10-QPeriod: Q3 FY2016

NEXTERA ENERGY INC Quarterly Report for Q3 Ended Sep 30, 2016

Filed November 1, 2016For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy, Inc. (NEE) reported its third-quarter 2016 financial results, showing a decrease in net income attributable to NEE for both the three and nine-month periods compared to the prior year. This decline was primarily driven by lower results at NEER (its competitive energy business) and Corporate and Other, partially offset by higher results at FPL (its rate-regulated electric utility subsidiary). Key operational highlights include continued investments in plant in service by FPL, leading to higher earnings. NEER's performance was impacted by lower net unrealized gains from non-qualifying hedge activities and changes in earnings from its gas infrastructure and existing assets. The company is actively pursuing significant strategic transactions, including the proposed acquisition of Oncor Electric Delivery Company LLC, which, if completed, would significantly expand its operational footprint in Texas. Additionally, NEE announced the proposed sale of its FiberNet business. Investors should note the ongoing strategic repositioning, with the sale of FiberNet and the significant proposed acquisition of Oncor. While FPL's regulated operations provide a stable earnings base, NEER's performance is subject to market volatility and hedging activities. The company's liquidity remains strong, supported by substantial credit facilities.

Financial Highlights

43 data points
Beta

Net Income

$753.00M

EPS (Diluted)

$0.41

Total Assets

$87.86B

Cash & Equivalents

$681.00M

Free Cash Flow

$2.02B

Financial Statements
Beta
Operating Expenses$3.53B
Operating Income$1.28B
Net Income$753.00M
EPS (Basic)$0.41
EPS (Diluted)$0.41
Shares Outstanding (Basic)1.85B
Shares Outstanding (Diluted)1.86B

Key Highlights

  • 1Net income attributable to NEE decreased by $126 million for the three months ended September 30, 2016, and by $299 million for the nine months ended September 30, 2016, compared to the prior year periods.
  • 2FPL's net income increased by $26 million and $73 million for the three and nine-month periods, respectively, driven by higher earnings from investments in its rate base.
  • 3NEER's net income decreased due to lower net unrealized gains from non-qualifying hedge activities and changes in earnings from gas infrastructure and existing assets.
  • 4NEE is pursuing the acquisition of 100% of Oncor Electric Delivery Company LLC through multiple agreements, a transaction expected to close in the first half of 2017.
  • 5NEE announced the proposed sale of its FiberNet business for $1.5 billion, expected to close in the first half of 2017.
  • 6The company's total liquidity remained strong, with approximately $9.1 billion available at September 30, 2016.

Frequently Asked Questions

The decrease in net income attributable to NEE was primarily driven by lower results from NEER (competitive energy business) and Corporate and Other, partially offset by higher results at FPL (rate-regulated electric utility).

NextEra Energy is actively pursuing the acquisition of Oncor Electric Delivery Company LLC, which would represent a significant expansion. The company also announced the proposed sale of its FiberNet business and has completed the sale of its Texas natural gas generation facilities.

FPL's net income increased due to higher earnings from investments in its rate base, reflecting continued capital expenditures in plant in service and other property. FPL also filed for a new base rate increase aimed at providing further revenue growth.

NEER's results were significantly impacted by changes in the unrealized mark-to-market gains and losses from non-qualifying hedge activities. In the nine-month period, NEER experienced net unrealized losses, contrasting with gains in the prior year, which contributed to the decrease in net income.