10-QPeriod: Q2 FY2013

NEXTERA ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2013

Filed July 31, 2013For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy Inc. (NEE) reported its financial results for the second quarter and first six months of 2013, showcasing a mixed performance across its operating segments. For the three months ended June 30, 2013, NEE's net income slightly increased to $610 million ($1.44/share diluted) from $607 million ($1.45/share diluted) in the prior year. However, for the six months ended June 30, 2013, net income decreased to $883 million ($2.08/share diluted) from $1,068 million ($2.57/share diluted) in the same period last year. The company's performance was significantly impacted by a substantial impairment charge of $300 million ($342 million after-tax) related to its Spain solar projects, which heavily influenced the year-to-date results. Florida Power & Light (FPL), the regulated utility segment, demonstrated steady performance with increased net income driven by investments in plant in service. In contrast, NextEra Energy Resources (NEER), the competitive energy business, experienced a decline in earnings, primarily due to the aforementioned impairment and unfavorable mark-to-market derivative impacts, partially offset by contributions from new investments and discontinued operations gains.

Financial Highlights

43 data points
Beta

Revenue

$3.83B

Net Income

$610.00M

15.9% Net Margin

EPS (Diluted)

$0.36

Total Assets

$65.22B

Cash & Equivalents

$411.00M

Free Cash Flow

$1.17B

Financial Statements
Beta
Revenue$3.83B
Operating Expenses$2.85B
Operating Income$981.00M
Net Income$610.00M
EPS (Basic)$0.36
EPS (Diluted)$0.36
Shares Outstanding (Basic)1.69B
Shares Outstanding (Diluted)1.70B

Key Highlights

  • 1For the second quarter of 2013, NextEra Energy reported a slight increase in net income to $610 million, or $1.44 per diluted share, compared to $607 million, or $1.45 per diluted share, in the prior year's quarter.
  • 2First six months of 2013 net income decreased to $883 million ($2.08/share diluted) from $1,068 million ($2.57/share diluted) in the same period of 2012, largely due to a significant $300 million impairment charge.
  • 3A substantial impairment charge of $300 million ($342 million after-tax) was recorded in the first half of 2013 related to NEER's Spain solar projects.
  • 4Florida Power & Light (FPL) saw an increase in net income for both the quarter ($391 million vs. $353 million) and the first six months ($679 million vs. $592 million), driven by increased investments in its rate base.
  • 5NextEra Energy Resources (NEER) experienced a significant decrease in net income for the first six months of 2013 to $189 million from $472 million in 2012, impacted by the Spain solar project impairment and derivative mark-to-market losses.
  • 6The company generated $2.25 billion in net cash from operating activities for the first six months of 2013, an increase from $1.93 billion in the prior year, indicating strong operational cash flow.
  • 7Total assets grew to $65.2 billion at June 30, 2013, from $64.4 billion at December 31, 2012, reflecting continued investment in property, plant, and equipment.

Frequently Asked Questions

The primary driver for the decrease in net income for the first six months of 2013 was a significant impairment charge of $300 million ($342 million after-tax) related to NextEra Energy Resources' (NEER) Spain solar projects. Additionally, unfavorable mark-to-market adjustments on non-qualifying hedges and lower results from NEER's operations contributed to the decline.

Florida Power & Light (FPL), the regulated utility, showed a positive trend with an increase in net income to $391 million, up from $353 million in the prior year's quarter, driven by investments in its rate base. In contrast, NextEra Energy Resources (NEER), the competitive energy business, saw a decrease in net income to $229 million from $251 million, primarily due to mark-to-market losses on derivatives, partially offset by higher results from new investments.

NextEra Energy anticipates continued capital investment through 2016. FPL is identifying potential incremental capital expenditures to improve customer value and shareholder returns. NEER expects to invest in additional U.S. wind projects (up to 1,500 MW) and solar projects (up to 300 MW) and plans to invest approximately $200-$250 million annually in its gas infrastructure business. NextEra Energy Transmission (NEET) is actively competing for new transmission projects across North America.

NextEra Energy and FPL use derivative instruments to manage commodity price, interest rate, and foreign currency exchange rate risks. For regulated operations like FPL, changes in derivative fair values are largely deferred as regulatory assets or liabilities and passed through customer rates. For NEER's competitive business, changes in fair value for certain non-qualifying hedges can impact earnings volatility, while other trading activities are managed to take advantage of market price movements. The company employs robust risk management policies and procedures to monitor and mitigate these exposures.