10-QPeriod: Q1 FY2011

NEXTERA ENERGY INC Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 4, 2011For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy (NEE) reported a decrease in net income for the first quarter of 2011 compared to the same period in 2010. This decline was primarily driven by a significant drop in earnings from NextEra Energy Resources, largely due to unfavorable fluctuations in the unrealized mark-to-market effects of non-qualifying hedges. While Florida Power & Light Company (FPL) showed an increase in net income, primarily due to higher earnings from cost recovery clauses and increased equity AFUDC, the overall company performance was impacted by the weaker results from the competitive energy business. Despite the year-over-year earnings decline, the company maintained a strong liquidity position with approximately $5.8 billion in net available liquidity. Capital expenditures remain robust, particularly in renewable energy projects like wind and solar, indicating a continued commitment to strategic growth initiatives. Investors should note the ongoing impact of derivative instruments on earnings volatility and the potential future regulatory impacts from environmental rules, which could affect future operational costs and capital expenditures.

Financial Highlights

41 data points
Beta

Revenue

$3.13B

Net Income

$268.00M

8.6% Net Margin

EPS (Diluted)

$0.16

Total Assets

$53.26B

Cash & Equivalents

$425.00M

Free Cash Flow

$983.00M

Financial Statements
Beta
Revenue$3.13B
Operating Expenses$2.71B
Operating Income$414.00M
Net Income$268.00M
EPS (Basic)$0.16
EPS (Diluted)$0.16
Shares Outstanding (Basic)1.66B
Shares Outstanding (Diluted)1.67B

Key Highlights

  • 1Net income decreased by $288 million to $268 million for the three months ended March 31, 2011, compared to $556 million in the prior year period, primarily due to lower earnings from NextEra Energy Resources.
  • 2Florida Power & Light Company (FPL) reported an increase in net income to $205 million from $191 million, driven by higher earnings from cost recovery clauses and increased equity AFUDC.
  • 3NextEra Energy Resources' net income decreased significantly to $65 million from $367 million, largely impacted by a $292 million decrease related to changes in unrealized mark-to-market non-qualifying hedge activity.
  • 4The company maintained strong liquidity, with total net available liquidity of approximately $5.8 billion as of March 31, 2011.
  • 5Capital expenditures remain a significant focus, with planned expenditures of approximately $12.0 billion for FPL and $5.3 billion for NextEra Energy Resources from 2011 through 2015.
  • 6The company is actively investing in renewable energy, with plans for substantial additions in wind and solar generation capacity.
  • 7Potential future impacts from new environmental regulations concerning air and water emissions from power plants were highlighted, with the economic and operational effects currently undetermined but potentially material.

Frequently Asked Questions

The primary driver for the decrease in net income was the significant decline in earnings from NextEra Energy Resources. This was largely attributed to unfavorable changes in the unrealized mark-to-market effects of non-qualifying hedges, which resulted in a $292 million decrease in net income for this segment.

FPL's net income increased to $205 million in Q1 2011 from $191 million in Q1 2010. This improvement was primarily due to higher earnings from cost recovery clauses, particularly from additional nuclear capacity, solar, and environmental expenditures, as well as an increased equity component of AFUDC, notably related to West County Energy Center Unit No. 3.

NextEra Energy maintained a strong liquidity position with approximately $5.8 billion in net available liquidity as of March 31, 2011. The company relies on a combination of internally generated funds, short-term and long-term borrowings, and the issuance of debt and equity securities to meet its funding needs, which include working capital and capital expenditures.

The filing highlights potential risks and impacts related to new environmental regulations from the EPA concerning air toxics and clean water intake structures. These proposed rules could require significant additional pollution control equipment or operational changes at various facilities, with economic and operational impacts that are currently undetermined but could be material. Additionally, the company is monitoring potential changes to nuclear facility regulations following events in Japan.