10-QPeriod: Q2 FY2018

NEXTERA ENERGY INC Quarterly Report for Q2 Ended Jun 30, 2018

Filed July 25, 2018For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy Inc. (NEE) reported its second-quarter and first-half 2018 financial results, demonstrating resilience and strategic growth. For the second quarter, net income attributable to NEE was $795 million, or $1.64 per diluted share, largely in line with the prior year's $793 million ($1.68 per diluted share). The first half of 2018 saw a significant increase in net income to $5.223 billion ($10.95 per diluted share), compared to $2.376 billion ($5.05 per diluted share) in the first half of 2017. This substantial year-over-year growth is largely attributable to a significant gain from the deconsolidation of NEP, which contributed $3.9 billion before taxes to other income. The company's primary operating segments, Florida Power & Light Company (FPL) and NextEra Energy Resources (NEER), both contributed positively to the results, with FPL showing steady performance driven by higher retail base revenues and tax benefits, while NEER's performance in the first half was significantly boosted by the NEP deconsolidation gain and favorable tax reform impacts. The company also announced significant planned acquisitions, including Gulf Power Company and Florida City Gas, positioning NEE for further expansion in the Florida energy market.

Financial Highlights

44 data points
Beta

Revenue

$3.90B

Net Income

$781.00M

20.0% Net Margin

EPS (Diluted)

$0.40

Total Assets

$95.49B

Cash & Equivalents

$478.00M

Free Cash Flow

$1.65B

Financial Statements
Beta
Revenue$3.90B
Operating Expenses$2.92B
Operating Income$1.15B
Net Income$781.00M
EPS (Basic)$0.41
EPS (Diluted)$0.40
Shares Outstanding (Basic)1.88B
Shares Outstanding (Diluted)1.90B

Key Highlights

  • 1Net income attributable to NEE for the first six months of 2018 significantly increased to $5.223 billion, up from $2.376 billion in the prior year period, driven largely by a $3.9 billion pre-tax gain from the deconsolidation of NEP.
  • 2Diluted earnings per share for the first six months of 2018 were $10.95, a substantial increase from $5.05 in the same period of 2017.
  • 3Florida Power & Light Company (FPL) reported an increase in net income for both the second quarter and first half of 2018, driven by higher retail base revenues and lower income tax expenses.
  • 4NextEra Energy Resources (NEER) experienced a decrease in net income for the second quarter but a significant increase for the first half of 2018, largely due to the NEP deconsolidation gain and favorable tax reform impacts.
  • 5The company announced in May 2018 agreements to acquire Gulf Power Company for approximately $5.75 billion and Florida City Gas for approximately $530 million, signaling significant strategic expansion in Florida.
  • 6Total assets decreased slightly to $95.49 billion as of June 30, 2018, from $97.83 billion at the end of 2017, mainly due to the deconsolidation of NEP's assets and liabilities.
  • 7The company maintained strong liquidity, with approximately $8.6 billion in net available liquidity at June 30, 2018.

Frequently Asked Questions

The primary driver for the substantial increase in net income for the first half of 2018 was a gain of approximately $3.9 billion (before taxes) recognized from the deconsolidation of NEP (NextEra Energy Partners, LP).

While these acquisitions were announced in May 2018 and are pending regulatory approvals, they represent a significant strategic expansion for NextEra Energy in Florida. The financial impact is not yet reflected in the June 30, 2018 balance sheet, but they signal future growth and market expansion. NEE intends to finance the cash portion of these acquisitions through debt issuance.

Tax reform, which reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018, had a favorable impact. The company revalued its deferred income taxes, reducing liabilities and impacting its effective tax rate. For NEER, tax reform-related impacts contributed favorably to net income, particularly in the first half of 2018.

NextEra Energy Resources (NEER) continues to invest in renewable energy. During the first six months of 2018, NEER placed into service approximately 144 MW of new solar generating capacity and 101 MW of wind repowering generating capacity. The company also has significant capital expenditure plans through 2022 for wind and solar projects outlined in the commitments section.