What is the reason for the impairment charge on FPL FiberNet's assets?

The impairment charge is due to significant changes in the business climate impacting FPL FiberNet's metropolitan market assets. These changes include customer consolidations, a migration to more efficient networking technology, and reduced future benefits from competitive pricing, all of which negatively affect the value of these assets.

What is the financial impact of this impairment charge?

FPL Group expects to record an impairment charge ranging from approximately $90 million to $105 million, which translates to $55 million to $65 million after tax. This charge is anticipated to reduce the 'Corporate and Other' segment's adjusted EPS by roughly $0.14 to $0.16 per share in the fourth quarter of 2006.

Will this impairment charge lead to any cash outflows for the company?

No, FPL Group does not believe this impairment charge will result in any future cash expenditures. It is an accounting adjustment reflecting a reduction in the carrying value of assets.

What are the updated earnings expectations for FPL Group?

FPL Group announced updated adjusted earnings per share expectations for 2006, projecting a range of $2.90 to $2.95. The company also reaffirmed its previously announced adjusted earnings expectations for 2007 ($3.35 to $3.45) and 2008 ($3.60 to $3.80).

NEE 8-K: Financial Events & Regulation FD

Summary

This 8-K filing from NextEra Energy Inc. (NEE), filed on December 15, 2006, primarily disclosed two key pieces of information. Firstly, an indirect wholly-owned subsidiary, FPL FiberNet, LLC, concluded that an impairment charge related to its metropolitan market assets was necessary due to significant changes in the business climate, including customer consolidations and technological shifts. This is expected to result in an impairment charge of $90 million to $105 million ($55 million to $65 million after tax) in the fourth quarter of 2006. Management does not anticipate this charge to result in future cash expenditures. Secondly, at its 2006 annual shareholder meeting, FPL Group announced updated adjusted earnings per share (EPS) expectations for 2006 and reaffirmed its guidance for 2007 and 2008. The filing provides specific EPS ranges for Florida Power & Light Company, FPL Energy, LLC, and Corporate and Other segments, culminating in overall FPL Group EPS projections. The impairment charge for FPL FiberNet is noted as an impact on the "Corporate and Other" segment's EPS. Investors should note the cautionary statements regarding forward-looking information and the various risk factors that could materially affect future results.

Key Highlights

1FPL FiberNet, an indirect subsidiary, will record an impairment charge of $90-$105 million ($55-$65 million after-tax) for its metro market assets in Q4 2006.
2The impairment is attributed to changes in the business climate, including customer consolidations and shifts in networking technology.
3The impairment charge is not expected to result in future cash expenditures.
4Updated adjusted EPS expectations for FPL Group's 2006 fiscal year were announced.
5Adjusted EPS expectations for 2007 and 2008 were reaffirmed.
6The impairment charge will impact the 'Corporate and Other' segment's EPS by approximately $0.14 to $0.16 per share.
7The filing includes extensive cautionary statements and risk factors that could affect future results.

NEXTERA ENERGY INC 8-K Report, Material Impairment (Dec 15, 2006)

Summary

Key Highlights

Frequently Asked Questions