10-QPeriod: Q2 FY2010

NEXTERA ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2010

Filed August 6, 2010For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy, Inc. (NEE) reported solid financial results for the second quarter and first half of 2010, demonstrating resilience and growth. Net income increased by 47% for the quarter and 239% for the first half, reaching $417 million and $973 million, respectively. This growth was driven by improved performance across its segments, particularly Florida Power & Light (FPL) benefiting from higher customer usage and base rate increases, and NextEra Energy Resources experiencing gains from new investments and asset sales. The company maintained strong liquidity with approximately $5.2 billion in net available liquidity at the end of the period, underscoring its financial stability and ability to fund future growth and operational needs. Significant capital expenditures are planned for the coming years, focusing on renewable energy projects like wind and solar, as well as investments in nuclear and natural gas generation, and transmission and distribution infrastructure. This strategic investment in growth assets, combined with a robust balance sheet and effective cost management, positions NextEra Energy for continued long-term value creation for its shareholders.

Financial Highlights

40 data points
Beta

Revenue

$3.59B

Net Income

$417.00M

11.6% Net Margin

EPS (Diluted)

$0.25

Total Assets

$51.21B

Cash & Equivalents

$829.00M

Free Cash Flow

$852.00M

Financial Statements
Beta
Revenue$3.59B
Operating Expenses$2.88B
Operating Income$709.00M
Net Income$417.00M
EPS (Basic)$0.26
EPS (Diluted)$0.25
Shares Outstanding (Basic)1.64B
Shares Outstanding (Diluted)1.65B

Key Highlights

  • 1NextEra Energy reported a 47% year-over-year increase in net income for the second quarter of 2010, reaching $417 million ($1.01 diluted EPS), and a significant 239% increase for the first six months to $973 million ($2.37 diluted EPS).
  • 2Both FPL and NextEra Energy Resources segments showed improved performance, contributing to the consolidated earnings growth.
  • 3The company maintained strong liquidity with approximately $5.2 billion in net available liquidity at June 30, 2010.
  • 4Capital expenditures remain a focus, with significant planned investments in wind, solar, nuclear, and natural gas projects through 2014.
  • 5NextEra Energy Resources benefited from new investments, higher wind resources, and gains from asset sales.
  • 6FPL's performance was boosted by increased customer usage, a retail base rate increase, and improved cost recovery clause results.
  • 7The company's effective income tax rate was influenced by wind production tax credits (PTCs) and deferred tax benefits from the American Recovery and Reinvestment Act of 2009.

Frequently Asked Questions

The growth in earnings was driven by several factors. Florida Power & Light (FPL) saw increased customer usage due to weather patterns and benefited from a retail base rate increase and improved cost recovery clause results. NextEra Energy Resources contributed through earnings from new investments, higher wind resources, and gains from asset sales. These positive contributions across segments significantly boosted the consolidated net income.

NextEra Energy maintains a strong liquidity position with approximately $5.2 billion in net available liquidity as of June 30, 2010. The company plans to fund its significant capital expenditures, which are focused on renewable energy and infrastructure development, through a combination of internally generated funds, borrowings, and the issuance of debt and equity securities, aiming to maintain its investment-grade credit rating.

The ARRA provided NextEra Energy with deferred tax benefits associated with convertible Investment Tax Credits (ITCs) for certain wind projects. For the six months ended June 30, 2010, these benefits amounted to $30 million and were a factor in the company's effective income tax rate.

The company is involved in various legal and regulatory proceedings in the ordinary course of business. Notably, FPL is awaiting a ruling on its motion for reconsideration and clarification from the Florida Public Service Commission (FPSC) regarding a recent rate order. While management believes these proceedings will not have a material adverse effect, any adverse outcomes could impact financial statements. Additionally, new rules from the Dodd-Frank Act related to over-the-counter derivatives could potentially impact capital and margin requirements, though the full impact is yet to be determined pending final regulations.