10-QPeriod: Q2 FY2017

NEXTERA ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2017

Filed July 26, 2017For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy, Inc. (NEE) reported strong financial performance for the six months ended June 30, 2017, with Net Income attributable to NEE increasing significantly to $2.376 billion, up from $1.193 billion in the prior year period. This growth was driven by solid contributions from both its regulated utility, Florida Power & Light Company (FPL), and its competitive energy business, NextEra Energy Resources (NEER). FPL demonstrated robust earnings growth, primarily due to increased investments in its rate base and efficient operations. NEER also showed improved performance, benefiting from new investments and favorable changes in derivative impacts, despite the absence of a significant gain from an asset sale in the prior year. The company maintained a strong liquidity position and continued to execute its capital expenditure plans, focusing on infrastructure improvements and renewable energy generation, positioning it well for future growth. Investors should note the significant increase in earnings per share and the continued expansion of its asset base, particularly in renewable energy.

Financial Highlights

43 data points
Beta

Net Income

$793.00M

EPS (Diluted)

$0.42

Total Assets

$92.89B

Cash & Equivalents

$642.00M

Free Cash Flow

$1.99B

Financial Statements
Beta
Operating Expenses$3.13B
Operating Income$1.28B
Net Income$793.00M
EPS (Basic)$0.42
EPS (Diluted)$0.42
Shares Outstanding (Basic)1.87B
Shares Outstanding (Diluted)1.89B

Key Highlights

  • 1Net income attributable to NEE surged by 99% year-over-year for the six months ended June 30, 2017, reaching $2.376 billion.
  • 2Earnings per share (EPS) on a diluted basis more than doubled, increasing from $2.57 to $5.05 for the same period.
  • 3Florida Power & Light Company (FPL) saw a substantial increase in net income, driven by investments in its rate base and operational efficiency.
  • 4NextEra Energy Resources (NEER) contributed significantly to the earnings growth, with improvements in new investments and beneficial changes in derivative impacts.
  • 5Total assets grew to $92.89 billion at June 30, 2017, up from $89.99 billion at December 31, 2016, reflecting ongoing capital investments.
  • 6The company maintained strong liquidity with approximately $7.9 billion in net available liquidity at June 30, 2017.
  • 7NEE continued to execute its significant capital expenditure program, with approximately $6.9 billion invested in the first six months of 2017, primarily in generation, transmission, distribution, and renewable energy projects.

Frequently Asked Questions

The significant earnings growth was driven by strong performance across both of NextEra Energy's main segments. FPL benefited from investments in its regulated rate base and efficient operations, while NEER saw improved results from new renewable energy investments and a favorable shift in derivative impacts compared to the prior year. Corporate and Other also contributed positively due to lower losses from derivative activities and a significant gain from the sale of the fiber-optic telecommunications business.

NextEra Energy utilizes derivative instruments to manage commodity price, interest rate, and foreign currency risks. For its competitive energy business (NEER), changes in fair value of certain 'non-qualifying hedges' can create earnings volatility. In the first half of 2017, NEER experienced favorable changes in these non-qualifying hedge activities, contributing positively to its results, particularly for commodity and interest rate hedges. For FPL, derivative impacts are largely deferred and passed through to customers via regulatory mechanisms.

NextEra Energy continues to invest heavily in its capital expenditure program. For FPL, this includes modernization of generation facilities and significant investments in transmission and distribution infrastructure. NEER is actively developing and expanding its wind and solar generation capacity, with substantial MW additions planned through 2020. The company also continues to invest in natural gas pipelines. These investments are central to its growth strategy and are supported by strong liquidity and access to capital markets.

Yes, during the first half of 2017, NextEra Energy completed the sale of its fiber-optic telecommunications business for net cash proceeds of approximately $1.1 billion, which resulted in a significant gain recorded in the consolidated statements of income. Additionally, the Oncor acquisition agreement was terminated, and the company is pursuing its contractual rights regarding a termination fee.