Fourth Quarter and Full-Year 2011 Earnings Release
|NextEra Energy reports fourth quarter and full-year 2011 earnings|
|January 27, 2012|
|Q4 2011 Earnings Release||Q4 2011 Earnings Presentation||Q4 2011 Remarks||Q4 2011 Financial Tables|
- NextEra Energy generated solid results in the fourth quarter and the full year 2011
- Florida Power & Light Company's earnings growth was driven by increased investments in the business which benefit customers
- NextEra Energy Resources ended the year with a record backlog of contracted renewable projects
JUNO BEACH, Fla. - NextEra Energy, Inc. (NYSE: NEE) today reported 2011 fourth-quarter net income on a GAAP basis of $667 million, or $1.59 per share, compared with $263 million, or $0.63 per share, in the fourth quarter of 2010. On an adjusted basis, NextEra Energy's earnings were $395 million, or $0.93 per share, for the fourth quarter of 2011 compared with $332 million, or $0.80 per share, in the fourth quarter of 2010. Adjusted earnings exclude the mark-to-market effects of non-qualifying hedges and net other than temporary impairments (OTTI) on certain investments, as well as the loss on certain gas-fired generation assets sold in 2011, all of which relate primarily to the business of NextEra Energy Resources, LLC and its affiliated entities ("Energy Resources").
For the full-year 2011, NextEra Energy reported net income on a GAAP basis of $1.92 billion, or $4.59 per share, compared with $1.96 billion, or $4.74 per share, in 2010. On an adjusted basis, NextEra Energy's 2011 earnings were $1.84 billion, or $4.39 per share, for the full year, compared with $1.78 billion, or $4.30 per share, in 2010.
NextEra Energy's management uses adjusted earnings, which is a non-GAAP financial measure, internally for financial planning, for analysis of performance, for reporting of results to the Board of Directors and as input in determining whether performance goals are met for performance-based compensation under the company's employee incentive compensation plans. NextEra Energy also uses earnings expressed in this fashion when communicating its earnings outlook to analysts and investors. NextEra Energy management believes that adjusted earnings provide a more meaningful representation of NextEra Energy's fundamental earnings power. The attachments to this news release include a reconciliation of historical adjusted earnings to net income, which is the most directly comparable GAAP measure.
"NextEra Energy delivered strong performance in the fourth quarter and overall for 2011. At Florida Power & Light, earnings growth was driven by investments in the business, including new efficient power generation, that are helping to provide our customers with the lowest bills in the state and reliability that is among the best in the country. At NextEra Energy Resources, we signed nearly 2,200 megawatts of long-term wind and solar contracts in 2011, our most ever in a single year," said NextEra Energy Chairman and CEO Lew Hay.
Florida Power & Light Company
Fourth-quarter 2011 net income for FPL, NextEra Energy's principal rate-regulated utility subsidiary, was $216 million, or $0.51 per share, compared with $181 million, or $0.43 per share, in the prior-year quarter. For the full year, net income was $1.07 billion, or $2.55 per share, compared with $945 million, or $2.29 per share, in 2010. During 2011, the company deployed more than $3 billion in capital on projects providing significant customer benefits.
For the fourth quarter of 2011, FPL's earnings increased over the prior-year comparable quarter primarily as a result of investments in the business. FPL's fourth-quarter 2011 retail sales of electricity declined by 2.7 percent from the prior-year comparable quarter, due primarily to milder weather. Excluding the impact of weather, underlying usage rose 1.2 percent during the fourth quarter of 2011. FPL had approximately 25,000 more customers than during the prior-year comparable period of 2010.
In the fourth quarter of 2011, the Florida Public Service Commission (PSC) approved a reduction in FPL's fuel charge that, in combination with adjustments to other components of the bill, will produce a net decrease on a typical FPL customer's monthly bill in 2012 of about $2. The PSC also approved FPL's application for $196 million in cost recovery related to uprates underway at the Turkey Point and St. Lucie nuclear facilities as well as the planned construction of Turkey Point Units 6 and 7.
The main drivers of FPL's full-year 2011 earnings growth were the investments in clean and efficient power generation. For the full year, weather normalized sales were slightly positive and underlying usage was roughly flat compared to 2010.
Operationally, FPL's fossil fuel fleet set a new record for its fuel efficiency in 2011, bringing its systemwide heat rate down to 7,803 British thermal units (BTU) per kilowatt hour. The average heat rate for the industry was 10,045 BTUs per kilowatt hour for 2010, the most recent year for which data are available. Since 2001, FPL's heat rate has improved by 19 percent, resulting in more than $5.5 billion in savings for customers, including more than $650 million in 2011, as a result of increased fuel efficiency. FPL's service reliability, as measured by the System Average Interruption Duration Index, was in the top quartile of utilities nationwide in 2011. FPL's O&M expenses for all of 2011 were 1.64 cents per retail kilowatt hour sales, compared with the latest available industry average of 2.28 cents per retail kilowatt hour sales.
Earlier this month, FPL notified the PSC that it expects to ask for an increase, effective in 2013, that is currently estimated at $6.80 a month, or about 23 cents a day, on the base portion of a typical residential bill to maintain its superior performance for customers. Because of projected fuel savings resulting from investments in more efficient power generation, as well as lower fuel prices and other adjustments, the net increase that a typical residential customer would pay is currently estimated at no more than $3 a month, or about 10 cents a day.
Energy Resources, the competitive energy business of NextEra Energy, reported fourth-quarter 2011 net income on a GAAP basis of $402 million, or $0.96 per share, compared with $73 million, or $0.17 per share, in the prior-year quarter. On an adjusted basis, Energy Resources' earnings were $128 million, or $0.30 per share, compared with $143 million, or $0.34 per share, in the fourth quarter of 2010. For the full-year 2011, Energy Resources reported net income on a GAAP basis of $774 million, or $1.85 per share, compared with $980 million, or $2.37 per share, in 2010. On an adjusted basis, Energy Resources' earnings were $679 million, or $1.62 per share, compared with $800 million, or $1.93 per share, for the full-year 2010.
In the fourth quarter of 2011, Energy Resources' earnings were driven primarily by a stronger wind resource from existing wind assets relative to the prior-year comparable quarter, adding approximately 580,000 megawatt hours of generation compared to the prior-year comparable quarter. This was more than offset by the negative impact of an unplanned outage and lower availability at the Seabrook Station nuclear facility.
The main drivers of Energy Resources' full-year 2011 earnings were higher wind generation from existing wind assets due to a wind resource that increased from the previous year to near average levels, as well as greater contributions from the gas infrastructure business. These were more than offset by fewer megawatts of Convertible Investment Tax Credit projects, by extended and unplanned outages as well as lower hedge prices at Seabrook Station, by lower earnings from the customer supply and proprietary trading businesses, by higher interest expense due to growth in the business, and by asset impairment charges recognized in the second quarter. Operationally, the company's non-nuclear power-generating facilities performed exceptionally well, with one of the lowest forced-outage rates the company has ever recorded.
The company also made progress during 2011 in signing power purchase agreements for the output of its wind fleet. The company entered into long-term contracts for more than 1,600 megawatts of wind power during the year with expected in-service dates through 2014. The company ended the year as the largest owner of wind generation in North America, adding approximately 380 megawatts in the year, and remains on track to add approximately 1,400 to 2,000 megawatts of new wind assets to the portfolio in 2011 and 2012.
On the solar front, the company has 940 megawatts of already-contracted solar projects expected to enter service from 2011 to 2016, including the company's 50 percent portion of the recently announced Desert Sunlight project and the recently announced McCoy photovoltaic project in California. Including all of the planned solar projects that are already under long-term contract, Energy Resources plans to invest between $2.1 billion and $2.3 billion in 2011 and 2012 and between $1.3 billion and $1.5 billion in 2013 and 2014 in solar development projects. The backlog of contracted solar opportunities is expected to begin contributing meaningfully to cash flow and earnings in 2013.
Corporate and Other
Corporate and Other's fourth-quarter 2011 contribution to earnings per share on a GAAP basis was $0.12, compared with $0.03 per share in the comparable quarter of the prior year. For the full year, Corporate and Other contributed $0.19 per share in 2011, compared with $0.08 per share in 2010.
For the full-year 2011 on an adjusted basis, Corporate and Other contributed $0.22 per share, compared with a contribution of $0.08 per share for the prior year. Corporate and Other's adjusted earnings growth was driven primarily by certain consolidated income tax adjustments.
For 2012, NextEra Energy currently expects full-year adjusted earnings per share to be in the range of $4.35 to $4.65. It also continues to expect that adjusted earnings per share will grow at an overall average rate of 5 percent to 7 percent through 2014, from a 2011 base, which equates to a 2014 adjusted earnings per share range of $5.05 to $5.65.
NextEra Energy's adjusted earnings exclude the cumulative effect of adopting new accounting standards, the unrealized mark-to-market effect of non-qualifying hedges and net other than temporary impairment losses on securities held in NextEra Energy Resources' nuclear decommissioning funds, none of which can be determined at this time, and the loss on the five gas-fired generation assets sold during 2011. In addition, NextEra Energy's adjusted earnings expectations assume, among other things: normal weather and operating conditions; no further significant decline in the national or the Florida economy; supportive commodity markets; public policy support for wind and solar development and construction; market demand and transmission expansion to support wind and solar development; access to capital at reasonable cost and terms; no acquisitions or divestitures; no adverse litigation decisions; and no changes to federal or state tax policy or incentives. Please see the accompanying cautionary statements for a list of the risk factors that may affect future results.
As previously announced, NextEra Energy's fourth quarter and full-year earnings conference call is scheduled for 9 a.m. ET on Jan. 27, 2012. The webcast is available on NextEra Energy's website by accessing the following link, www.NextEraEnergy.com/investors. The slides and earnings release accompanying the presentation may be downloaded at www.NextEraEnergy.com/investors beginning at 7:30 a.m. ET today. For those unable to listen to the live webcast, a replay will be available for 90 days by accessing the same link as listed above.
This news release should be read in conjunction with the attached unaudited financial information.
NextEra Energy, Inc.
NextEra Energy, Inc. (NYSE: NEE) is a leading clean energy company with 2011 revenues of more than $15.3 billion, more than 41,000 megawatts of generating capacity, and approximately 15,000 employees in 24 states and Canada. Headquartered in Juno Beach, Fla., NextEra Energy's principal subsidiaries are Florida Power & Light Company, which serves approximately 4.6 million customer accounts in Florida and is one of the largest rate-regulated electric utilities in the country, and NextEra Energy Resources, LLC, which together with its affiliated entities is the largest generator in North America of renewable energy from the wind and sun. Through its subsidiaries, NextEra Energy collectively operates the third largest U.S. nuclear power generation fleet. For more information about NextEra Energy companies, visit these websites: www.NextEraEnergy.com, www.FPL.com, www.NextEraEnergyResources.com.
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra Energy, Inc. (NextEra Energy) and Florida Power & Light Company (FPL) regarding future operating results and other future events, many of which, by their nature, are inherently uncertain and outside of NextEra Energy's and FPL's control. In some cases, you can identify the forward-looking statements by words or phrases such as "will," "will likely result," "expect," "anticipate," "believe," "intend," "plan," "seek," "aim," "potential," "projection," "forecast," "predict," "goals," "target," "outlook," "should," "would" or similar words or expressions. You should not place undue reliance on these forward-looking statements, which are not a guarantee of future performance. The future results of NextEra Energy and FPL are subject to risks and uncertainties that could cause their actual results to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: effects of extensive regulation of business operations; inability to recover, in a timely manner, certain costs, a return on certain assets, or an appropriate return on capital from customers through regulated rates and cost recovery clauses; significant compliance costs and exposure to substantial monetary penalties and other sanctions as a result of federal regulatory compliance and proceedings; impact of increased governmental and regulatory scrutiny or negative publicity; risks associated with legislative and regulatory initiatives; capital expenditures, increased cost of operations and exposure to liabilities attributable to environmental laws and regulations; potential effects of federal or state laws or regulations mandating new or additional limits on the production of GHG emissions; risks of fines, closure of owned nuclear generation facilities and increased costs and capital expenditures resulting from the construction, operation and maintenance of nuclear generation facilities; failure to proceed with projects under development or inability to complete the construction of (or capital improvements to) generation, transmission, distribution or other facilities on schedule or within budget; risks involved in the operation and maintenance of power generation, transmission and distribution facilities; operating risks associated with the natural gas and oil storage and pipeline infrastructure of NextEra Energy and FPL and the use of such fuels in their generation facilities; development and operating risks affecting NextEra Energy's competitive energy business; dependence of NextEra Energy's competitive energy business on continued public policy support and government support for renewable energy (particularly wind and solar projects); credit and performance risk from customers, counterparties and vendors; risks of slower customer growth and customer usage; risks associated with severe weather and other weather conditions; effects of disruptions, uncertainty or volatility in the credit and capital markets on the ability of NextEra Energy and FPL to fund their liquidity and capital needs and to meet their growth objectives; financial and operating risks associated with the inability of NextEra Energy, FPL and NextEra Energy Capital Holdings, Inc. to maintain their current credit ratings and with the inability of their credit providers to maintain their current credit ratings or to fund their credit commitments; risks in the use of derivative contracts by NextEra Energy and FPL to manage their commodity and financial market risks, and the impact of any regulation of such derivative instruments traded in the OTC markets; effect of increased competition for acquisitions on NextEra Energy's ability successfully to identify, complete and integrate acquired businesses; inability of subsidiaries to upstream dividends or repay funds or of NextEra Energy to perform under guarantees of subsidiary obligations; effects of changes in tax laws and in judgments and estimates used to determine tax-related asset and liability amounts; risk of compromise of sensitive customer data; impact of any failure in the operational systems or infrastructure of NextEra Energy or FPL or of third parties; operating and financial effects of terrorist acts and threats and catastrophic events; availability of adequate insurance coverage for protection against significant losses; service and productivity impacts of the lack of a qualified work force, work strikes and stoppages, and increasing personnel costs; investment performance of NextEra Energy's and FPL's nuclear decommissioning trust funds and defined benefit pension plan; increasing costs associated with health care plans; and changes in market value and other risks associated with certain of NextEra Energy's and FPL's investments. NextEra Energy and FPL discuss these and other risks and uncertainties in their annual report on Form 10-K for the year ended December 31, 2010 and other SEC filings, and this press release should be read in conjunction with such SEC filings made through the date of this press release. The forward-looking statements made in this press release are made only as of the date of this press release and NextEra Energy and FPL undertake no obligation to update any forward-looking statements.
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