For the full-year 2009, FPL Group reported net income on a GAAP basis of $1.62 billion, or $3.97 per share, compared with $1.64 billion, or $4.07 per share, in 2008. On an adjusted basis, FPL Group’s 2009 earnings were $1.65 billion, or $4.05 per share, for the full year, compared with $1.55 billion, or $3.84 per share, in 2008.
FPL Group’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 targets are met for performance-based compensation under the company’s employee incentive compensation plans. FPL Group also uses earnings expressed in this fashion when communicating its earnings outlook to analysts and investors. FPL Group management believes that adjusted earnings provide a more meaningful representation of FPL Group’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.
“Despite some significant challenges, FPL Group’s adjusted earnings per share grew by more than 5 percent in 2009. At NextEra Energy Resources, the addition of nearly 1,200 megawatts of wind generation assets led the way to adjusted earnings per share growth of approximately 6 percent in 2009 compared with 2008. At Florida Power & Light, we continued to provide customers with the lowest typical monthly bill in the state and excellent reliability; financial performance was helped by favorable weather. Looking ahead, I remain convinced that FPL Group’s commitment to being a clean energy leader is the right strategy at the right time and will serve our customers and investors well for many years to come,” said FPL Group Chairman and CEO Lew Hay.
Florida Power & Light Company
Reflecting the favorable impact of weather, fourth-quarter 2009 net income for Florida Power & Light Company, FPL Group’s rate-regulated utility subsidiary, was $186 million, or $0.45 per share, compared with $151 million, or $0.38 per share, in the prior-year quarter. For the full year, net income was $831 million, or $2.04 per share, compared with $789 million, or $1.96 per share, in 2008.
Retail sales of electricity increased 7.7 percent for the fourth quarter of 2009 compared with the prior-year quarter due to unseasonably warm weather. For the full-year 2009, retail sales of electricity were flat compared to the prior year despite significantly favorable weather that, on its own, added 14 cents per share to earnings compared with 2008. FPL’s average number of customer accounts for both the fourth-quarter and full-year 2009 were essentially unchanged compared with the prior-year periods.
In October, with President Barack Obama in attendance, Florida Power & Light commissioned the DeSoto Next Generation Solar Energy Center, the largest solar photovoltaic power plant in the United States. During the year, construction also began on FPL’s Martin and Space Coast Next Generation Solar Energy Centers, which are slated to open this year. FPL will recover the cost of these investments, totaling 110 megawatts, under a Florida statute enacted to encourage renewable energy projects.
During 2009, FPL also completed construction of units 1 and 2 at the company’s West County Energy Center, twin 1,220-megawatt natural gas combined-cycle generating units in Palm Beach County. In total, FPL invested approximately $1.2 billion in new generation in 2009. These investments will increase the efficiency of FPL’s generation fleet, provide savings to customers through fuel-cost reductions over the life of the projects, and reduce emissions.
Overall, FPL’s fossil fuel fleet reached a record level of efficiency in 2009. FPL’s investments since 2002 in cleaner, more efficient technology avoided approximately 4.9 million tons of carbon dioxide emissions in 2009 while saving customers an estimated $440 million in fuel costs. Increased fuel efficiency will contribute to a reduction in customers’ bills in 2010.
During 2009, FPL’s rate proposal was heard by the Florida Public Service Commission (PSC). A partial decision on the company’s proposal was issued by the PSC on Jan. 13, 2010. The PSC granted FPL a 10 percent regulatory midpoint return on equity, a 59 percent regulatory equity ratio, and an annualized $75 million base rate increase. FPL is continuing to assess what changes it will need to make as a result of the outcome of the rate case.
NextEra Energy Resources
NextEra Energy Resources, the competitive energy subsidiary of FPL Group, reported fourth-quarter 2009 net income on a GAAP basis of $178 million, or $0.43 per share, compared with $265 million, or $0.66 per share, in the prior-year quarter. On an adjusted basis, NextEra Energy Resources’ earnings were $152 million, or $0.37 per share, compared with $218 million, or $0.55 per share, in the fourth quarter of 2008.
For the full-year 2009, NextEra Energy Resources reported net income on a GAAP basis of $849 million, or $2.08 per share, compared with $915 million, or $2.27 per share, in 2008. On an adjusted basis, NextEra Energy Resources’ earnings were $882 million, or $2.16 per share, compared with $821 million, or $2.04 per share, for the full-year 2008.
NextEra Energy Resources had a challenging quarter but a strong year overall. Its fourth-quarter 2009 performance was impacted by the extension of a planned outage at the Seabrook Station nuclear plant, a poor wind resource across its fleet of wind turbines, and unfavorable market conditions in the Texas region. The company believes that the El Niño weather pattern currently being experienced in North America explains some of the poor wind power resource experienced in the fourth quarter of 2009.
For the full-year 2009, growth in adjusted earnings per share of approximately 6 percent was driven largely by new wind energy projects, including the effects of taking the convertible investment tax credit on wind projects totaling 815 megawatts, and favorable performance by NextEra Energy Resources’ energy marketing and trading business and its Texas retail energy business. This was partially offset by unfavorable market conditions in Texas and a poor wind resource.
In 2009, NextEra Energy Resources added approximately 1,170 megawatts of wind energy capacity in North America. NextEra Energy Resources’ 2009 wind program included 985 megawatts of newly built projects in Colorado, Illinois, Iowa, North Dakota, Oklahoma and Oregon, and the purchase from Babcock & Brown of 185 megawatts of operating wind projects in South Dakota, Texas and Wisconsin. In all, NextEra Energy Resources now owns 7,540 megawatts of wind capacity in 17 states and Canada, maintaining its position as North America’s wind energy leader. To date, NextEra Energy Resources has invested approximately $11 billion in its wind business.
NextEra Energy Resources has acquired three operating wind projects with a combined capacity of 184.5MW from Babcock & Brown. The first project is the 79.5 MW Majestic wind energy center located in Carson County, Texas, northeast of Amarillo. The Majestic project is comprised of 54 GE 1.5 MW turbines.
The second project is the 54MW Butler Ridge wind energy center located in Dodge County, Wisconsin, northwest of Milwaukee. The Butler Ridge project is comprised of 36 GE 1.5MW wind turbines. The third project is the 51MW Wessington Springs wind energy center located in Jerauld County, South Dakota, south of Wessington Springs. The Wessington Springs project is comprised of 34 GE 1.5 MW wind turbines.
Corporate and Other
Corporate and Other negatively impacted FPL Group’s fourth-quarter 2009 net income by $0.03 per share, compared with a loss of $0.03 per share in the prior-year quarter. For the full-year 2009, Corporate and Other negatively impacted net income by $0.15 per share, compared with a loss of $0.16 per share for the prior year. As in most recent years, the primary component was interest expense.
For 2010, FPL Group currently expects full-year adjusted earnings per share to be in the range of $4.25 to $4.65. The company does not expect a rapid recovery of the Florida economy. It also expects continued moderate natural gas prices and to add another 1,000 megawatts to its U.S.-leading wind portfolio in 2010.
FPL Group’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.
In addition, FPL Group’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 supply chain expansion for wind and solar; transmission expansion to support wind and solar development; access to capital at reasonable cost and terms; and no acquisitions. Please see the accompanying cautionary statements for a list of the risk factors that may affect future results.
As previously announced, FPL Group’s fourth-quarter earnings conference call is scheduled for 9 a.m. ET on Tuesday, Jan. 26, 2010. The webcast is available on FPL Group’s Web site by accessing the following link,
The slides and earnings release accompanying the presentation may be downloaded at www.FPLGroup.com 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.
FPL Group: Energy Solutions for the Next Era
FPL Group, Inc. (NYSE: FPL) is a leading clean energy company with 2009 revenues of more than $15 billion, nearly 43,000 megawatts of generating capacity, and more than 15,000 employees in 28 states and Canada. Headquartered in Juno Beach, Fla., FPL Group’s principal subsidiaries are NextEra Energy Resources, LLC, the largest generator in North America of renewable energy from the wind and sun, and Florida Power & Light Company, which serves approximately 4.5 million customer accounts in Florida and is one of the largest rate-regulated electric utilities in the country. Through its subsidiaries, FPL Group collectively operates the third largest U.S. nuclear power generation fleet.