Overview of Financial Performance

NextEra Energy (NEE) reported a decrease in net income attributable to the company for the three and six months ended June 30, 2024. The decrease was primarily driven by lower results at NextEra Energy Resources (NEER) and the Corporate and Other segment, partially offset by higher results at Florida Power & Light (FPL).

FPL’s increase in net income was driven by continued investments in plant and other property. NEER’s results decreased due to unfavorable non-qualifying hedge activity and lower earnings from gas infrastructure, partially offset by higher earnings from new investments and existing clean energy projects. Corporate and Other’s results decreased due to unfavorable non-qualifying hedge activity.

NEE’s effective income tax rates were approximately (5)% and 16% for the three months ended June 30, 2024 and 2023, respectively. For the six months, the rates were approximately 5% and 17%, respectively.

FPL: Operational and Financial Highlights

FPL’s average rate base grew by approximately $6.6 billion and $6.7 billion for the three and six months ended June 30, 2024, respectively, reflecting solar generation additions and ongoing transmission and distribution investments.

FPL used reserve amortization to earn its targeted regulatory return on equity (ROE) of approximately 11.80% during the periods presented. In July 2024, FPL reduced the targeted regulatory ROE for the full-year 2024 to 11.40%.

FPL completed a 12-month interim storm restoration charge related to Hurricanes Ian and Nicole in 2022. Operating revenues decreased due to lower storm cost recovery and fuel revenues, partially offset by higher retail base revenues.

Fuel, purchased power and interchange expense decreased due to lower fuel prices. Depreciation and amortization expense decreased, primarily reflecting lower amortization of deferred storm costs, partially offset by increased depreciation from higher plant in service balances.

NEER: Operational and Financial Highlights

NEER’s results decreased for the three and six months ended June 30, 2024, primarily due to unfavorable non-qualifying hedge activity and lower earnings from gas infrastructure, partially offset by higher earnings from new investments and existing clean energy projects.

New investments, such as new wind, solar and battery storage facilities, contributed higher earnings. Existing clean energy projects, including the Seabrook nuclear facility, also saw increased earnings.

Gas infrastructure results decreased due to higher depletion and operating expenses. Other factors, such as interest expense, corporate expenses and changes in unrealized gains/losses, also negatively impacted NEER’s results.

Operating revenues decreased due to the impact of non-qualifying commodity hedges and other net decreases, partially offset by revenues from new investments and higher revenues from existing clean energy assets. Operating expenses increased due to growth across NEER’s businesses and higher depletion and operating expenses in the gas infrastructure segment.

NEER’s effective income tax rate was primarily impacted by the unfavorable non-qualifying hedge activity and the amount of renewable energy tax credits in the periods presented.

Corporate and Other: Operational and Financial Highlights

Corporate and Other’s results decreased for the three months ended June 30, 2024 due to unfavorable non-qualifying hedge activity related to changes in the fair value of interest rate derivative instruments. For the six months, Corporate and Other’s results increased due to more favorable non-qualifying hedge activity.

Liquidity and Capital Resources

NEE and its subsidiaries require funds to support and grow their businesses, which are primarily funded through a combination of cash flows from operations, short- and long-term borrowings, and the issuance of securities.

At June 30, 2024, NEE’s total net available liquidity was approximately $13.6 billion, consisting of syndicated and bilateral revolving credit facilities, letter of credit facilities, cash and cash equivalents, and commercial paper and other short-term borrowings.

NEE subsidiaries issue guarantees, letters of credit and surety bonds to facilitate commercial transactions and financings. These guarantee arrangements totaled approximately $14.0 billion at June 30, 2024, with the majority supporting NEER’s operations.

NEECH, a wholly owned subsidiary of NEE, provides funding for and holds ownership interests in NEE’s operating subsidiaries other than FPL. NEE has fully and unconditionally guaranteed certain payment obligations of NEECH.

Capital Expenditures and Investments

NEE’s primary capital requirements are for expanding and enhancing FPL’s electric system and generation facilities, as well as funding NEER’s investments in independent power and other projects.

For the six months ended June 30, 2024, NEE’s capital expenditures, independent power and other investments, and nuclear fuel purchases totaled $14.6 billion. This included $4.4 billion at FPL and $10.1 billion at NEER.

FPL’s capital expenditures were primarily for generation, transmission and distribution investments. NEER’s capital expenditures were focused on wind, solar, other clean energy, nuclear, natural gas pipelines and rate-regulated transmission projects.

Outlook and Key Risks

NEE’s financial performance and future outlook are subject to various risks and uncertainties, including:

• Commodity price risk: NEE and FPL use derivative instruments to manage the physical and financial risks inherent in the purchase and sale of fuel and electricity. Unfavorable changes in commodity prices could impact their financial results.

• Interest rate risk: NEE and FPL are exposed to risk from changes in interest rates due to their outstanding and expected future debt issuances, investments, and other financial instruments. Increases in interest rates could adversely affect their financial condition.

• Equity price risk: NEE and FPL are exposed to risk from changes in prices of equity securities, particularly in their nuclear decommissioning reserve funds. Declines in equity prices could reduce the fair value of these investments.

• Credit risk: NEE’s energy marketing and trading operations are exposed to the risk of counterparty non-performance. Deterioration in counterparty creditworthiness could impact NEE’s financial results.

Overall, NEE’s financial results for the three and six months ended June 30, 2024 reflected lower performance at NEER and Corporate and Other, partially offset by improved results at FPL. The company continues to invest in its regulated utility and clean energy businesses, while managing various market and financial risks. NEE’s ability to maintain its strong financial position and execute its growth strategy will be crucial in navigating the evolving energy landscape.