10-QPeriod: Q1 FY2014

NEXTERA ENERGY INC Quarterly Report for Q1 Ended Mar 31, 2014

Filed May 2, 2014For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy Inc. (NEE) reported strong financial performance for the first quarter of 2014, with net income increasing significantly to $430 million compared to $272 million in the prior year period. This growth was primarily driven by the performance of its regulated utility subsidiary, Florida Power & Light Company (FPL), which saw a substantial increase in net income due to higher earnings from increased investments in plant in service and a favorable regulatory return on equity. NEER, the competitive energy business, also contributed positively, with net income turning around from a loss in the prior year to a profit, largely due to the absence of significant impairment charges related to its Spain solar projects in the prior year, alongside increased generation from existing assets and new investments. The company's overall financial health appears robust, supported by consistent operational performance across its segments. NEE continues to invest heavily in its infrastructure, with significant capital expenditure plans for both FPL and NEER, focusing on generation, transmission, and distribution improvements, as well as renewable energy projects. The company also maintains strong liquidity, with substantial available credit facilities, positioning it well to fund its ongoing growth initiatives and operational needs.

Financial Highlights

42 data points
Beta

Net Income

$430.00M

EPS (Diluted)

$0.24

Total Assets

$70.33B

Cash & Equivalents

$488.00M

Free Cash Flow

$1.02B

Financial Statements
Beta
Operating Expenses$2.94B
Operating Income$738.00M
Net Income$430.00M
EPS (Basic)$0.25
EPS (Diluted)$0.24
Shares Outstanding (Basic)1.73B
Shares Outstanding (Diluted)1.75B

Key Highlights

  • 1Net income increased by 58% to $430 million for Q1 2014, compared to $272 million for Q1 2013.
  • 2Earnings per share (diluted) rose to $0.98 from $0.64 in the prior year period.
  • 3Florida Power & Light Company (FPL) demonstrated robust performance, with net income up to $347 million from $288 million, driven by investment in rate base and a higher regulatory return on equity.
  • 4NEER, the competitive energy segment, returned to profitability with $86 million in net income, a significant improvement from a $40 million loss in Q1 2013, primarily due to the absence of large impairment charges.
  • 5Total capital expenditures for the quarter were $1.87 billion, reflecting continued investment in generation, transmission, distribution, and renewable energy projects.
  • 6The company maintained strong liquidity, with total net available liquidity of approximately $5.5 billion at the end of the quarter.

Frequently Asked Questions

The significant increase in net income was primarily driven by strong performance at Florida Power & Light Company (FPL), which benefited from increased investments in its rate base and a higher regulatory return on equity. Additionally, NEER, the competitive energy segment, showed a substantial improvement from a net loss in the prior year to a net profit, largely due to the absence of significant impairment charges related to its Spain solar projects that were recorded in the first quarter of 2013. Favorable wind generation and new renewable energy investments also contributed to NEER's improved results.

NEER's financial performance improved dramatically, with net income turning positive at $86 million in Q1 2014, compared to a net loss of $40 million in Q1 2013. This turnaround was primarily due to the absence of a $342 million after-tax impairment charge on Spain solar projects recorded in the prior year. Furthermore, NEER benefited from increased wind generation due to better wind resources, contributions from new renewable energy investments, and improved performance from existing assets. These positive factors were partly offset by lower results from customer supply and trading businesses and higher unrealized mark-to-market losses on non-qualifying hedges.

NextEra Energy has substantial capital expenditure plans, with estimated expenditures of approximately $10.8 billion for FPL and $5.8 billion for NEER over the next few years (through 2018). These investments are focused on generation, transmission, distribution, and renewable energy projects. The company anticipates funding these requirements through a combination of operating cash flows, short-term and long-term borrowings, and the issuance of debt and equity securities. NEE, FPL, and NEECH rely on access to credit and capital markets for liquidity and financing.

While the report mentions various legal and regulatory proceedings, the company believes that the ultimate resolution of these matters, individually or collectively, will not have a material adverse effect on its financial statements. Key areas mentioned include environmental regulations (Clean Air Act, Clean Water Act), a legal proceeding related to Adelphia Communications shares, and ongoing matters concerning nuclear waste fees and air pollution rules. The company is actively defending against these claims.