10-QPeriod: Q1 FY2017

NEXTERA ENERGY INC Quarterly Report for Q1 Ended Mar 31, 2017

Filed April 21, 2017For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy, Inc. (NEE) reported a significant increase in net income for the first quarter of 2017 compared to the same period in 2016, driven by strong performance across its principal subsidiaries, Florida Power & Light Company (FPL) and NextEra Energy Resources (NEER). FPL saw improved net income primarily due to substantial investments in its rate base, leading to higher regulated earnings. NEER's performance was boosted by new investments in wind and solar generation, contributions from new projects, and a significant turnaround in unrealized mark-to-market gains from non-qualifying hedges, which contrasted with losses in the prior year. The company also benefited from a substantial gain on the sale of its fiber-optic telecommunications business, which significantly boosted 'Corporate and Other' results. Overall, these factors contributed to a robust financial quarter for NextEra Energy.

Financial Highlights

43 data points
Beta

Net Income

$1.58B

EPS (Diluted)

$0.84

Total Assets

$91.20B

Cash & Equivalents

$600.00M

Free Cash Flow

$1.26B

Financial Statements
Beta
Operating Expenses$1.61B
Operating Income$2.36B
Net Income$1.58B
EPS (Basic)$0.85
EPS (Diluted)$0.84
Shares Outstanding (Basic)1.87B
Shares Outstanding (Diluted)1.88B

Key Highlights

  • 1Net income attributable to NEE more than doubled to $1.583 billion ($3.37 per diluted share) in Q1 2017, up from $653 million ($1.41 per diluted share) in Q1 2016.
  • 2Florida Power & Light (FPL) contributed $445 million to net income, an increase from $393 million in the prior year, driven by investments in its rate base.
  • 3NextEra Energy Resources (NEER) saw its net income increase significantly to $476 million (excluding noncontrolling interests) from $224 million, bolstered by new investments and a positive swing in derivative mark-to-market results.
  • 4The company recorded a substantial gain of $685 million (after-tax) from the sale of its fiber-optic telecommunications business, significantly impacting 'Corporate and Other' results.
  • 5Capital expenditures remained high, totaling $5.18 billion for the quarter, primarily for FPL's generation, transmission, and distribution infrastructure and NEER's renewable energy projects.
  • 6Total assets grew to $91.2 billion from $89.99 billion at the end of 2016, reflecting ongoing investments in property, plant, and equipment.
  • 7The company's liquidity remained strong, with total net available liquidity of approximately $7.67 billion at March 31, 2017.

Frequently Asked Questions

The substantial increase in net income was driven by multiple factors: strong performance from FPL due to investments in its rate base, a significant recovery in NEER's results attributed to new investments and a positive swing in derivative market impacts, and a large one-time gain from the sale of the fiber-optic telecommunications business. These combined effects more than doubled the net income compared to the prior year's first quarter.

The sale of the fiber-optic telecommunications business resulted in a significant after-tax gain of approximately $685 million, which was recorded in the 'Corporate and Other' segment. This one-time gain substantially boosted the company's overall net income for the quarter.

The company continues to make substantial investments in its infrastructure. For the remainder of 2017 through 2021, estimated capital expenditures are projected to be approximately $19.3 billion for FPL and $6.0 billion for NEER, totaling over $25 billion. This indicates a continued focus on growth and infrastructure development across both regulated and competitive businesses.

The report mentions that there have been no material changes to the risk factors previously disclosed in the 2016 Form 10-K. Investors should refer to the 2016 10-K for a comprehensive list of risks. The report also notes the pending business acquisition of Oncor faced a setback with a PUCT vote against the transaction, though NEE intends to seek a rehearing.