Fourth Quarter and Full-Year 2013 Earnings Release

NextEra Energy reports fourth quarter and full-year 2013 earnings
January 28, 2014
Q4 2013 Earnings ReleaseQ4 2013 Earnings Presentation Q4 and Full-Year 2013 RemarksFull Year 2013 Financial Statements
Webcast Presentation      
  • NextEra Energy generated strong results in the full year 2013
  • Florida Power & Light Company continued to invest in the business to improve the value delivered to customers
  • NextEra Energy Resources added 374 MW of new wind capacity and 280 MW of new solar capacity to its portfolio in 2013

JUNO BEACH, Fla. - NextEra Energy, Inc. (NYSE: NEE) today reported 2013 fourth-quarter net income on a GAAP basis of $327 million, or $0.75 per share, compared with $429 million, or $1.02 per share, in the fourth quarter of 2012. On an adjusted basis, NextEra Energy's earnings were $414 million, or $0.95 per share, compared with $433 million, or $1.03 per share, in the fourth quarter of 2012.

For the full year 2013, NextEra Energy reported net income on a GAAP basis of $1.9 billion, or $4.47 per share, compared with $1.9 billion, or $4.56 per share, in 2012. On an adjusted basis, NextEra Energy's 2013 earnings were $2.1 billion, or $4.97 per share, for the full year, compared with $1.9 billion, or $4.57 per share, in 2012.

Adjusted earnings exclude the mark-to-market effects of non-qualifying hedges, as well as the net effect of other than temporary impairments (OTTI) on certain investments and operating results from the Spain solar project. For 2013, adjusted earnings expectations also exclude the gain on the sale of the Maine hydropower assets, a charge associated with the decision to sell merchant fossil assets in Maine, and charges associated with an impairment on the Spain solar project. All of these items relate primarily to the business of NextEra Energy Resources, LLC and its affiliated entities.

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 an input in determining 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 solid results to finish the year as we executed well on the goals we set for the company," said NextEra Energy Chairman and Chief Executive Officer James L. Robo. "At FPL, we completed the modernization of our Cape Canaveral facility, accelerated our storm hardening program and strengthened our electric grid, all of which help to provide our customers with greater efficiency and reliability, as well as the lowest typical residential bill in the state. At NextEra Energy Resources, we executed well on our solar construction program and signed more than 1,100 MW of wind power purchase agreements. Across the enterprise, we delivered great operational performance as well as terrific cost performance as we completed a very strong year."

Florida Power & Light Company
NextEra Energy's principal rate-regulated utility subsidiary, Florida Power & Light Company, reported fourth-quarter net income of $248 million, or $0.57 per share, compared with $256 million, or $0.61 per share, for the prior-year quarter. For the full year, net income was $1.35 billion, or $3.16 per share, compared with $1.24 billion, or $2.96 per share, in 2012.

For the fourth quarter of 2013, FPL's earnings decreased over the prior-year comparable quarter primarily as a result of transition costs associated with Project Momentum, the corporate-wide initiative to improve productivity. Underlying usage per customer increased 1.0 percent compared to the fourth quarter of 2012.

The main driver of FPL's full-year 2013 earnings growth was the investments in clean and efficient power generation and other infrastructure projects that helped improve the company's customer value proposition. Operationally, FPL's fossil fleet set a new record for its fuel efficiency in 2013, bringing its system-wide fuel usage rate down to 7,657 British thermal units (BTU) per kilowatt hour, which is 23 percent better than the average fuel usage rate for the fossil industry. Since 2001, FPL's fuel efficiency for its fossil fleet has improved by 21 percent, resulting in more than half a billion dollars in savings for customers in 2013. In addition, FPL continues to rank in the top quartile nationally for reliability, and the company's five-year average for the System Average Interruption Duration Index (SAIDI) was the lowest among all Florida investor-owned utilities for the period 2008 to 2012.

FPL averaged approximately 80,000 more customers during the fourth quarter of 2013 than in the comparable prior-year quarter, the largest increase in customer count since late 2007. The 12-month average of low-usage accounts fell to 8.2 percent, the lowest level since December 2007, while the number of inactive accounts reached its lowest level since 2005.

These improved customer metrics are consistent with improving Florida economic indicators that the company tracks. According to the Florida Department of Economic Opportunity, the state's seasonally-adjusted unemployment rate in December 2013 was 6.2 percent, down 1.7 percentage points from a year earlier, and down 5.2 percentage points from the state's highest-ever rate of 11.4 percent in March 2010. The number of jobs in Florida was up by 192,900 positions compared to a year earlier, and December 2013 was the 41st consecutive month with positive job growth in Florida following more than three years of job losses.

Over the course of 2013, FPL invested approximately $2.9 billion to continue to strengthen a customer value proposition that includes high reliability, award-winning customer service, a clean emissions profile and the lowest typical residential customer bill in Florida. FPL's modernized Cape Canaveral facility entered service in April 2013 ahead of schedule and approximately $100 million under budget. The modernization of the Riviera Beach facility is on budget and slightly ahead of schedule with an in-service date expected in the second quarter of 2014. The Port Everglades plant was decommissioned in July 2013, and construction of a modernized facility is under way with an expected in-service date by mid-2016. During the operating lifetimes of these three new, efficient power plants, the company estimates that customers will save more than $1 billion in fuel and other costs, relative to avoided high-cost generation or purchased power.

Also in 2013, the company successfully completed extended power uprates of its two nuclear facilities in Florida. The largest U.S. nuclear upgrade investment in recent history added more than 500 megawatts (MW) of clean, zero-emission generation to the FPL fleet. Also in 2013, the company continued to improve the electric grid through its Energy Smart Florida program, including completing the installation of approximately 4.5 million smart meters across its service territory.

In the fourth quarter, the Florida Public Service Commission (FPSC) approved FPL's plan to accelerate its existing storm hardening program. The company expects to make incremental investments of approximately $400 million from 2013 through 2016 to continue strengthening its infrastructure against tropical storms and hurricanes.

The FPSC also recently approved FPL's new natural gas transportation capacity contracts with Sabal Trail Transmission and NextEra Energy's wholly owned subsidiary, Florida Southeast Connection. Contingent upon receiving necessary Federal Energy Regulatory Commission approvals, the company expects construction of the proposed interstate pipeline system to begin in 2016 and for operations to commence in mid-2017.

NextEra Energy Resources
NextEra Energy Resources, the competitive energy business of NextEra Energy, reported fourth-quarter net income on a GAAP basis of $85 million, or $0.20 per share, compared with $171 million, or $0.41 per share, in the prior-year quarter. On an adjusted basis, NextEra Energy Resources' earnings were $173 million, or $0.40 per share, compared with $175 million, or $0.42 per share, in the fourth quarter of 2012. For the full-year 2013, NextEra Energy Resources reported net income on a GAAP basis of $556 million, or $1.30 per share, compared to $687 million, or $1.64 per share, in 2012. On an adjusted basis, NextEra Energy Resources' earnings were $780 million, or $1.83 per share, compared with $693 million, or $1.66 per share, for the full-year 2012.

NextEra Energy Resources' contributions to adjusted earnings in the fourth quarter declined by 2 cents from the prior-year comparable quarter, primarily due to higher corporate general and administrative expenses related to growth initiatives, partly offset by greater contributions from new investments.

The main driver of the increase in NextEra Energy Resources' full-year 2013 adjusted earnings over the previous year was from contributions from new investments, which in total added 31 cents. Greater contributions from the gas infrastructure business added 4 cents. Lower contributions from existing investments and from higher corporate general and administrative and other expenses negatively impacted results by 15 cents.

NextEra Energy Resources added approximately 375 MW of new U.S. and Canadian wind capacity to its portfolio in 2013, bringing the total size of the wind portfolio to 10,210 MW. Also in 2013, the business reached wind production levels of nearly 30 million megawatt hours of generation, the highest level in the company's history.

The business expects to add between 2,000 and 2,500 MW of new contracted U.S. wind projects to its portfolio between 2013 and 2015, of which 1,425 MW are contracted or already placed into service. The business expects to add approximately 600 MW of new contracted Canadian wind projects to its portfolio between 2013 and 2015, all of which are contracted or already placed into service.

The business placed into service approximately 280 MW of contracted solar generation at its Desert Sunlight and Genesis facilities in 2013. Development of NextEra Energy Resources' solar backlog remains on track, with approximately 800 MW of contracted solar capacity expected to come online by the end of 2016.

Corporate and Other
In the fourth quarter on a GAAP and adjusted basis, Corporate and Other negatively impacted earnings per share by 2 cents, compared to no impact in the comparable quarter of the prior year.

For the full year, Corporate and Other contributed to earnings per share on a GAAP basis by 1 cent, compared to a negative impact of 4 cents in 2012. On an adjusted basis, Corporate and Other negatively impacted earnings per share by 2 cents, compared to a negative impact of 5 cents in 2012, primarily due to growth in contributions from the regulated transmission business.

Outlook
NextEra Energy expects adjusted earnings per share for 2014 to be in the range of $5.05 to $5.45. The company continues to expect full-year adjusted earnings per share to increase at a compound annual growth rate of 5 percent to 7 percent through 2016, from a 2012 base.

NextEra Energy's adjusted earnings expectations exclude the cumulative effect of adopting new accounting standards, the unrealized mark-to-market effect of non-qualifying hedges, as well as net OTTI losses on securities held in NextEra Energy Resources' nuclear decommissioning funds, none of which can be determined at this time, and operating results from the Spain solar project. In addition, adjusted earnings expectations assume, among other things: normal weather and operating conditions; continued recovery of the national and 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 governmental 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. 28, 2014. The webcast is available on NextEra Energy's website by accessing the following link: www.NextEraEnergy.com/investors. The slides and news 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 consolidated revenues of approximately $15.1 billion, approximately 42,500 megawatts of generating capacity, and approximately 13,900 employees in 26 states and Canada as of year-end 2013. Headquartered in Juno Beach, Fla., NextEra Energy's principal subsidiaries are Florida Power & Light Company, which serves approximately 4.7 million customer accounts in Florida and is one of the largest rate-regulated electric utilities in the United States, 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 generates clean, emissions-free electricity from eight commercial nuclear power units in Florida, New Hampshire, Iowa and Wisconsin. For more information about NextEra Energy companies, visit these websites: www.NextEraEnergy.com, www.FPL.com, www.NextEraEnergyResources.com.

Cautionary Statements and Risk Factors That May Affect Future Results

This news 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. Forward-looking statements in this news release include, among others, statements concerning adjusted earnings per share expectations and future operating performance. In some cases, you can identify the forward-looking statements by words or phrases such as "will," "may 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 NextEra Energy's and FPL's business operations; inability of NextEra Energy and FPL to recover in a timely manner any significant amount of costs, a return on certain assets or an appropriate return on capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise; impact of political, regulatory and economic factors on regulatory decisions important to NextEra Energy and FPL; risks of disallowance of cost recovery by FPL based on a finding of imprudent use of derivative instruments; effect of any reductions to or elimination of governmental incentives that support renewable energy projects of NextEra Energy Resources, LLC and its affiliated entities (NextEra Energy Resources); impact of new or revised laws, regulations or interpretations or other regulatory initiatives on NextEra Energy and FPL; effect on NextEra Energy and FPL of potential regulatory action to broaden the scope of regulation of over-the-counter (OTC) financial derivatives and to apply such regulation to NextEra Energy and FPL; capital expenditures, increased operating costs and various liabilities attributable to environmental laws, regulations and other standards applicable to NextEra Energy and FPL; effects on NextEra Energy and FPL of federal or state laws or regulations mandating new or additional limits on the production of greenhouse gas emissions; exposure of NextEra Energy and FPL to significant and increasing compliance costs and substantial monetary penalties and other sanctions as a result of extensive federal regulation of their operations; effect on NextEra Energy and FPL of changes in tax laws and in judgments and estimates used to determine tax-related asset and liability amounts; impact on NextEra Energy and FPL of adverse results of litigation; effect on NextEra Energy and FPL of failure to proceed with projects under development or inability to complete the construction of (or capital improvements to) electric generation, transmission and distribution facilities, gas infrastructure facilities or other facilities on schedule or within budget; impact on development and operating activities of NextEra Energy and FPL resulting from risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements; risks involved in the operation and maintenance of electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities; effect on NextEra Energy and FPL of a lack of growth or slower growth in the number of customers or in customer usage; impact on NextEra Energy and FPL of severe weather and other weather conditions; risks associated with threats of terrorism and catastrophic events that could result from terrorism, cyber attacks or other attempts to disrupt NextEra Energy's and FPL's business or the businesses of third parties; risk of lack of availability of adequate insurance coverage for protection of NextEra Energy and FPL against significant losses; risk to NextEra Energy Resources of increased operating costs resulting from unfavorable supply costs necessary to provide NextEra Energy Resources' full energy and capacity requirement services; inability or failure by NextEra Energy Resources to hedge effectively its assets or positions against changes in commodity prices, volumes, interest rates, counterparty credit risk or other risk measures; potential volatility of NextEra Energy's results of operations caused by sales of power on the spot market or on a short-term contractual basis; effect of reductions in the liquidity of energy markets on NextEra Energy's ability to manage operational risks; effectiveness of NextEra Energy's and FPL's hedging and trading procedures and associated risk management tools to protect against significant losses; impact of unavailability or disruption of power transmission or commodity transportation facilities on sale and delivery of power or natural gas by FPL and NextEra Energy Resources; exposure of NextEra Energy and FPL to credit and performance risk from customers, hedging counterparties and vendors; risks to NextEra Energy and FPL of failure of counterparties to perform under derivative contracts or of requirement for NextEra Energy and FPL to post margin cash collateral under derivative contracts; failure or breach of NextEra Energy's and FPL's information technology systems; risks to NextEra Energy and FPL's retail businesses of compromise of sensitive customer data; risks to NextEra Energy and FPL of volatility in the market values of derivative instruments and limited liquidity in OTC markets; impact of negative publicity; inability of NextEra Energy and FPL to maintain, negotiate or renegotiate acceptable franchise agreements with municipalities and counties in Florida; increasing costs of health care plans; lack of a qualified workforce or the loss or retirement of key employees; occurrence of work strikes or stoppages and increasing personnel costs; NextEra Energy's ability to successfully identify, complete and integrate acquisitions; environmental, health and financial risks associated with NextEra Energy's and FPL's ownership of nuclear generation facilities; liability of NextEra Energy and FPL for significant retrospective assessments and/or retrospective insurance premiums in the event of an incident at certain nuclear generation facilities; increased operating and capital expenditures at nuclear generation facilities of NextEra Energy or FPL resulting from orders or new regulations of the Nuclear Regulatory Commission; inability to operate any of NextEra Energy Resources' or FPL's owned nuclear generation units through the end of their respective operating licenses; liability of NextEra Energy and FPL for increased nuclear licensing or compliance costs resulting from hazards posed to their owned nuclear generation facilities; risks associated with outages of NextEra Energy's and FPL's owned nuclear units; effect of disruptions, uncertainty or volatility in the credit and capital markets on NextEra Energy's and FPL's ability to fund their liquidity and capital needs and meet their growth objectives; inability of NextEra Energy, FPL and NextEra Energy Capital Holdings, Inc. to maintain their current credit ratings; risk of impairment of NextEra Energy's and FPL's liquidity from inability of creditors to fund their credit commitments or to maintain their current credit ratings; poor market performance and other economic factors that could affect NextEra Energy's defined benefit pension plan's funded status; poor market performance and other risks to the asset values of NextEra Energy's and FPL's nuclear decommissioning funds; changes in market value and other risks to certain of NextEra Energy's investments; effect of inability of NextEra Energy subsidiaries to upstream dividends or repay funds to NextEra Energy or of NextEra Energy's performance under guarantees of subsidiary obligations on NextEra Energy's ability to meet its financial obligations and to pay dividends on its common stock; and effect of disruptions, uncertainty or volatility in the credit and capital markets of the market price of NextEra Energy's common stock. 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, 2012 and other SEC filings, and this news release should be read in conjunction with such SEC filings made through the date of this news release. The forward-looking statements made in this news release are made only as of the date of this news release and NextEra Energy and FPL undertake no obligation to update any forward-looking statements.

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