Free cash flow
US utilities’ (XLU) free cash flows have been pressured in the last few years due to increasing capital expenditures and decreasing operating cash flows. However, NextEra Energy (NEE) seems better placed compared to peers when it comes to free cash flows. NEE’s free cash flow had been on a solid uptrend before a slight drop in 2016. At the end of 1Q17, its capital expenditure exceeded operating cash flows by $938 million.
In comparison, falling operating cash flows in the last few years squeezed the free cash flows of Southern Company (SO) and the largest rate-regulated utility, Duke Energy (DUK). Both the utility giants have failed to record positive free cash flows on an annual basis in the last five years.
To learn more about Xcel Energy’s (XEL) free cash flows, read Understanding Xcel Energy’s Free Cash Flow Trends.