Rebecca J. Kujawa
Executive Vice President of Finance and Chief Financial Officer at NextEra Energy
Thank you, John and good morning, everyone. Let's now turn to the detailed results, beginning with FPL. For the fourth quarter of 2021, FPL reported a net income of $560 million or $0.28 per share, up $0.03 per share year-over-year. For the full year 2021, FPL reported net income of $2.94 billion or $1.49 per share, an increase of $0.14 per share versus 2020. Regulatory capital employed increased by approximately 11% for 2021 and was the principal driver of FPL's net income growth of nearly 11% for the full year.
During the fourth quarter, net income was impacted by a number of factors including an approximately $32 million pre-tax contribution to our charitable foundation that will allow it to continue to support the communities that we serve. FPL's capital expenditures were approximately $2.2 billion in the fourth quarter, bringing its full year capital investments to a total of roughly $6.8 billion. FPL's reported ROE for regulatory purposes is expected to be 11.6% for the 12 months ended December 31, 2021.
During the fourth quarter, we utilized approximately $137 million of reserve amortization, leaving FPL with a year-end 2021 balance of $460 million. As a reminder, our new four-year settlement agreement became effective this month and includes the flexibility over the four-year term to amortize up to $1.45 billion of depreciation reserve surplus, which is inclusive of $346 million in reserve amount that we previously anticipated to be remaining at year-end 2021 under FPL's now expired 2016 rate agreement.
Consistent with the terms of the 2021 settlement agreement, half of the $114 million in excess reserve balance at year-end 2021 will be used to reduce our outstanding capital recovery asset balance, and the other half will increase FPL's storm reserve to offset future restoration costs. As a reminder, the new agreement limits reserve amortization to $200 million in 2022, which we will treat as a limitation in any given quarter during the year. Given the historical shape of our customer usage, we typically use more reserved amortization in the first half of the year and reverse reserve amortization in the hotter summer months. We currently expect FPL to initially earn below our target regulatory ROE in the early part of 2022, although for the full year, we are targeting the upper end of the allowed range of 9.7% to 11.7%. As a result, we also expect FPL's earnings growth to be lower in the first half of the year and higher in the second half.
As always, our expectations assume our usual caveats including normal weather and operating conditions. Our overall capital program at Florida Power & Light is progressing well. We continue to advance one of the nation's largest solar expansions and met our solar deployment objectives at both FPL and Gulf Power in 2021, including commissioning more than 800 megawatts of new solar across the combined system. Beyond solar, construction on the highly efficient, roughly 1,200 megawatt Dania Beach Clean Energy Center remains on schedule and on budget as it continues to advance towards its projected commercial operations date later this year. The North Florida Resiliency Connection remains on track to be in service by mid-2022.
Let me now turn to Gulf Power, which as a reminder was legally merged into FPL on January 1, 2021, but continued to be reported as a separate regulated segment during 2021. Gulf Power reported fourth quarter 2021 GAAP earnings of $60 million or $0.03 per share. For the full year, Gulf Power reported net income of $271 million or $0.14 per share, an increase of $0.02 per share year-over-year. Base O&M reductions and investments in the business were the primary drivers of Gulf Power's approximately 14% year-over-year growth in net income. Gulf Power's capital expenditures for the full year were roughly $800 million and reported ROE for regulatory purposes is expected to be approximately 11.25% for the 12 months ending December 2021.
Given that this is the last time we will be talking about Gulf Power's financial results, let me take a moment to summarize the team's execution over the past three years. Gulf Power has delivered significant improvements in all key financial and operational metrics while meaningfully improving its customer value proposition. The execution of the NextEra Energy playbook at Gulf Power, which is focusing on reducing costs and making smart capital investments for the benefit of customers has been a remarkable success. Gulf Power has realized a nearly 40% reduction in O&M costs since the acquisition.
Since 2018, Gulf Power improved service reliability by nearly 60% and it was awarded national recognition for its outstanding reliability performance in the Southeast suburban and rural service area for the second year in a row in 2021. Over the same period, Gulf Power realized an approximately 60% improvement in safety among our employees who have worked tirelessly to help us execute on our plans. Regulatory capital employed has grown by approximately 16% compound annual growth rate since 2018. We have invested approximately $2.5 billion in long-term improvements to Gulf Power's existing system and generation fleet. As a result of our Clean Power modernization investments at Gulf Power, we have already delivered an approximately 25% reduction in CO2 emissions over the last three years and we look forward to further expanding the opportunity for our customers to access clean low-cost solar and storage in the years to come.
This high level of performance across the board could not have been possible without the hard work and commitment of all of the Gulf Power employees, and I would like to thank all of our Florida Power & Light employees, old and new, for their relentless focus on reducing costs while improving reliability and safety over the past years.
Execution of the plans that we laid out at Gulf Power has generated great outcomes for our shareholders as well. Gulf Power's net income has grown by a compound annual growth rate of approximately 19% since 2018, an outcome that was even better than our expectations when we announced the acquisition. Our performance with Gulf Power is a clear validation of our strategy and our conviction that you can be clean, reliable, affordable and profitable at the same time.
The Florida economy remains strong. Over the last 10 years, Florida's GDP has grown at a roughly 5% compound annual growth rate. The GDP of Florida is roughly $1.2 trillion, which is up approximately 8% from pre-pandemic levels and would make Florida the 15th largest economy in the world. At the same time, Florida's population continues to grow at one of the fastest rates in the nation. According to recent Census Bureau data, more people move to Florida from other parts of the country than to any other state in 2021.
We believe this is a reflection of Florida's unique proposition in terms of great weather, low taxes, and a pro-business economy, all of which should support ongoing customer growth at Florida Power & Light. Over the past year, Florida has created more than 485,000 new private-sector jobs and Florida's labor force participation rate has improved significantly. Three months' average Florida building permits a leading indicator of residential new service accounts are up 15% year-over-year and have outpaced the nation's quarterly growth in new building permits by roughly 13%. Other measures of confidence in the Florida economy have meaningfully improved versus the prior year, including a 34% improvement in Florida's retail sales index and a 2.6% decline in mortgage delinquencies or mortgage delinquencies across the US have remained roughly flat.
During the quarter, FPL's average customer growth was strong, increasing by nearly 82,000 customers from the comparable prior-year quarter. FPL's fourth quarter retail sales were down 1.5% versus the prior-year period, driven by an unfavourable weather comparison. For 2021, FPL's retail sales increased 1.7% from the prior year on a weather-normalized basis, driven primarily by ongoing strong customer growth and a 1.5% year-over-year increase and underlying usage per customer. Additional details are shown on the accompanying slide.
Energy Resources reported fourth quarter 2021 GAAP net income of $851 million or $0.43 per share. Adjusted earnings for the fourth quarter were $414 million or $0.21 per share. Energy Resources contribution to adjusted earnings per share in the fourth quarter is up $0.04 versus the prior-year comparable period. For the full year, Energy Resources reported GAAP earnings of $599 million or $0.30 per share and adjusted earnings of approximately $2.21 billion or $1.12 per share. Energy Resources' full year adjusted earnings per share contribution increased to $0.13 or approximately 13% versus 2020. For the full year, growth was driven by continued new additions to our renewables and energy storage portfolio as contributions from new investments increased by $0.12 per share. Contributions from existing generation and storage assets decreased $0.04 versus the prior year, due primarily to underperformance in our existing wind fleet as a result of extreme market conditions in Texas in February of last year. NextEra Energy Transmission and gas infrastructure contributed favorably, increasing results by $0.01 and $0.02 respectively year-over-year, while the contribution from our customer supply and trading businesses decreased by $0.02 versus 2020. All other impacts increased results by $0.04 year-over-year.
As Jim mentioned, Energy Resources had an outstanding year delivering our best year ever for origination, adding approximately 7,200 net megawatts of new renewables and battery storage projects to our backlog. In 2021, we commissioned approximately 3,800 megawatts of wind, solar, and storage projects, including a 110 megawatt build-own-transfer project that was not included in our backlog. In addition, since the last call, we have added approximately 1,500 megawatts of renewable projects to our backlog, including approximately 700 megawatts of new wind and wind re-powering, 300 megawatts of solar, and 500 megawatts of battery storage. Origination performance in 2021 reflects continued high demand among our customer classes for clean energy solutions that not only help achieve their renewable energy goals, but perhaps more importantly, allow our customers to save energy -- save money on energy costs while switching to lower-cost forms of generation like wind, solar, and solar plus storage.
Our renewables backlog now stands at more than 16,600 megawatts, which is roughly the size of our entire renewables generation portfolio at the end of 2017, and nearly 25% larger than our backlog at year-end 2020, and this provides terrific visibility into the strong growth that lies ahead for Energy Resources over the next few years. The accompanying slide provides additional details on where our development program Energy Resources now stands. We remain optimistic about the expanded investment opportunities that the broad de-carbonization of the US economy presents for Energy Resources. We believe that there are many new market opportunities where our industry-leading development platform will provide a competitive advantage to further grow our core long-term contracted renewables and storage business.
As we have previously discussed, green hydrogen presents a particularly compelling new market for Energy Resources. During the fourth quarter, a clean energy technology company in which we are a minority equity investor and that has developed a proprietary process to decarbonize the industrial production of hydrogen at economic prices, won a conditional approval for an approximately $1 billion DOE, Department of Energy loan to expand its clean hydrogen and carbon black production facilities in Nebraska.
Our agreement with this company provides Energy Resources the opportunity to be its preferred renewable energy supplier for the facility and we are encouraged by the acceleration of the facility build-out that is expected to occur as a result of these new loans. Similarly, early in the year, we completed the strategic investment in the liquid fuels company with a proprietary process to produce zero emissions synthetic fuels by combining green hydrogen with concentrated carbon dioxide streams captured from industrial processes. Our strategic partnership with this Company includes the opportunity for Energy Resources to provide up to 3,000 megawatts under a preferential energy supply agreement.
Finally, as part of our efforts to help our commercial and industrial customers achieve their substantial goals for both energy savings and de-carbonization, we recently announced an agreement with J.P. Morgan Chase that allows for use of our proprietary state-of-the-art smart energy software to optimize its energy use and reduce its carbon footprint.
Energy Resources' advanced software platform uses artificial intelligence and blockchain technology and leverages data from the industry-leading renewables and storage fleet, owned and operated by Energy Resources, to among other things match energy demand with clean-energy resources available on the market in real-time. We recently signed a similar agreement that allows a large university to use our advanced software platform to manage and optimize a more than 100 megawatts solar plus storage asset in California. Through these initiatives, Energy Resources is leveraging its best-in-class renewable energy expertise to provide significant value to its customers in a market with meaningful growth potential.
We are at the vanguard of building a sustainable energy era that is both clean and affordable, and we are driving hard to continue to be at the forefront of the disruption that is occurring within the energy sector and broader parts of the US economy. Consistent with our long-term track record, we will remain disciplined as we take steps to be at the forefront of these developing markets while taking a leadership role in clean energy transition, expected to drive tremendous growth for Energy Resources over the next decade and beyond.
Turning now to the consolidated results for NextEra Energy. For the fourth quarter of 2021, GAAP net income attributable to NextEra Energy was $1.2 billion or $0.61 per share. NextEra Energy's 2021 fourth quarter adjusted earnings and adjusted EPS were $814 million or $0.41 per share respectively. For the full year 2021, GAAP net income attributable to NextEra Energy was $3.57 billion or $1.81 per share. Adjusted earnings were $5.02 billion or $2.55 per share.
For the corporate and other segment, adjusted earnings for the full year decreased $0.05 per share compared to the prior year, primarily as a result of higher interest and refinancing costs associated with certain liability management initiatives completed during the fourth quarter to take advantage of the low interest-rate environment. Our fourth quarter refinancing activities reduced nominal adjusted net income by roughly $140 million. We expect these initiatives to translate into favorable net income contribution in future years and an overall improvement in net present value for our shareholders. Specifically, during the fourth quarter, NextEra Energy successfully refinanced approximately $5.2 billion in existing debt and hybrid securities and proactively issued roughly $4.9 billion in replacement funding. This combination of redemptions and new issuance extended its maturity profile by over six years and is expected to generate an approximately $30 million after-tax reduction in annual interest expense in the near term.
Capital recycling remains an important part of our financing plan as we continue to execute on the tremendous growth opportunities in front of us. During the fourth quarter, Energy Resources closed on its previously announced agreements to sell a portfolio of newly constructed and under construction renewable assets to NextEra Energy Partners and to a third-party infrastructure investor. Through the sale of this 2.5 gigawatt renewables portfolio, Energy Resources was able to recycle nearly $3.5 billion of capital including the tax equity proceeds in an accretive manner and take advantage of the strong market for wind, solar and storage assets. We believe that our renewables development platform at Energy Resources is second to none and our ability to continue to harness market demand for renewables and recognize the value of that platform is a key competitive advantage for NextEra Energy, as it continues to grow its portfolio of long-term contracted operating renewables and storage assets at Energy Resources.
Turning now to our financial expectations for NextEra Energy. As Jim discussed, today we are increasing the ranges of our adjusted EPS expectations for 2022 and 2023 and introducing our expectations for 2024 and 2025. For 2022, NextEra Energy now expects adjusted earnings per share to be in a range of $2.75 to $2.85. For 2023 through 2025, NextEra Energy expects to grow roughly 6% to 8% off of the expected 2022 adjusted earnings per share range, and we will be disappointed if we are not able to deliver financial results at or near the top end of these ranges for each year.
Details of our new financial expectations are included on the accompanying slide. From 2021 to 2025, we expect that our average annual growth in operating cash flow will be at or above our adjusted EPS compound annual growth rate range. We also continue to expect to grow our dividends per share at roughly 10% through -- per year through at least 2022 off of a 2020 base. As always, our expectations assume our usual caveats.
Let me now turn to the detailed financial results for NextEra Energy Partners. Fourth quarter adjusted EBITDA was $322 million and cash available for distribution was $91 million. Adjusted EBITDA growth versus the prior-year comparable quarter was primarily due to the growth in the underlying portfolio. For the full year 2021, adjusted EBITDA was $1.36 billion, up 8% year-over-year and was primarily driven by the full contribution from new projects acquired late in 2020. Our existing project's portfolio favorable performance from NextEra Energy Partners' natural gas pipeline investments and contributions from the wind re-powering that we added at the end of 2020, were partially offset by weaker wind resource and lower generation at our Genesis solar project as a result of outages for major maintenance in the first and fourth quarters of 2021.
For the full year, wind resource was 98% of the long-term average versus 100% in 2020. Cash available for distribution was $584 million for the full year. The benefit to cash available for distribution from lower corporate-level interest expense was partially offset by comparably higher project-level financing costs on our Genesis solar project and other existing assets that were re-capitalized to fund the acquisition of approximately 500 net megawatts from Energy Resources at the end of 2020.
Over the past three years, NextEra Energy Partners' cash available for distribution has grown at a compound annual growth rate of approximately 20%. As a reminder, these results include the impact of IDR fees which we treat as an operating expense. Additional details are shown on the accompanying slide.
Yesterday, the NextEra Energy Partners' Board declared a quarterly distribution of $0.7075 per common unit or $2.83 per unit on an annualized basis, up 15% from the comparable quarterly distribution a year earlier. And at the top end of the range, we discussed going into 2021. During the quarter, NextEra Energy Partners closed on the initial funding of its approximately $820 million convertible equity portfolio financing with Apollo Global Management and used those proceeds along with existing NextEra Energy Partners' debt capacity to fund its acquisition of approximately 1,300 net megawatts of renewables and storage from Energy Resources.
Under the terms of the agreement, NextEra Energy Partners is expected to benefit from a low implied initial cash coupon over the first 10 years, despite only providing approximately 4% of the upfront capital needed to purchase the assets while we expect to allow next Energy Partners to achieve a full return of its capital invested into these -- into this acquisition in less than two years. Additionally, the financing will provide NextEra Energy Partners the flexibility to periodically buy out the investors' equity interest between the five and 10 year anniversaries of the agreement, at a fixed pretax return of approximately 5.6%, inclusive of all prior distributions, making this NextEra Energy Partners' lowest cost convertible equity portfolio financing to date.
NextEra Energy Partners will have the right to pay up to 100% of the buyout price in NEP common units issued at no discount to the then-current market price. NextEra Energy Partners also issued approximately 7.25 million new NEP common units during the fourth quarter to acquire the remaining equity interest in a portfolio of 1,388 megawatts of wind and solar assets, associated with the convertible equity portfolio financing that NEP entered into in 2018. NextEra Energy Partners funded the remaining roughly $265 million of the approximately $885 million of total consideration for the acquisition of equity in the portfolio with project-level debt issued on a subset of the underlying assets.
The nearly $650 million project financing supported by these assets, which was also the lowest cost project-level debt financing in the partnership's history, is reflective of the strong performance of the underlying assets in the portfolio and also supported financing of other growth opportunities executed in 2021. From an updated base of our fourth quarter 2021 distribution per common unit at an annualized rate of $2.83, we continue to see 12% to 15% growth per year in LP distributions as being a reasonable range of expectations through at least 2024. We expect the annualized rate of the fourth quarter 2022 distribution that is payable in February of 2023, to be in a range of $3.17 to $3.25 per common unit. We continue to expect to achieve our 2022 distribution growth of 12% to 15% while maintaining a trailing 12-month payout ratio in the low 80% range.
Given the successful execution of the recent acquisition from Energy Resources as well as the approximately 100-megawatt operating wind facility from a third party, year-end December 31, 2021 run-rate adjusted EBITDA and cash available for distribution exceeded our previous expectations ranges. As a result, today, we are introducing new year-end 2021 run rate expectation ranges for adjusted EBITDA and cash available for distribution of $1.635 billion to $1.795 billion and $640 million to $720 million respectively. With the combination of strong cash flow generation from the existing NextEra Energy Partners' portfolio including the approximately 2,400 net megawatts of new renewables and storage added during 2021 and relatively low payout ratio, NextEra Energy Partners has significant flexibility in terms of acquisitions in the coming year.
Although acquisitions could occur at any time during 2022, for modeling purposes, it may be practical to assume that any new unannounced asset additions occur late in 2022, and therefore, have limited contributions to the calendar year 2022 expectations implied by the year-end 2021 run rate for adjusted EBITDA and cash available for distribution for the portfolio that we just discussed.
NextEra Energy Partners' run rate expectations for adjusted EBITDA and CAFD at December 31, 2022, remain unchanged. Year-end 2022 run-rate adjusted EBITDA expectations are $1.775 billion to $1.975 billion, and CAFD in the range of $675 million to $765 million respectively, reflecting calendar year 2023 expectations for the forecasted portfolio at year-end 2022. As a reminder, all of our expectations are subject to our normal caveats and include the impact of anticipated IDR fees as we anticipate -- as we treat those as an operating expense.
In summary, we continue to believe that both NextEra Energy and NextEra Energy Partners have excellent prospects for growth, both in the near and longer terms. Florida Power & Light, Energy Resources and NextEra Energy Partners each have an outstanding set of opportunities across the board. The progress we made in 2021 reinforces our longer-term growth prospects and while we have a lot to execute in 2022, we believe that we have the building blocks in place for another excellent year.
That concludes our prepared remarks. And with that, we will open up the line for questions.
