10-QPeriod: Q2 FY2016

NEXTERA ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2016

Filed July 28, 2016For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy, Inc. (NEE) reported mixed financial results for the six months ended June 30, 2016, with a decrease in net income attributable to NEE compared to the same period in the prior year. This decline was primarily driven by lower results at its competitive energy business, NEER, and Corporate and Other segments, partly offset by higher results at its rate-regulated utility, FPL. While FPL demonstrated steady performance with increased net income driven by investments in infrastructure and a favorable regulatory environment, NEER's performance was impacted by significant unrealized mark-to-market losses on non-qualifying hedges, especially related to interest rate derivatives following the discontinuation of hedge accounting. Despite these challenges, NEE continues to invest heavily in capital expenditures for both its regulated utility and competitive energy businesses, signaling a commitment to future growth.

Financial Highlights

43 data points
Beta

Net Income

$540.00M

EPS (Diluted)

$0.29

Total Assets

$85.42B

Cash & Equivalents

$730.00M

Free Cash Flow

$1.73B

Financial Statements
Beta
Operating Expenses$2.65B
Operating Income$1.17B
Net Income$540.00M
EPS (Basic)$0.29
EPS (Diluted)$0.29
Shares Outstanding (Basic)1.85B
Shares Outstanding (Diluted)1.86B

Key Highlights

  • 1Net income attributable to NEE decreased by $173 million for the six months ended June 30, 2016, compared to the prior year period, primarily due to lower performance in NEER and Corporate and Other segments.
  • 2Florida Power & Light Company (FPL), NEE's rate-regulated utility, saw an increase in net income by $47 million for the six months ended June 30, 2016, driven by investments in plant in service and other property.
  • 3NEER's net income decreased significantly due to $368 million in after-tax unrealized mark-to-market losses from non-qualifying hedge activity, largely related to interest rate derivative instruments after discontinuing hedge accounting.
  • 4Capital expenditures remain robust, with total capital expenditures, independent power and other investments, and nuclear fuel purchases amounting to $6.1 billion for the six months ended June 30, 2016, up from $3.8 billion in the prior year.
  • 5NEE recorded a gain of $106 million after tax from the sale of Texas natural gas generation facilities in the first half of 2016.
  • 6The company's total net available liquidity was approximately $6.5 billion at June 30, 2016, indicating sufficient financial flexibility.

Frequently Asked Questions

The primary reason for the decrease in net income attributable to NEE was lower performance in the NEER (competitive energy business) and Corporate and Other segments. NEER's results were significantly impacted by unrealized mark-to-market losses on non-qualifying hedges, particularly interest rate derivatives, following the discontinuation of hedge accounting.

FPL showed a positive performance, with net income increasing by $47 million for the six months ended June 30, 2016. This growth was driven by continued investments in its electric system and generation facilities, which expanded its rate base and generated higher earnings.

NextEra Energy continues to make significant investments in its businesses. Total capital expenditures, independent power and other investments, and nuclear fuel purchases were $6.1 billion for the first six months of 2016, indicating a strong commitment to growth and infrastructure development in both its regulated utility (FPL) and competitive energy (NEER) segments.

The sale of these facilities in April 2016 resulted in a significant after-tax gain of $106 million for NextEra Energy in the first half of 2016. While this provided a boost to earnings, it also contributed to lower revenues from existing assets in NEER's portfolio.