10-QPeriod: Q3 FY2023

NEXTERA ENERGY INC Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 7, 2023For Securities:NEENEE-PNNEE-PSNEE-PTNEE-PWNEE-PVNEE-PU

Summary

NextEra Energy, Inc. (NEE) reported its third-quarter and nine-month results for 2023, showing mixed performance across its segments. While Florida Power & Light (FPL) demonstrated consistent growth driven by investments in its rate base, the competitive energy segment (NEER) experienced a significant decline in net income for the quarter, largely due to a substantial impairment charge related to its investment in NEP. This impairment, along with unfavorable non-qualifying hedge activity, overshadowed growth from new investments within NEER. Despite the challenges at NEER, the consolidated company saw an increase in net income for the nine-month period compared to the prior year, primarily due to improved results at NEER driven by favorable hedging activities and lower impairment charges, alongside continued growth at FPL. The company maintains a strong liquidity position and is actively investing in growth projects across both regulated and competitive segments. Investors should note the significant impact of the NEP impairment on quarterly results and monitor the performance of NEER's hedging activities and new project pipeline.

Financial Highlights

46 data points
Beta

Revenue

$7.20B

Net Income

$1.22B

16.9% Net Margin

EPS (Diluted)

$0.60

Total Assets

$171.67B

Cash & Equivalents

$1.57B

Free Cash Flow

$3.66B

Financial Statements
Beta
Revenue$7.20B
Operating Expenses$5.34B
Operating Income$1.84B
Net Income$1.22B
EPS (Basic)$0.60
EPS (Diluted)$0.60
Shares Outstanding (Basic)2.03B
Shares Outstanding (Diluted)2.04B

Key Highlights

  • 1For the nine months ended September 30, 2023, Net Income Attributable to NEE significantly increased to $6.1 billion, up from $2.6 billion in the same period of 2022. This growth was driven by higher results at NEER and FPL.
  • 2FPL's net income for the nine months ended September 30, 2023, increased to $3.4 billion from $2.9 billion in the prior year, attributed to increased investments in its rate base and new projects.
  • 3NEER incurred a substantial impairment charge of approximately $1.2 billion ($0.9 billion after-tax) related to its equity method investment in NEP in the third quarter of 2023, negatively impacting quarterly results.
  • 4The company reported strong operating cash flows of $8.4 billion for the nine months ended September 30, 2023, an increase from $7.3 billion in the prior year, supporting significant capital expenditures.
  • 5Capital expenditures for the nine months ended September 30, 2023, totaled $18.9 billion, with a substantial portion allocated to FPL's generation, transmission, and distribution infrastructure, and NEER's renewable energy projects.
  • 6NextEra Energy maintained a robust liquidity position with approximately $12.8 billion in net available liquidity at September 30, 2023, across its FPL and NEECH subsidiaries.

Frequently Asked Questions

NEER recognized an Other-Than-Temporary Impairment (OTTI) charge of approximately $1.2 billion ($0.9 billion after-tax) on its equity method investment in NEP. This impairment was recognized in the third quarter of 2023 due to a significant decline in NEP's common unit trading price following an announcement regarding its distribution growth rate expectations.

For the three months ended September 30, 2023, NEER's net income attributable to NEE decreased significantly, primarily due to the NEP impairment and unfavorable non-qualifying hedge activity. However, for the nine months ended September 30, 2023, NEER's results increased substantially year-over-year. This was driven by favorable non-qualifying hedge activity compared to the prior year, lower impairment charges (specifically the absence of the Mountain Valley Pipeline impairment recorded in 2022), and higher earnings from new investments and trading activities.

NextEra Energy has significant capital expenditure plans, with an estimated $35.9 billion for FPL and $16.6 billion for NEER planned for the remainder of 2023 through 2027. These investments are focused on generation, transmission, distribution, and renewable energy projects, including wind, solar, and battery storage, as well as transmission infrastructure.

FPL is managing fuel costs through various adjustments to its levelized fuel charges to customers, as approved by the Florida Public Service Commission (FPSC). For instance, in 2023, FPL received approval to recover its 2022 fuel under-recovery of approximately $2.1 billion and implemented several mid-course corrections to reduce fuel charges due to declining natural gas prices. These costs and recoveries are generally passed through to customers via the fuel clause, subject to FPSC review.