10-QPeriod: Q3 FY2017

NEXTERA ENERGY INC Quarterly Report for Q3 Ended Sep 30, 2017

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

Summary

NextEra Energy, Inc. (NEE) reported solid financial results for the quarter ended September 30, 2017, demonstrating continued growth and operational strength. The company's net income attributable to NEE increased to $847 million, or $1.79 per diluted share, compared to $753 million, or $1.62 per diluted share, in the prior year's third quarter. This growth was primarily driven by strong performance at Florida Power & Light Company (FPL), which benefited from investments in its rate base, and contributions from its competitive energy business, NextEra Energy Resources (NEER). For the nine-month period, net income attributable to NEE significantly increased to $3.22 billion ($6.83 per diluted share) from $1.95 billion ($4.19 per diluted share) in the same period last year. This substantial increase reflects both ongoing operational improvements and the impact of significant one-time items, such as the gain from the sale of its fiber-optic telecommunications business. The company continues to invest heavily in infrastructure and renewable energy projects, with substantial capital expenditure plans for both FPL and NEER, positioning it for sustained future growth.

Financial Highlights

43 data points
Beta

Net Income

$846.00M

EPS (Diluted)

$0.45

Total Assets

$96.78B

Cash & Equivalents

$1.38B

Free Cash Flow

$2.08B

Financial Statements
Beta
Operating Expenses$3.46B
Operating Income$1.35B
Net Income$846.00M
EPS (Basic)$0.45
EPS (Diluted)$0.45
Shares Outstanding (Basic)1.88B
Shares Outstanding (Diluted)1.89B

Key Highlights

  • 1Net income attributable to NEE increased by 12.5% to $847 million for the three months ended September 30, 2017, compared to $753 million in the prior year period.
  • 2Diluted earnings per share increased to $1.79 from $1.62 for the same period.
  • 3For the nine months ended September 30, 2017, net income attributable to NEE surged to $3.22 billion, a 65% increase from $1.95 billion in the prior year.
  • 4FPL demonstrated robust performance, with net income increasing year-over-year, driven by investments in its rate base and a regulated return on equity.
  • 5NEER's results were influenced by a mix of new investments, operational performance, and non-qualifying hedge activities, with significant swings noted between periods.
  • 6The company reported substantial capital expenditures for both FPL and NEER, indicating ongoing investment in infrastructure and renewable energy projects.
  • 7The company realized a significant gain from the sale of its fiber-optic telecommunications business, contributing to the strong nine-month results.

Frequently Asked Questions

The increase in net income for the third quarter of 2017 was primarily driven by strong performance at Florida Power & Light Company (FPL), which benefited from continued investments in its rate base and an 11.50% regulatory Return on Equity (ROE). Contributions from NextEra Energy Resources (NEER), alongside favorable results from Corporate and Other, also contributed to the overall increase, although lower results at NEER in the current quarter compared to the prior year period partially offset these gains.

The sale of the fiber-optic telecommunications business in January 2017 resulted in a significant after-tax gain of approximately $685 million recorded in the third quarter of 2017. This gain substantially boosted the 'Corporate and Other' segment's results and contributed significantly to the overall increase in net income attributable to NEE for the nine-month period.

NextEra Energy has substantial capital expenditure plans. For FPL, estimated capital expenditures through 2021 are approximately $19.6 billion, focusing on generation, transmission, and distribution. NEER plans to invest approximately $6.0 billion through 2021 in wind, solar, natural gas pipelines, and other projects. These investments are crucial for meeting customer demand, modernizing infrastructure, and expanding renewable energy generation.

NEE utilizes derivative instruments for risk management and optimization. Changes in the fair value of 'non-qualifying hedges' (economic hedges not meeting hedge accounting criteria) can cause earnings volatility because their economic offsets may not be marked to market. For the three months ended September 30, 2017, these activities resulted in a net loss impacting earnings, whereas the prior year period saw gains. Management views 'adjusted earnings,' which exclude these impacts, as a more meaningful measure of ongoing operational performance.