10-QPeriod: Q2 FY2012

NEXTERA ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2012

Filed July 27, 2012For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy, Inc. (NEE) reported solid financial results for the second quarter and first six months of 2012, demonstrating growth in net income driven by both its regulated utility (FPL) and competitive energy (NEER) segments. FPL's performance was bolstered by investments in its infrastructure and favorable regulatory treatments, while NEER benefited from new investments and the absence of significant impairment charges from the prior year, despite some headwinds from lower wind resources. Overall, NEE showcased improved profitability, with net income increasing year-over-year for both periods. The company continues to invest heavily in capital expenditures, particularly in new generation facilities, reflecting a commitment to growth and modernization. Liquidity remains strong, supported by substantial available credit facilities and operational cash flows. Investors should note the company's ongoing capital projects, potential impacts from regulatory changes, and the strategic use of derivatives for risk management.

Financial Highlights

43 data points
Beta

Revenue

$3.67B

Net Income

$607.00M

16.6% Net Margin

EPS (Diluted)

$0.36

Total Assets

$60.39B

Cash & Equivalents

$295.00M

Free Cash Flow

$1.09B

Financial Statements
Beta
Revenue$3.67B
Operating Expenses$2.67B
Operating Income$1.00B
Net Income$607.00M
EPS (Basic)$0.36
EPS (Diluted)$0.36
Shares Outstanding (Basic)1.66B
Shares Outstanding (Diluted)1.67B

Key Highlights

  • 1Net income increased year-over-year for both the three months ended June 30, 2012 ($607 million vs. $580 million) and the six months ended June 30, 2012 ($1,068 million vs. $848 million).
  • 2FPL's net income rose by $52 million for the quarter and $86 million for the six months, attributed to investments in plant in service and regulatory adjustments.
  • 3NEER's net income increased by $12 million for the quarter and $168 million for the six months, driven by new investments and the absence of prior-year impairment charges.
  • 4Total capital expenditures and investments for the first six months of 2012 were $4.03 billion, a significant increase from $2.86 billion in the prior year, reflecting strong investment in generation assets.
  • 5The company maintained robust liquidity, with approximately $5.2 billion in net available liquidity at June 30, 2012.
  • 6NEE is actively managing commodity price, interest rate, and currency exchange rate risks through the use of derivative instruments, with detailed disclosures provided in the notes.

Frequently Asked Questions

The increase in net income was primarily driven by improved results at both Florida Power & Light (FPL) and NextEra Energy Resources (NEER). FPL saw gains from investments in its infrastructure and favorable regulatory treatments, while NEER benefited from new investments and the absence of impairment charges recorded in the prior year. These positive contributions were partially offset by lower results in the Corporate and Other segment, mainly due to the absence of a significant state deferred income tax benefit from the prior year.

NextEra Energy funds its substantial capital expenditures through a combination of strong cash flow from operations, short- and long-term borrowings, and the issuance of debt and equity securities. The company also leverages its access to credit and capital markets. For the first six months of 2012, capital expenditures totaled $4.03 billion, funded by operating cash flow, long-term borrowings, and other financing activities.

NEER is a significant generator of renewable energy, particularly from wind and solar. The company's development of U.S. wind facilities is heavily reliant on the federal Production Tax Credit (PTC), which was set to expire at the end of 2012. NEER also benefits from Investment Tax Credits (ITCs) for solar projects. The company notes that the renewal of these incentives or other conducive legislative actions are uncertain and could materially affect its ability to economically develop future renewable energy projects.

NextEra Energy and its subsidiaries are involved in various legal and regulatory proceedings. While management believes they have meritorious defenses and that the ultimate resolution of these matters, individually or collectively, is not expected to have a material adverse effect on the financial statements, the report highlights ongoing legal actions related to environmental regulations (Clean Air Act), a fraudulent transfer claim concerning Adelphia Communications stock, and a contractual dispute in Texas concerning wind energy credits. Any adverse outcome in these or other proceedings could have a material adverse effect.