10-QPeriod: Q1 FY2016

NEXTERA ENERGY INC Quarterly Report for Q1 Ended Mar 31, 2016

Filed April 29, 2016For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy, Inc. (NEE) reported its first-quarter 2016 financial results, showing a slight decrease in net income attributable to NEE to $636 million, or $1.37 per diluted share, compared to $650 million, or $1.45 per diluted share, in the prior year's quarter. This dip was primarily driven by lower results at its competitive energy business, NEER, which were partially offset by stronger performance from its regulated utility, Florida Power & Light (FPL). FPL demonstrated solid growth, with net income increasing to $393 million, supported by ongoing investments in its infrastructure and a higher regulatory return on equity. Conversely, NEER's net income declined, largely due to significant unrealized mark-to-market losses on non-qualifying hedges, a reversal from gains in the previous year, alongside higher interest and administrative expenses. Despite the overall dip in net income, NEE's operating cash flows strengthened significantly, increasing to $1,545 million from $1,181 million in the prior year quarter, indicating robust operational cash generation.

Financial Highlights

43 data points
Beta

Net Income

$653.00M

EPS (Diluted)

$0.35

Total Assets

$84.64B

Cash & Equivalents

$628.00M

Free Cash Flow

$1.54B

Financial Statements
Beta
Operating Expenses$2.60B
Operating Income$1.23B
Net Income$653.00M
EPS (Basic)$0.35
EPS (Diluted)$0.35
Shares Outstanding (Basic)1.84B
Shares Outstanding (Diluted)1.85B

Key Highlights

  • 1Net income attributable to NEE decreased by $14 million to $636 million for the three months ended March 31, 2016, compared to $650 million in the same period of 2015.
  • 2Diluted earnings per share (EPS) attributable to NEE decreased to $1.37 from $1.45.
  • 3Florida Power & Light (FPL) saw its net income increase by $34 million to $393 million, driven by higher earnings from investments in plant in service and regulatory ROE.
  • 4NEER's net income decreased by $56 million to $224 million, primarily due to unrealized mark-to-market losses on non-qualifying hedges and higher interest and administrative expenses.
  • 5Operating cash flows improved substantially, increasing by $364 million to $1,545 million for the first quarter of 2016.
  • 6Capital expenditures increased significantly, with FPL investing $1,195 million and NEER investing $2,641 million, totaling $3,879 million for the quarter, reflecting continued investment in infrastructure and growth projects.

Frequently Asked Questions

Net income attributable to NEE decreased by $14 million to $636 million primarily due to a decline in earnings from its competitive energy business, NEER. NEER experienced significant unrealized mark-to-market losses on non-qualifying hedges, a reversal from the gains seen in the prior year, along with higher interest and administrative expenses. This decrease was partially offset by stronger performance from its regulated utility, Florida Power & Light (FPL).

FPL's net income increased by $34 million to $393 million, driven by higher earnings from its investments in plant in service and other property, which grew its average retail rate base. Additionally, higher Allowance for Funds Used During Construction (AFUDC) - equity and increased cost recovery clause earnings contributed to the improved performance.

In January 2016, NEE discontinued hedge accounting for its interest rate and foreign currency derivative instruments. This change means that all subsequent changes in the fair value of these derivatives, as well as transaction gains or losses on foreign-denominated debt, are recognized directly in interest expense in NEE's income statement. For the three months ended March 31, 2016, this resulted in approximately $83 million of after-tax losses related to interest rate derivative instruments being reflected in NEER's net income, contributing to the decline in that segment's earnings.

NEE significantly increased its capital expenditures in the first quarter of 2016, totaling $3,879 million, a substantial rise from $1,566 million in the prior year period. FPL invested $1,195 million in its operations, primarily in transmission and distribution and generation, while NEER invested $2,641 million in new wind and solar generation projects and natural gas pipelines, reflecting the company's commitment to growth and infrastructure development.