10-QPeriod: Q1 FY2009

NEXTERA ENERGY INC Quarterly Report for Q1 Ended Mar 31, 2009

Filed May 6, 2009For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy Inc. (NEE) reported a strong first quarter in 2009, with net income increasing to $364 million, or $0.90 per share, a significant rise from $249 million, or $0.62 per share, in the same period last year. This growth was driven by robust performance from both its regulated utility, Florida Power & Light (FPL), and its competitive energy business, NextEra Energy Resources. FPL saw improved net income due to a settlement agreement with the U.S. Government regarding spent nuclear fuel, lower operating and maintenance expenses, and increased Allowance for Funds Used During Construction (AFUDC) equity. NextEra Energy Resources also demonstrated substantial growth, boosted by new investments, significant tax benefits from Production Tax Credits (PTCs) and Investment Tax Credits (ITCs), and the positive impact of the settlement agreement. The company also maintained a strong liquidity position, with $5.3 billion in net available liquidity at the end of the quarter, providing ample resources for ongoing capital expenditures and strategic initiatives.

Financial Highlights

23 data points
Beta

Revenue

$3.71B

Net Income

$364.00M

9.8% Net Margin

EPS (Diluted)

$0.23

Cash & Equivalents

$276.00M

Free Cash Flow

$1.04B

Financial Statements
Beta
Revenue$3.71B
Operating Expenses$3.12B
Operating Income$583.00M
Net Income$364.00M
EPS (Basic)$0.23
EPS (Diluted)$0.23
Shares Outstanding (Basic)1.61B
Shares Outstanding (Diluted)1.62B

Key Highlights

  • 1Net income rose significantly to $364 million ($0.90/share) in Q1 2009 from $249 million ($0.62/share) in Q1 2008.
  • 2Florida Power & Light (FPL) reported a net income of $127 million, up from $108 million in the prior year, benefiting from a settlement agreement and cost controls.
  • 3NextEra Energy Resources saw its net income surge to $252 million from $164 million year-over-year, driven by new investments and substantial tax credits.
  • 4The company reported strong liquidity with $5.3 billion in net available liquidity at the end of the quarter.
  • 5Dividends per share increased to $0.4725 from $0.4450 in the prior year, reflecting a positive outlook.
  • 6Capital expenditures for the period were focused on FPL's electric system and NextEra Energy Resources' wind and nuclear projects, indicating ongoing investment in infrastructure and growth assets.
  • 7The company incurred significant derivative instrument positions, with net derivative liabilities totaling $746 million for FPL Group, managed through various hedging strategies and regulatory deferrals.

Frequently Asked Questions

The significant increase in net income was driven by strong performance across both of its main segments. Florida Power & Light (FPL) benefited from a settlement agreement with the U.S. Government, lower operating and maintenance costs, and increased Allowance for Funds Used During Construction (AFUDC) equity. NextEra Energy Resources saw substantial growth due to new investments, beneficial tax credits (PTCs and ITCs), and the impact of the same settlement agreement. Overall, the company reported consolidated net income of $364 million, up from $249 million in the prior year's first quarter.

NextEra Energy maintained a strong liquidity position, reporting $5.3 billion in net available liquidity at the end of the first quarter of 2009. This liquidity is derived from bank revolving credit lines, cash and cash equivalents, and is strategically managed to support ongoing capital expenditures, debt obligations, and general corporate purposes. The company's liquidity appears sufficient to meet its current and anticipated financial needs.

NextEra Energy utilizes derivative instruments primarily to manage commodity price and interest rate risks. For FPL, the regulated utility, most changes in the fair value of these derivatives are deferred as regulatory assets or liabilities and passed through to customers via cost recovery clauses. For NextEra Energy Resources, the competitive energy business, changes in fair value are generally recognized in earnings, impacting revenues or expenses. At March 31, 2009, FPL Group had net derivative liabilities of $746 million, reflecting the complexity of its hedging strategies and energy trading activities.

Yes, investors should be aware of several key matters. FPL filed a petition with the Florida Public Service Commission (FPSC) requesting permanent base rate increases for 2010 and 2011, which could significantly increase annual retail base revenues if approved. Additionally, the company is involved in various legal and regulatory proceedings, including an ongoing FERC investigation related to a 2008 substation fault, which could result in potential violations and penalties. While management believes these proceedings will not have a material adverse effect, they represent potential risks.