$0.48
EPS (Diluted)$0.48
Shares Outstanding (Basic)1.60B
Shares Outstanding (Diluted)1.61B

Key Highlights

  • 1Net income increased by 45% to $774 million ($1.92 per diluted share) for the third quarter of 2008, compared to $533 million ($1.33 per diluted share) in the third quarter of 2007.
  • 2FPL Energy's segment performance significantly improved, driven by substantial unrealized mark-to-market gains on non-qualifying hedges and contributions from new investments.
  • 3FPL, the regulated utility segment, experienced a modest decline in net income primarily due to lower retail customer usage and increased depreciation.
  • 4Operating revenues for the consolidated entity grew by 17.7% year-over-year to $5.39 billion for the third quarter.
  • 5The company maintained a strong liquidity position with approximately $4.9 billion in net available liquidity at September 30, 2008.
  • 6Planned capital expenditures through 2012 remain substantial, with significant investments earmarked for new generation facilities (wind, nuclear, gas) and transmission/distribution infrastructure.
  • 7The company reported continued access to credit markets, though with an awareness of increased volatility and potentially higher financing costs.

Frequently Asked Questions

The substantial increase in net income for FPL Group in the third quarter of 2008 was primarily driven by its FPL Energy segment. This segment recognized significant unrealized mark-to-market gains on derivative instruments classified as non-qualifying hedges, which more than offset declines in other areas and contributed to a 45% year-over-year rise in consolidated net income.

FPL, the regulated utility segment, saw a slight decrease in net income to $314 million from $326 million in the prior year's third quarter. This was mainly due to lower retail customer usage and higher depreciation expenses, although this was partially offset by lower operations and maintenance expenses and certain tax benefits.

Despite the unprecedented volatility and disruption in the global and domestic credit and capital markets in late 2008, NextEra Energy (FPL Group) maintained a strong liquidity position of approximately $4.9 billion. The company reported continued access to commercial paper and short-term credit markets, though with an expectation of shorter maturities and potentially higher rates. They have also built short-term investment balances in secure instruments as a precaution.

Yes, NextEra Energy has substantial planned capital expenditures through 2012, focusing on growth in renewable energy (wind and solar) and modernizing its generation and transmission infrastructure. Key projects include new natural gas-fired combined-cycle units, modernization of existing power plants, and expansion of wind generation capacity, subject to continued public policy support and financing availability.