The company has also reported 2008 fourth quarter net income on a GAAP basis of $408 million, or $1.01 per share, compared with $224 million, or $0.56 per share, in the fourth quarter of 2007. On an adjusted basis, FPL Group’s earnings were $361 million, or $0.90 per share, for the fourth quarter of 2008 compared with $284 million, or $0.72 per share, in the fourth quarter of 2007. Adjusted earnings exclude the mark-to-market effects of non-qualifying hedges and other than temporary impairments (OTTI) on certain investments, both of which relate to NextEra Energy Resources.
FPL Group’s management uses adjusted earnings internally for financial planning, for analysis of performance, for reporting of results to the Board of Directors and as an input in determining whether performance targets are met for performance-based compensation under the company’s employee incentive compensation plans. FPL 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.
“We’re pleased to report that 2008 was our best year ever, which is something we doubt very many companies can say. Our success was driven by record adjusted earnings at NextEra Energy Resources, which we renamed from FPL Energy to better reflect the company’s clean energy mission and market focus. At Florida Power & Light, we continued to exercise prudent management in the face of an unprecedented Florida economic downturn. We believe that FPL Group’s ability to generate record adjusted earnings in a highly challenging year is a powerful endorsement of our long-term strategy, our commitment to financial discipline, and our dedicated and talented employees,” said FPL chairman and chief executive officer Lew Hay.
Florida Power & Light Company
Reflecting the impact of the continuing economic downturn in Florida, fourth quarter 2008 net income for Florida Power & Light Company, FPL Group’s utility subsidiary, was $151 million, or $0.38 per share, compared to $173 million, or $0.43 per share, in the prior year quarter. For the full year, net income was $789 million, or $1.96 per share, compared to $836 million, or $2.09 per share, in 2007.
Florida Power & Light’s revenues continue to be affected by the economic slowdown. The average number of customer accounts decreased by 8,000, or 0.2%, during the fourth quarter of 2008 compared to the prior year’s comparable quarter. For the full year, the average number of customer accounts increased by 13,000, or 0.3 %, compared to the prior year, well below the company’s historical average.
Retail sales of electricity decreased 8.4 % and 2.4 % for the fourth quarter and full year 2008, respectively, relative to the comparable periods primarily due to unfavorable weather comparisons. Weather-related usage accounted for 6.2 % and 0.9 %, respectively, of the retail kilowatt hour sales declines. Despite the lower sales figures, Florida Power & Light delivered strong cost management, reducing full year operations and maintenance costs by 10 % relative to original expectations.
During the year, Florida Power & Light made tremendous progress in implementing its long-term generation strategy to provide its customers affordable, reliable energy solutions that are cleaner and more efficient at a reasonable price. Florida Power & Light broke ground at the first of three utility-scale solar generation facilities it is building in Florida. It will recover the cost of the 110 megawatt total investment under a Florida statute enacted to encourage renewable energy projects.
Florida Power & Light also received approval from the Florida Public Service Commission (PSC) to build a third combined cycle generating unit at the utility’s West County Energy Center and to modernize its Cape Canaveral and Riviera power plants.
These investments will increase the efficiency of Florida Power & Light’s generation fleet, reduce emissions, and provide savings to customers through fuel-cost reductions over the life of the projects. Florida Power & Light also moved forward with nuclear “uprates” at its St. Lucie and Turkey Point nuclear power plants; these upgrades will boost capacity by around 400 megawatts of emissions-free power.
NextEra Energy Resources
NextEra Energy Resources, the competitive energy subsidiary of FPL Group, reported fourth quarter 2008 net income on a GAAP basis of $265 million, or $0.66 per share, compared to $72 million, or $0.18 per share, in the prior-year quarter. Excluding the mark-to-market effect of non-qualifying hedges and OTTI, adjusted earnings for NextEra Energy Resources were $218 million, or $0.55 per share, in the quarter, compared to $132 million, or $0.34 per share, in 2007.
