Item 1. Financial Statements

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Item 1. Financial Statements

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(millions, except per share amounts)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
OPERATING REVENUES	$	6,719	$	4,370	$	14,792	$	12,023
OPERATING EXPENSES
Fuel, purchased power and interchange	1,933		1,383		4,888		3,393
Other operations and maintenance	1,225		910		3,161		2,764



Depreciation and amortization	1,289		1,230		3,332		2,960
Taxes other than income taxes and other – net	581		481		1,572		1,368
Total operating expenses – net	5,028		4,004		12,953		10,485
GAINS ON DISPOSAL OF BUSINESSES/ASSETS – NET	171		13		196		20
OPERATING INCOME	1,862		379		2,035		1,558
OTHER INCOME (DEDUCTIONS)
Interest expense	(259)		(335)		100		(671)

Equity in earnings of equity method investees	196		109		180		465
Allowance for equity funds used during construction	20		37		88		100


Gains on disposal of investments and other property – net	51		17		83		69
Change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds – net	(141)		(26)		(569)		137
Other net periodic benefit income	70		64		159		193
Other – net	83		32		160		107
Total other income (deductions) – net	20		(102)		201		400
INCOME BEFORE INCOME TAXES	1,882		277		2,236		1,958
INCOME TAX EXPENSE (BENEFIT)	323		(27)		257		84
NET INCOME	1,559		304		1,979		1,874
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS	137		143		646		495
NET INCOME ATTRIBUTABLE TO NEE	$	1,696	$	447	$	2,625	$	2,369
Earnings per share attributable to NEE:
Basic	$	0.86	$	0.23	$	1.33	$	1.21
Assuming dilution	$	0.86	$	0.23	$	1.33	$	1.20

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(millions)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
NET INCOME	$	1,559	$	304	$	1,979	$	1,874
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Reclassification of unrealized losses on cash flow hedges from accumulated other comprehensive income (loss) to net income (net of $0 tax benefit, $0 tax benefit, $2 tax benefit and $1 tax benefit, respectively)	—		—		5		4
Net unrealized gains (losses) on available for sale securities:
Net unrealized losses on securities still held (net of $8 tax benefit, $1 tax benefit, $31 tax benefit and $3 tax benefit, respectively)	(31)		(2)		(91)		(9)
Reclassification from accumulated other comprehensive income (loss) to net income (net of $1 tax benefit, $1 tax expense, $1 tax benefit and $1 tax expense, respectively)	1		(1)		3		(3)
Defined benefit pension and other benefits plans:

Reclassification from accumulated other comprehensive income (loss) to net income (net of $0 tax expense, $1 tax benefit, $0 tax expense and $1 tax benefit, respectively)	—		1		—		3
Net unrealized gains (losses) on foreign currency translation	(49)		(13)		(58)		2
Other comprehensive income related to equity method investees (net of $0 tax expense, $1 tax expense, $0 tax expense and $1 tax expense, respectively)	1		1		1		1
Total other comprehensive loss, net of tax	(78)		(14)		(140)		(2)


COMPREHENSIVE INCOME	1,481		290		1,839		1,872
COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS	160		148		672		495
COMPREHENSIVE INCOME ATTRIBUTABLE TO NEE	$	1,641	$	438	$	2,511	$	2,367

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions, except par value)

(unaudited)


	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	2,508	$	639
Customer receivables, net of allowances of $69 and $35, respectively	4,553		3,378
Other receivables	776		730
Materials, supplies and fuel inventory	1,791		1,561
Regulatory assets	620		1,125
Derivatives	1,431		689

Other	1,212		1,166
Total current assets	12,891		9,288
Other assets:
Property, plant and equipment – net ($19,301 and $20,521 related to VIEs, respectively)	108,447		99,348
Special use funds	7,195		8,922
Investment in equity method investees	6,316		6,159
Prepaid benefit costs	2,341		2,243
Regulatory assets	6,939		4,578
Derivatives	2,113		1,135
Goodwill	4,872		4,844
Other	5,295		4,395
Total other assets	143,518		131,624
TOTAL ASSETS	$	156,409	$	140,912
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Commercial paper	$	925	$	1,382
Other short-term debt	1,938		700
Current portion of long-term debt ($60 and $58 related to VIEs, respectively)	7,292		1,785
Accounts payable ($244 and $752 related to VIEs, respectively)	7,149		6,935
Customer deposits	525		485
Accrued interest and taxes	1,279		525
Derivatives	2,969		1,263
Accrued construction-related expenditures	1,891		1,378
Regulatory liabilities	410		289

Other	3,415		2,695
Total current liabilities	27,793		17,437
Other liabilities and deferred credits:
Long-term debt ($1,088 and $1,125 related to VIEs, respectively)	54,670		50,960
Asset retirement obligations	3,196		3,082
Deferred income taxes	8,725		8,310
Regulatory liabilities	9,530		11,273
Derivatives	3,067		1,713

Other	2,682		2,468
Total other liabilities and deferred credits	81,870		77,806
TOTAL LIABILITIES	109,663		95,243
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS – VIE	—		245
EQUITY
Common stock ($0.01 par value, authorized shares – 3,200; outstanding shares – 1,987 and 1,963, respectively)	20		20
Additional paid-in capital	12,694		11,271
Retained earnings	26,029		25,911
Accumulated other comprehensive loss	(114)		—
Total common shareholders' equity	38,629		37,202
Noncontrolling interests ($8,109 and $8,217 related to VIEs, respectively)	8,117		8,222
TOTAL EQUITY	46,746		45,424
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	$	156,409	$	140,912

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions)

(unaudited)


	Nine Months Ended September 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,979	$	1,874
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	3,332		2,960
Nuclear fuel and other amortization	211		202

Unrealized losses on marked to market derivative contracts – net	1,924		2,250
Unrealized losses (gains) on equity securities held in NEER's nuclear decommissioning funds – net	569		(137)
Foreign currency transaction gains	(162)		(70)
Deferred income taxes	208		140
Cost recovery clauses and franchise fees	(1,295)		(202)


Equity in earnings of equity method investees	(180)		(465)
Distributions of earnings from equity method investees	408		392
Gains on disposal of businesses, assets and investments – net	(279)		(89)
Recoverable storm-related costs	(26)		(171)
Other – net	(29)		(91)
Changes in operating assets and liabilities:
Current assets	(1,238)		(1,227)
Noncurrent assets	(66)		(316)
Current liabilities	1,809		1,138
Noncurrent liabilities	102		48
Net cash provided by operating activities	7,267		6,236
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures of FPL	(6,021)		(5,000)

Independent power and other investments of NEER	(7,252)		(6,799)

Nuclear fuel purchases	(105)		(206)
Other capital expenditures	(451)		—

Sale of independent power and other investments of NEER	575		384
Proceeds from sale or maturity of securities in special use funds and other investments	2,896		3,233
Purchases of securities in special use funds and other investments	(3,496)		(3,498)


Other – net	5		41
Net cash used in investing activities	(13,849)		(11,845)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of long-term debt, including premiums and discounts	11,616		9,614
Retirements of long-term debt	(2,137)		(4,262)
Proceeds from differential membership investors	443		328

Net change in commercial paper	(457)		2,043
Proceeds from other short-term debt	1,725		—
Repayments of other short-term debt	(525)		(258)
Payments from related parties under a cash sweep and credit support agreement – net	8		295
Issuances of common stock/equity units – net	1,458		7

Dividends on common stock	(2,507)		(2,267)
Other – net	(386)		(434)
Net cash provided by financing activities	9,238		5,066
Effects of currency translation on cash, cash equivalents and restricted cash	(5)		1
Net increase (decrease) in cash, cash equivalents and restricted cash	2,651		(542)
Cash, cash equivalents and restricted cash at beginning of period	1,316		1,546
Cash, cash equivalents and restricted cash at end of period	$	3,967	$	1,004
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest (net of amount capitalized)	$	828	$	878
Cash received for income taxes – net	$	(36)	$	(21)
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued property additions	$	6,079	$	4,664
Decrease in property, plant and equipment – net and contract liabilities (2022 activity, see Note 11)	$	639	$	155

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(millions, except per share amounts)

(unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Common Shareholders' Equity		Non- controlling Interests		Total Equity		Redeemable Non-controlling Interests
Three Months Ended September 30, 2022	Shares	Aggregate Par Value
























Balances, June 30, 2022	1,965	$	20	$	11,309	$	(59)	$	25,169	$	36,439	$	8,115	$	44,554	$	53
Net income (loss)	—	—		—		—		1,696		1,696		(138)				1
Premium on equity units	—	—		(127)		—		—		(127)		—				—
Share-based payment activity	—	—		80		—		—		80		—				—
Dividends on common stock(a)	—	—		—		—		(836)		(836)		—				—
Other comprehensive loss	—	—		—		(55)		—		(55)		(23)				—
Issuances of common stock/equity units – net	22	—		1,446		—		—		1,446		—				—
Disposal of subsidiaries with noncontrolling interests(b)	—	—		—		—		—		—		(147)				—


Other differential membership interests activity	—	—		(13)		—		—		(13)		252				(54)
Other	—	—		(1)		—		—		(1)		58				—
Balances, September 30, 2022	1,987	$	20	$	12,694	$	(114)	$	26,029	$	38,629	$	8,117	$	46,746	$	—

———————————————

(a)Dividends per share were $0.425 for the three months ended September 30, 2022.

(b)See Note 11 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests.


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Common Shareholders' Equity		Non- controlling Interests		Total Equity		Redeemable Non-controlling Interests
Nine Months Ended September 30, 2022	Shares	Aggregate Par Value
Balances, December 31, 2021	1,963	$	20	$	11,271	$	—	$	25,911	$	37,202	$	8,222	$	45,424	$	245
Net income (loss)	—	—		—		—		2,625		2,625		(653)				7
Premium on equity units	—	—		(127)		—		—		(127)		—				—
Share-based payment activity	2	—		122		—		—		122		—				—
Dividends on common stock(a)	—	—		—		—		(2,507)		(2,507)		—				—
Other comprehensive loss	—	—		—		(114)		—		(114)		(26)				—
Issuances of common stock/equity units – net	22	—		1,446		—		—		1,446		—				—
Disposal of subsidiaries with noncontrolling interests(b)	—	—		—		—		—		—		(147)				—


Other differential membership interests activity	—	—		(15)		—		—		(15)		542				(251)
Other	—	—		(3)		—		—		(3)		179				(1)
Balances, September 30, 2022	1,987	$	20	$	12,694	$	(114)	$	26,029	$	38,629	$	8,117	$	46,746	$	—

———————————————

(a)Dividends per share were $0.425 for each of the quarterly periods in 2022.

(b)See Note 11 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests.

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(millions, except per share amounts)

(unaudited)


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Common Shareholders' Equity		Non- controlling Interests		Total Equity		Redeemable Non-controlling Interests
Three Months Ended September 30, 2021	Shares	Aggregate Par Value
Balances, June 30, 2021	1,962	$	20	$	11,224	$	(85)	$	25,773	$	36,932	$	8,182	$	45,114	$	—
Net income (loss)	—	—		—		—		447		447		(144)				1

Share-based payment activity	—	—		47		—		—		47		—				—
Dividends on common stock(a)	—	—		—		—		(756)		(756)		—				—
Other comprehensive loss	—	—		—		(9)		—		(9)		(5)				—



Other differential membership interests activity	—	—		—		—		—		—		(44)				78
Other	—	—		(12)		—		—		(12)		9				—
Balances, September 30, 2021	1,962	$	20	$	11,259	$	(94)	$	25,464	$	36,649	$	7,998	$	44,647	$	79

———————————————

(a)Dividends per share were $0.385 for the three months ended September 30, 2021.


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Common Shareholders' Equity		Non- controlling Interests		Total Equity		Redeemable Non-controlling Interests
Nine Months Ended September 30, 2021	Shares	Aggregate Par Value
Balances, December 31, 2020	1,960	$	20	$	11,222	$	(92)	$	25,363	$	36,513	$	8,416	$	44,929	$	—
Net income (loss)	—	—		—		—		2,369		2,369		(496)				1

Share-based payment activity	3	—		70		—		—		70		—				—
Dividends on common stock(a)	—	—		—		—		(2,267)		(2,267)		—				—
Other comprehensive loss	—	—		—		(2)		—		(2)		—				—



Other differential membership interests activity	—	—		—		—		—		—		36				78
Other	(1)	—		(33)		—		(1)		(34)		42				—
Balances, September 30, 2021	1,962	$	20	$	11,259	$	(94)	$	25,464	$	36,649	$	7,998	$	44,647	$	79

(a)Dividends per share were $0.385 for each of the quarterly periods in 2021.

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(millions)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
OPERATING REVENUES	$	5,075	$	4,134	$	13,211	$	10,673
OPERATING EXPENSES
Fuel, purchased power and interchange	1,733		1,218		4,364		2,953
Other operations and maintenance	511		416		1,349		1,211

Depreciation and amortization	829		815		2,006		1,724
Taxes other than income taxes and other – net	495		419		1,340		1,175
Total operating expenses – net	3,568		2,868		9,059		7,063
OPERATING INCOME	1,507		1,266		4,152		3,610
OTHER INCOME (DEDUCTIONS)
Interest expense	(200)		(152)		(554)		(461)
Allowance for equity funds used during construction	19		35		82		93
Other – net	9		8		10		11
Total other deductions – net	(172)		(109)		(462)		(357)
INCOME BEFORE INCOME TAXES	1,335		1,157		3,690		3,253
INCOME TAXES	261		230		751		667
NET INCOME(a)	$	1,074	$	927	$	2,939	$	2,586

(a)FPL's comprehensive income is the same as reported net income.

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions, except share amount)

(unaudited)


	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	1,218	$	55
Customer receivables, net of allowances of $9 and $11, respectively	2,036		1,297
Other receivables	544		350
Materials, supplies and fuel inventory	1,073		963
Regulatory assets	608		1,111

Other	193		142
Total current assets	5,672		3,918
Other assets:
Electric utility plant and other property – net	62,212		58,227
Special use funds	5,048		6,158
Prepaid benefit costs	1,716		1,657
Regulatory assets	6,690		4,343
Goodwill	2,989		2,989
Other	826		775
Total other assets	79,481		74,149
TOTAL ASSETS	$	85,153	$	78,067
LIABILITIES AND EQUITY
Current liabilities:
Commercial paper	$	—	$	1,382
Other short-term debt	200		200
Current portion of long-term debt	1,546		536
Accounts payable	1,569		1,318
Customer deposits	517		478
Accrued interest and taxes	932		322

Accrued construction-related expenditures	549		601
Regulatory liabilities	401		278
Other	1,792		643
Total current liabilities	7,506		5,758
Other liabilities and deferred credits:
Long-term debt	19,452		17,974
Asset retirement obligations	2,091		2,049
Deferred income taxes	8,150		7,137
Regulatory liabilities	9,294		11,053

Other	428		502
Total other liabilities and deferred credits	39,415		38,715
TOTAL LIABILITIES	46,921		44,473
COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock (no par value, 1,000 shares authorized, issued and outstanding)	1,373		1,373
Additional paid-in capital	23,636		19,936
Retained earnings	13,223		12,285

TOTAL EQUITY	38,232		33,594
TOTAL LIABILITIES AND EQUITY	$	85,153	$	78,067

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions)

(unaudited)


	Nine Months Ended September 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,939	$	2,586
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	2,006		1,724
Nuclear fuel and other amortization	135		130
Deferred income taxes	771		488
Cost recovery clauses and franchise fees	(1,295)		(202)

Recoverable storm-related costs	(26)		(171)
Other – net	9		(26)
Changes in operating assets and liabilities:
Current assets	(934)		(312)
Noncurrent assets	(48)		(86)
Current liabilities	899		576
Noncurrent liabilities	94		(7)
Net cash provided by operating activities	4,550		4,700
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(6,021)		(5,000)
Nuclear fuel purchases	(67)		(110)
Proceeds from sale or maturity of securities in special use funds	1,738		2,223
Purchases of securities in special use funds	(1,833)		(2,302)
Other – net	(7)		(8)
Net cash used in investing activities	(6,190)		(5,197)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of long-term debt, including premiums and discounts	2,942		1,388
Retirements of long-term debt	(441)		(1,304)
Net change in commercial paper	(1,382)		(852)


Capital contributions from NEE	3,700		1,700
Dividends to NEE	(2,000)		(435)
Other – net	(36)		(21)
Net cash provided by financing activities	2,783		476
Net increase (decrease) in cash, cash equivalents and restricted cash	1,143		(21)
Cash, cash equivalents and restricted cash at beginning of period	108		160
Cash, cash equivalents and restricted cash at end of period	$	1,251	$	139
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest (net of amount capitalized)	$	476	$	410
Cash paid for income taxes – net	$	145	$	44
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued property additions	$	946	$	817

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER'S EQUITY

(millions)

(unaudited)


Three Months Ended September 30, 2022	Common Stock		Additional Paid-In Capital		Retained Earnings		Common Shareholder's Equity
Balances, June 30, 2022	$	1,373	$	21,436	$	12,149	$	34,958
Net income	—		—		1,074
Capital contributions from NEE	—		2,200		—


Balances, September 30, 2022	$	1,373	$	23,636	$	13,223	$	38,232


Nine Months Ended September 30, 2022	Common Stock		Additional Paid-In Capital		Retained Earnings		Common Shareholder's Equity
Balances, December 31, 2021	$	1,373	$	19,936	$	12,285	$	33,594
Net income	—		—		2,939
Capital contributions from NEE	—		3,700		—
Dividends to NEE	—		—		(2,000)
Other	—		—		(1)
Balances, September 30, 2022	$	1,373	$	23,636	$	13,223	$	38,232


Three Months Ended September 30, 2021	Common Stock		Additional Paid-In Capital		Retained Earnings		Common Shareholder's Equity
Balances, June 30, 2021	$	1,373	$	19,272	$	10,843	$	31,488
Net income	—		—		927
Capital contributions from NEE	—		665		—

Other	—		(1)		—
Balances, September 30, 2021	$	1,373	$	19,936	$	11,770	$	33,079


Nine Months Ended September 30, 2021	Common Stock		Additional Paid-In Capital		Retained Earnings		Common Shareholder's Equity
Balances, December 31, 2020	$	1,373	$	18,236	$	9,619	$	29,228
Net income	—		—		2,586
Capital contributions from NEE	—		1,700		—
Dividends to NEE	—		—		(435)

Balances, September 30, 2021	$	1,373	$	19,936	$	11,770	$	33,079

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The accompanying condensed consolidated financial statements should be read in conjunction with the 2021 Form 10-K. In the opinion of NEE and FPL management, all adjustments considered necessary for fair financial statement presentation have been made. All adjustments are normal and recurring unless otherwise noted. Certain amounts included in the prior year's condensed consolidated financial statements have been reclassified to conform to the current year's presentation. The results of operations for an interim period generally will not give a true indication of results for the year.

1. Revenue from Contracts with Customers

FPL and NEER generate substantially all of NEE’s operating revenues, which primarily include revenues from contracts with customers, as well as derivative (see Note 2) and lease transactions at NEER. For the vast majority of contracts with customers, NEE believes that the obligation to deliver energy, capacity or transmission is satisfied over time as the customer simultaneously receives and consumes benefits as NEE performs. NEE’s revenue from contracts with customers was approximately $6.4 billion ($5.1 billion at FPL) and $5.4 billion ($4.1 billion at FPL) for the three months ended September 30, 2022 and 2021, respectively, and $17.4 billion ($13.2 billion at FPL) and $14.1 billion ($10.6 billion at FPL) for the nine months ended September 30, 2022 and 2021, respectively. NEE's and FPL's receivables are primarily associated with revenues earned from contracts with customers, as well as derivative and lease transactions at NEER, and consist of both billed and unbilled amounts, which are recorded in customer receivables and other receivables on NEE's and FPL's condensed consolidated balance sheets. Receivables represent unconditional rights to consideration and reflect the differences in timing of revenue recognition and cash collections. For substantially all of NEE's and FPL's receivables, regardless of the type of revenue transaction from which the receivable originated, customer and counterparty credit risk is managed in the same manner and the terms and conditions of payment are similar. During the nine months ended September 30, 2021, NEER did not recognize approximately $180 million of revenue related to reimbursable expenses from a counterparty that were deemed not probable of collection. These reimbursable expenses arose from the impacts of severe prolonged winter weather in Texas in February 2021 (February 2021 weather event). These determinations were made based on assessments of the counterparty's creditworthiness and NEER's ability to collect.

FPL – FPL’s revenues are derived primarily from tariff-based sales that result from providing electricity to retail customers in Florida with no defined contractual term. Electricity sales to retail customers account for approximately 90% of FPL’s operating revenues, the majority of which are to residential customers. FPL's retail customers receive a bill monthly based on the amount of monthly kWh usage with payment due monthly. For these types of sales, FPL recognizes revenue as electricity is delivered and billed to customers, as well as an estimate for electricity delivered and not yet billed. The billed and unbilled amounts represent the value of electricity delivered to the customer. At September 30, 2022 and December 31, 2021, FPL's unbilled revenues amounted to approximately $693 million and $583 million, respectively, and are included in customer receivables on NEE's and FPL's condensed consolidated balance sheets. Certain contracts with customers contain a fixed price which primarily relate to certain power purchase agreements with maturity dates through 2041. As of September 30, 2022, FPL expects to record approximately $400 million of revenues related to the fixed capacity price components of such contracts over the remaining terms of the related contracts as the capacity is provided. These contracts also contain a variable price component for energy usage which FPL recognizes as revenue as the energy is delivered based on rates stipulated in the respective contracts.

NEER – NEER’s revenue from contracts with customers is derived primarily from the sale of energy commodities, electric capacity and electric transmission. For these types of sales, NEER recognizes revenue as energy commodities are delivered and as electric capacity and electric transmission are made available, consistent with the amounts billed to customers based on rates stipulated in the respective contracts as well as an accrual for amounts earned but not yet billed. The amounts billed and accrued represent the value of energy or transmission delivered and/or the capacity of energy or transmission available to the customer. Revenues yet to be earned under these contracts, which have maturity dates ranging from 2022 to 2053, will vary based on the volume of energy or transmission delivered and/or available. NEER’s customers typically receive bills monthly with payment due within 30 days. Certain contracts with customers contain a fixed price which primarily relate to electric capacity sales associated with ISO annual auctions through 2026, certain power purchase agreements with maturity dates through 2034 and capacity sales associated with natural gas transportation through 2062. At September 30, 2022, NEER expects to record approximately $1.2 billion of revenues related to the fixed price components of such contracts over the remaining terms of the related contracts as the capacity is provided.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

2. Derivative Instruments

NEE and FPL use derivative instruments (primarily swaps, options, futures and forwards) to manage the physical and financial risks inherent in the purchase and sale of fuel and electricity, as well as interest rate and foreign currency exchange rate risk associated primarily with outstanding and expected future debt issuances and borrowings, and to optimize the value of NEER's power generation and gas infrastructure assets. NEE and FPL do not utilize hedge accounting for their cash flow and fair value hedges.

With respect to commodities related to NEE's competitive energy business, NEER employs risk management procedures to conduct its activities related to optimizing the value of its power generation and gas infrastructure assets, providing full energy and capacity requirements services primarily to distribution utilities, and engaging in power and fuel marketing and trading activities to take advantage of expected future favorable price movements and changes in the expected volatility of prices in the energy markets. These risk management activities involve the use of derivative instruments executed within prescribed limits to manage the risk associated with fluctuating commodity prices. Transactions in derivative instruments are executed on recognized exchanges or via the OTC markets, depending on the most favorable credit terms and market execution factors. For NEER's power generation and gas infrastructure assets, derivative instruments are used to hedge all or a portion of the expected output of these assets. These hedges are designed to reduce the effect of adverse changes in the wholesale forward commodity markets associated with NEER's power generation and gas infrastructure assets. With regard to full energy and capacity requirements services, NEER is required to vary the quantity of energy and related services based on the load demands of the customers served. For this type of transaction, derivative instruments are used to hedge the anticipated electricity quantities required to serve these customers and reduce the effect of unfavorable changes in the forward energy markets. Additionally, NEER takes positions in energy markets based on differences between actual forward market levels and management's view of fundamental market conditions, including supply/demand imbalances, changes in traditional flows of energy, changes in short- and long-term weather patterns and anticipated regulatory and legislative outcomes. NEER uses derivative instruments to realize value from these market dislocations, subject to strict risk management limits around market, operational and credit exposure.

Derivative instruments, when required to be marked to market, are recorded on NEE's and FPL's condensed consolidated balance sheets as either an asset or liability measured at fair value. At FPL, substantially all changes in the derivatives' fair value are deferred as a regulatory asset or liability until the contracts are settled, and, upon settlement, any gains or losses are passed through the fuel clause. For NEE's non-rate regulated operations, predominantly NEER, essentially all changes in the derivatives' fair value for power purchases and sales, fuel sales and trading activities are recognized on a net basis in operating revenues and the equity method investees' related activity is recognized in equity in earnings of equity method investees in NEE's condensed consolidated statements of income. Settlement gains and losses are included within the line items in the condensed consolidated statements of income to which they relate. Transactions for which physical delivery is deemed not to have occurred are presented on a net basis in the condensed consolidated statements of income. For commodity derivatives, NEE believes that, where offsetting positions exist at the same location for the same time, the transactions are considered to have been netted and therefore physical delivery has been deemed not to have occurred for financial reporting purposes. Settlements related to derivative instruments are recognized in net cash provided by operating activities in NEE's and FPL's condensed consolidated statements of cash flows.

For interest rate and foreign currency derivative instruments, all changes in the derivatives' fair value, as well as the transaction gain or loss on foreign denominated debt, are recognized in interest expense and the equity method investees' related activity is recognized in equity in earnings of equity method investees in NEE's condensed consolidated statements of income. At September 30, 2022, NEE's AOCI included amounts related to discontinued interest rate cash flow hedges with expiration dates through March 2035 and foreign currency cash flow hedges with expiration dates through September 2030. Approximately $3 million of net losses included in AOCI at September 30, 2022 are expected to be reclassified into earnings within the next 12 months as the principal and/or interest payments are made. Such amounts assume no change in scheduled principal payments.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Fair Value Measurements of Derivative Instruments – The fair value of assets and liabilities are determined using either unadjusted quoted prices in active markets (Level 1) or pricing inputs that are observable (Level 2) whenever that information is available and using unobservable inputs (Level 3) to estimate fair value only when relevant observable inputs are not available. NEE and FPL use several different valuation techniques to measure the fair value of assets and liabilities, relying primarily on the market approach of using prices and other market information for identical and/or comparable assets and liabilities for those assets and liabilities that are measured at fair value on a recurring basis. NEE's and FPL's assessment of the significance of any particular input to the fair value measurement requires judgment and may affect placement within the fair value hierarchy levels. Non-performance risk, including the consideration of a credit valuation adjustment, is also considered in the determination of fair value for all assets and liabilities measured at fair value.

NEE and FPL measure the fair value of commodity contracts using a combination of market and income approaches utilizing prices observed on commodities exchanges and in the OTC markets, or through the use of industry-standard valuation techniques, such as option modeling or discounted cash flows techniques, incorporating both observable and unobservable valuation inputs. The resulting measurements are the best estimate of fair value as represented by the transfer of the asset or liability through an orderly transaction in the marketplace at the measurement date.

Most exchange-traded derivative assets and liabilities are valued directly using unadjusted quoted prices. For exchange-traded derivative assets and liabilities where the principal market is deemed to be inactive based on average daily volumes and open interest, the measurement is established using settlement prices from the exchanges, and therefore considered to be valued using other observable inputs.

NEE, through its subsidiaries, including FPL, also enters into OTC commodity contract derivatives. The majority of these contracts are transacted at liquid trading points, and the prices for these contracts are verified using quoted prices in active markets from exchanges, brokers or pricing services for similar contracts.

NEE, through NEER, also enters into full requirements contracts, which, in most cases, meet the definition of derivatives and are measured at fair value. These contracts typically have one or more inputs that are not observable and are significant to the valuation of the contract. In addition, certain exchange and non-exchange traded derivative options at NEE have one or more significant inputs that are not observable, and are valued using industry-standard option models.

In all cases where NEE and FPL use significant unobservable inputs for the valuation of a commodity contract, consideration is given to the assumptions that market participants would use in valuing the asset or liability. The primary input to the valuation models for commodity contracts is the forward commodity curve for the respective instruments. Other inputs include, but are not limited to, assumptions about market liquidity, volatility, correlation and contract duration as more fully described below in Significant Unobservable Inputs Used in Recurring Fair Value Measurements. In instances where the reference markets are deemed to be inactive or do not have transactions for a similar contract, the derivative assets and liabilities may be valued using significant other observable inputs and potentially significant unobservable inputs. In such instances, the valuation for these contracts is established using techniques including extrapolation from or interpolation between actively traded contracts, or estimated basis adjustments from liquid trading points. NEE and FPL regularly evaluate and validate the inputs used to determine fair value by a number of methods, consisting of various market price verification procedures, including the use of pricing services and multiple broker quotes to support the market price of the various commodities. In all cases where there are assumptions and models used to generate inputs for valuing derivative assets and liabilities, the review and verification of the assumptions, models and changes to the models are undertaken by individuals that are independent of those responsible for estimating fair value.

NEE uses interest rate contracts and foreign currency contracts to mitigate and adjust interest rate and foreign currency exchange exposure related primarily to certain outstanding and expected future debt issuances and borrowings when deemed appropriate based on market conditions or when required by financing agreements. NEE estimates the fair value of these derivatives using an income approach based on a discounted cash flows valuation technique utilizing the net amount of estimated future cash inflows and outflows related to the agreements.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The tables below present NEE's and FPL's gross derivative positions at September 30, 2022 and December 31, 2021, as required by disclosure rules. However, the majority of the underlying contracts are subject to master netting agreements and generally would not be contractually settled on a gross basis. Therefore, the tables below also present the derivative positions on a net basis, which reflect the offsetting of positions of certain transactions within the portfolio, the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral, as well as the location of the net derivative position on the condensed consolidated balance sheets.


	September 30, 2022
	Level 1		Level 2		Level 3		Netting(a)		Total
	(millions)
Assets:
NEE:
Commodity contracts	$	4,477	$	12,281	$	2,280	$	(15,990)	$	3,048
Interest rate contracts	$	—	$	533	$	—	$	(14)	519
Foreign currency contracts	$	—	$	—	$	—	$	(23)	(23)
Total derivative assets									$	3,544

FPL – commodity contracts	$	—	$	13	$	50	$	(9)	$	54

Liabilities:
NEE:
Commodity contracts	$	6,687	$	11,671	$	3,956	$	(16,463)	$	5,851
Interest rate contracts	$	—	$	33	$	—	$	(14)	19
Foreign currency contracts	$	—	$	189	$	—	$	(23)	166
Total derivative liabilities									$	6,036

FPL – commodity contracts	$	—	$	4	$	29	$	(9)	$	24

Net fair value by NEE balance sheet line item:
Current derivative assets(b)									$	1,431
Noncurrent derivative assets(c)									2,113
Total derivative assets									$	3,544
Current derivative liabilities(d)									$	2,969

Noncurrent derivative liabilities(e)									3,067
Total derivative liabilities									$	6,036

Net fair value by FPL balance sheet line item:
Current other assets									$	52
Noncurrent other assets									2
Total derivative assets									$	54
Current other liabilities									$	20
Noncurrent other liabilities									4
Total derivative liabilities									$	24

———————————————

(a)Includes the effect of the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral payments and receipts. NEE and FPL also have contract settlement receivable and payable balances that are subject to the master netting arrangements but are not offset within the condensed consolidated balance sheets and are recorded in customer receivables – net and accounts payable, respectively.

(b)Reflects the netting of approximately $570 million in margin cash collateral received from counterparties.

(c)Reflects the netting of approximately $221 million in margin cash collateral received from counterparties.

(d)Reflects the netting of approximately $6 million in margin cash collateral paid to counterparties.

(e)Reflects the netting of approximately $1,258 million in margin cash collateral paid to counterparties.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)


	December 31, 2021
	Level 1		Level 2		Level 3		Netting(a)		Total
	(millions)
Assets:
NEE:
Commodity contracts	$	1,896	$	5,082	$	1,401	$	(6,622)	$	1,757
Interest rate contracts	$	—	$	106	$	—	$	(30)	76
Foreign currency contracts	$	—	$	8	$	—	$	(17)	(9)
Total derivative assets									$	1,824

FPL – commodity contracts	$	—	$	3	$	13	$	(3)	$	13

Liabilities:
NEE:
Commodity contracts	$	2,571	$	4,990	$	1,231	$	(6,594)	$	2,198
Interest rate contracts	$	—	$	739	$	—	$	(30)	709
Foreign currency contracts	$	—	$	86	$	—	$	(17)	69
Total derivative liabilities									$	2,976

FPL – commodity contracts	$	—	$	8	$	5	$	(3)	$	10

Net fair value by NEE balance sheet line item:
Current derivative assets(b)									$	689
Noncurrent derivative assets(c)									1,135
Total derivative assets									$	1,824
Current derivative liabilities(d)									$	1,263

Noncurrent derivative liabilities(e)									1,713
Total derivative liabilities									$	2,976

Net fair value by FPL balance sheet line item:
Current other assets									$	13


Current other liabilities									$	9
Noncurrent other liabilities									1
Total derivative liabilities									$	10

———————————————

(b)Reflects the netting of approximately $150 million in margin cash collateral received from counterparties.

(c)Reflects the netting of approximately $56 million in margin cash collateral received from counterparties.

(d)Reflects the netting of approximately $6 million in margin cash collateral paid to counterparties.

(e)Reflects the netting of approximately $172 million in margin cash collateral paid to counterparties.

At September 30, 2022 and December 31, 2021, NEE had approximately $50 million (none at FPL) and $56 million (none at FPL), respectively, in margin cash collateral received from counterparties that was not offset against derivative assets in the above presentation. These amounts are included in current other liabilities on NEE's condensed consolidated balance sheets. Additionally, at September 30, 2022 and December 31, 2021, NEE had approximately $424 million (none at FPL) and $673 million (none at FPL), respectively, in margin cash collateral paid to counterparties that was not offset against derivative assets or liabilities in the above presentation. These amounts are included in current other assets on NEE's condensed consolidated balance sheets.

Significant Unobservable Inputs Used in Recurring Fair Value Measurements – The valuation of certain commodity contracts requires the use of significant unobservable inputs. All forward price, implied volatility, implied correlation and interest rate inputs used in the valuation of such contracts are directly based on third-party market data, such as broker quotes and exchange settlements, when that data is available. If third-party market data is not available, then industry standard methodologies are used to develop inputs that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Observable inputs, including some forward prices, implied volatilities and interest rates used for determining fair value are updated daily to reflect the best available market information. Unobservable inputs which are related to observable inputs, such as illiquid portions of forward price or volatility curves, are updated daily as well, using industry standard techniques such as interpolation and extrapolation, combining observable forward inputs supplemented by historical market and other relevant data. Other unobservable inputs, such as implied correlations, block-to-hourly price shaping, customer migration rates from full

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

requirements contracts and some implied volatility curves, are modeled using proprietary models based on historical data and industry standard techniques.

The significant unobservable inputs used in the valuation of NEE's commodity contracts categorized as Level 3 of the fair value hierarchy at September 30, 2022 are as follows:


	Fair Value at				Valuation	Significant				Weighted-
Transaction Type	September 30, 2022				Technique(s)	Unobservable Inputs	Range			average(a)
	Assets		Liabilities
	(millions)
Forward contracts – power	$	178	$	619	Discounted cash flow	Forward price (per MWh)	$(7)	—	$461	$51
Forward contracts – gas	330		323		Discounted cash flow	Forward price (per MMBtu)	$3	—	$35	$5
Forward contracts – congestion	50		12		Discounted cash flow	Forward price (per MWh)	$(24)	—	$25	$1
Options – power	79		1		Option models	Implied correlations	42%	—	89%	56%
						Implied volatilities	20%	—	225%	57%
Options – primarily gas	1,368		1,271		Option models	Implied correlations	42%	—	89%	56%
						Implied volatilities	24%	—	192%	63%
Full requirements and unit contingent contracts	129		1,583		Discounted cash flow	Forward price (per MWh)	$12	—	$512	$99
						Customer migration rate(b)	—%	—	122%	6%
Forward contracts – other	146		147
Total	$	2,280	$	3,956

———————————————

(a)Unobservable inputs were weighted by volume.

(b)Applies only to full requirements contracts.

The sensitivity of NEE's fair value measurements to increases (decreases) in the significant unobservable inputs is as follows:


Significant Unobservable Input	Position	Impact on Fair Value Measurement
Forward price	Purchase power/gas	Increase (decrease)
	Sell power/gas	Decrease (increase)
Implied correlations	Purchase option	Decrease (increase)
	Sell option	Increase (decrease)
Implied volatilities	Purchase option	Increase (decrease)
	Sell option	Decrease (increase)
Customer migration rate	Sell power(a)	Decrease (increase)

———————————————

(a)Assumes the contract is in a gain position.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The reconciliation of changes in the fair value of derivatives that are based on significant unobservable inputs is as follows:


	Three Months Ended September 30,
	2022				2021
	NEE		FPL		NEE		FPL
	(millions)
Fair value of net derivatives based on significant unobservable inputs at June 30	$	(1,594)	$	83	$	584	$	—
Realized and unrealized gains (losses):
Included in operating revenues	(695)		—		(1,138)		—

Included in regulatory assets and liabilities	92		92		1		1
Purchases	90		—		62		—
Settlements	482		(154)		80		(2)
Issuances	(57)		—		(52)		—


Transfers out(a)	6		—		15		—
Fair value of net derivatives based on significant unobservable inputs at September 30	$	(1,676)	$	21	$	(448)	$	(1)
Gains (losses) included in operating revenues attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date	$	(446)	$	—	$	(1,107)	$	—

———————————————

(a)Transfers from Level 3 to Level 2 were a result of increased observability of market data.


	Nine Months Ended September 30,
	2022				2021
	NEE		FPL		NEE		FPL
	(millions)
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior period	$	170	$	8	$	1,374	$	(1)
Realized and unrealized gains (losses):
Included in operating revenues	(3,215)		—		(1,795)		—

Included in regulatory assets and liabilities	161		161		2		2
Purchases	469		—		153		—

Settlements	1,043		(148)		(54)		(2)
Issuances	(289)		—		(116)		—

Transfers in(a)	—		—		1		—
Transfers out(a)	(15)		—		(13)		—
Fair value of net derivatives based on significant unobservable inputs at September 30	$	(1,676)	$	21	$	(448)	$	(1)
Gains (losses) included in operating revenues attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date	$	(2,081)	$	—	$	(1,581)	$	—

———————————————

(a)Transfers into Level 3 were a result of decreased observability of market data. Transfers from Level 3 to Level 2 were a result of increased observability of market data.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Income Statement Impact of Derivative Instruments – Gains (losses) related to NEE's derivatives are recorded in NEE's condensed consolidated statements of income as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(millions)

Commodity contracts(a) – operating revenues (including $10 unrealized losses, $1,236 unrealized losses, $2,942 unrealized losses and $2,563 unrealized losses, respectively)	$	(122)	$	(1,291)	$	(3,488)	$	(2,708)

Foreign currency contracts – interest expense (including $32 unrealized losses, $15 unrealized losses, $113 unrealized losses and $69 unrealized losses, respectively)	(36)		(13)		(121)		(69)

Interest rate contracts – interest expense (including $16 unrealized gains, $23 unrealized gains, $1,131 unrealized gains and $382 unrealized gains, respectively)	236		7		1,321		340
Losses reclassified from AOCI to interest expense:
Interest rate contracts	—		(1)		(5)		(4)
Foreign currency contracts	(1)		(1)		(2)		(2)
Total	$	77	$	(1,299)	$	(2,295)	$	(2,443)

———————————————

(a)For the three and nine months ended September 30, 2022, FPL recorded gains of approximately $131 million and $110 million, respectively, related to commodity contracts as regulatory liabilities on its condensed consolidated balance sheets. For the three and nine months ended September 30, 2021, FPL recorded gains of approximately $9 million and $13 million, respectively, related to commodity contracts as regulatory liabilities on its condensed consolidated balance sheets.

Notional Volumes of Derivative Instruments – The following table represents net notional volumes associated with derivative instruments that are required to be reported at fair value in NEE's and FPL's condensed consolidated financial statements. The table includes significant volumes of transactions that have minimal exposure to commodity price changes because they are variably priced agreements. These volumes are only an indication of the commodity exposure that is managed through the use of derivatives. They do not represent net physical asset positions or non-derivative positions and the related hedges, nor do they represent NEE’s and FPL’s net economic exposure, but only the net notional derivative positions that fully or partially hedge the related asset positions. NEE and FPL had derivative commodity contracts for the following net notional volumes:


	September 30, 2022				December 31, 2021
Commodity Type	NEE		FPL		NEE		FPL
	(millions)
Power	(660)	MWh	—		(103)	MWh	—
Natural gas	(1,467)	MMBtu	151	MMBtu	(1,290)	MMBtu	91	MMBtu
Oil	(38)	barrels	—		(33)	barrels	—

At September 30, 2022 and December 31, 2021, NEE had interest rate contracts with a notional amount of approximately $8.8 billion and $11.2 billion, respectively, and foreign currency contracts with a notional amount of approximately $1.0 billion and $1.0 billion, respectively. In October 2022, NEECH entered into a forward starting interest rate swap agreement with a notional amount of $10 billion to manage interest rate risk associated with forecasted debt issuances.

Credit*-Risk-*Related Contingent Features – Certain derivative instruments contain credit-risk-related contingent features including, among other things, the requirement to maintain an investment grade credit rating from specified credit rating agencies and certain financial ratios, as well as credit-related cross-default and material adverse change triggers. At September 30, 2022 and December 31, 2021, the aggregate fair value of NEE's derivative instruments with credit-risk-related contingent features that were in a liability position was approximately $9.0 billion ($21 million for FPL) and $4.1 billion ($12 million for FPL), respectively.

If the credit-risk-related contingent features underlying these derivative agreements were triggered, certain subsidiaries of NEE, including FPL, could be required to post collateral or settle contracts according to contractual terms which generally allow netting of contracts in offsetting positions. Certain derivative contracts contain multiple types of credit-related triggers. To the extent these contracts contain a credit ratings downgrade trigger, the maximum exposure is included in the following credit ratings collateral posting requirements. If FPL's and NEECH's credit ratings were downgraded to BBB/Baa2 (a three level downgrade for FPL and a one level downgrade for NEECH from the current lowest applicable rating), applicable NEE subsidiaries would be required to post collateral such that the total posted collateral would be approximately $2,250 million (none at FPL) at September 30, 2022 and $645 million (none at FPL) at December 31, 2021. If FPL's and NEECH's credit ratings were downgraded to below investment grade, applicable NEE subsidiaries would be required to post additional collateral such that the total posted collateral would be approximately $5.8 billion ($35 million at FPL) at September 30, 2022 and $2.7 billion ($35 million at FPL) at December 31, 2021. Some derivative contracts do not contain credit ratings downgrade triggers, but do contain provisions that require certain financial measures be maintained and/or have credit-related cross-default triggers. In the event

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

these provisions were triggered, applicable NEE subsidiaries could be required to post additional collateral of up to approximately $1.3 billion ($355 million at FPL) at September 30, 2022 and $1.0 billion ($145 million at FPL) at December 31, 2021.

Collateral related to derivatives may be posted in the form of cash or credit support in the normal course of business. At September 30, 2022 and December 31, 2021, applicable NEE subsidiaries have posted approximately $8 million (none at FPL) and $84 million (none at FPL), respectively, in cash, and $1.9 billion (none at FPL) and $1.1 billion (none at FPL), respectively, in the form of letters of credit, each of which could be applied toward the collateral requirements described above. FPL and NEECH have capacity under their credit facilities generally in excess of the collateral requirements described above that would be available to support, among other things, derivative activities. Under the terms of the credit facilities, maintenance of a specific credit rating is not a condition to drawing on these credit facilities, although there are other conditions to drawing on these credit facilities.

Additionally, some contracts contain certain adequate assurance provisions whereby a counterparty may demand additional collateral based on subjective events and/or conditions. Due to the subjective nature of these provisions, NEE and FPL are unable to determine an exact value for these items and they are not included in any of the quantitative disclosures above.

3. Non-Derivative Fair Value Measurements

Non-derivative fair value measurements consist of NEE’s and FPL’s cash equivalents and restricted cash equivalents, special use funds and other investments. The fair value of these financial assets is determined by using the valuation techniques and inputs as described in Note 2 – Fair Value Measurements of Derivative Instruments as well as below.

Cash Equivalents and Restricted Cash Equivalents – NEE and FPL hold investments in money market funds. The fair value of these funds is estimated using a market approach based on current observable market prices.

Special Use Funds and Other Investments – NEE and FPL hold primarily debt and equity securities directly, as well as indirectly through commingled funds. Substantially all directly held equity securities are valued at their quoted market prices. For directly held debt securities, multiple prices and price types are obtained from pricing vendors whenever possible, which enables cross-provider validations. A primary price source is identified based on asset type, class or issue of each security. Commingled funds, which are similar to mutual funds, are maintained by banks or investment companies and hold certain investments in accordance with a stated set of objectives. The fair value of commingled funds is primarily derived from the quoted prices in active markets of the underlying securities. Because the fund shares are offered to a limited group of investors, they are not considered to be traded in an active market.

Fair Value Measurement Alternative – NEE holds investments in equity securities without readily determinable fair values, which are initially recorded at cost, of approximately $415 million and $72 million at September 30, 2022 and December 31, 2021, respectively, and are included in noncurrent other assets on NEE's condensed consolidated balance sheets. Adjustments to carrying values are recorded as a result of observable price changes in transactions for identical or similar investments of the same issuer.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Recurring Non-Derivative Fair Value Measurements – NEE's and FPL's financial assets and other fair value measurements made on a recurring basis by fair value hierarchy level are as follows:


	September 30, 2022
	Level 1		Level 2			Level 3		Total
	(millions)
Assets:
Cash equivalents and restricted cash equivalents:(a)
NEE – equity securities	$	1,816	$	—		$	—	$	1,816
FPL – equity securities	$	1,189	$	—		$	—	$	1,189
Special use funds:(b)
NEE:
Equity securities	$	1,932	$	2,215	(c)	$	—	$	4,147
U.S. Government and municipal bonds	$	642	$	62		$	—	$	704
Corporate debt securities	$	6	$	760		$	—	$	766
Asset-backed securities	$	—	$	608		$	—	$	608
Other debt securities	$	—	$	19		$	—	$	19
FPL:
Equity securities	$	710	$	2,015	(c)	$	—	$	2,725
U.S. Government and municipal bonds	$	520	$	32		$	—	$	552
Corporate debt securities	$	5	$	576		$	—	$	581
Asset-backed securities	$	—	$	475		$	—	$	475
Other debt securities	$	—	$	9		$	—	$	9
Other investments:(d)
NEE:
Equity securities	$	31	$	1		$	—	$	32
Debt securities	$	125	$	191		$	124	$	440
FPL – equity securities	$	10	$	—		$	—	$	10

———————————————

(a)Includes restricted cash equivalents of approximately $55 million ($33 million for FPL) in current other assets on the condensed consolidated balance sheets.

(b)Excludes investments accounted for under the equity method and loans not measured at fair value on a recurring basis. See Fair Value of Financial Instruments Recorded at Other than Fair Value below.

(c)Primarily invested in commingled funds whose underlying securities would be Level 1 if those securities were held directly by NEE or FPL.

(d)Included in noncurrent other assets on NEE's and FPL's condensed consolidated balance sheets.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)


	December 31, 2021
	Level 1		Level 2			Level 3		Total
	(millions)
Assets:
Cash equivalents and restricted cash equivalents:(a)
NEE – equity securities	$	176	$	—		$	—	$	176
FPL – equity securities	$	58	$	—		$	—	$	58
Special use funds:(b)
NEE:
Equity securities	$	2,538	$	2,973	(c)	$	—	$	5,511
U.S. Government and municipal bonds	$	770	$	75		$	—	$	845
Corporate debt securities	$	7	$	955		$	—	$	962
Asset-backed securities	$	—	$	663		$	—	$	663
Other debt securities	$	2	$	33		$	—	$	35
FPL:
Equity securities	$	862	$	2,690	(c)	$	—	$	3,552
U.S. Government and municipal bonds	$	624	$	44		$	—	$	668
Corporate debt securities	$	6	$	720		$	—	$	726
Asset-backed securities	$	—	$	515		$	—	$	515
Other debt securities	$	2	$	23		$	—	$	25
Other investments:(d)
NEE:
Equity securities	$	70	$	2		$	—	$	72
Debt securities	$	111	$	162		$	12	$	285
FPL – equity securities	$	13	$	—		$	—	$	13

———————————————

(a)Includes restricted cash equivalents of approximately $56 million ($53 million for FPL) in current other assets on the condensed consolidated balance sheets.

(c)Primarily invested in commingled funds whose underlying securities would be Level 1 if those securities were held directly by NEE or FPL.

(d)Included in noncurrent other assets on NEE's and FPL's condensed consolidated balance sheets.

Contingent Consideration – At September 30, 2022, NEER had approximately $198 million of contingent consideration liabilities which are included in noncurrent other liabilities on NEE's condensed consolidated balance sheet. The liabilities relate to contingent consideration for the completion of capital expenditures for future development projects in connection with the acquisition of GridLiance Holdco, LP and GridLiance GP, LLC (GridLiance) (see Note 5 – GridLiance). NEECH guarantees the contingent consideration obligations under the GridLiance acquisition agreements. Significant inputs and assumptions used in the fair value measurement, some of which are Level 3 and require judgement, include the projected timing and amount of future cash flows, estimated probability of completing future development projects as well as discount rates.

Fair Value of Financial Instruments Recorded at Other than Fair Value – The carrying amounts of commercial paper and other short-term debt approximate their fair values. The carrying amounts and estimated fair values of other financial instruments recorded at other than fair value are as follows:


	September 30, 2022					December 31, 2021
	Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(millions)
NEE:
Special use funds(a)	$	951	$	951		$	906	$	907
Other receivables(b)	$	110	$	110		$	26	$	26
Long-term debt, including current portion	$	61,962	$	57,029	(c)	$	52,745	$	57,290	(c)
FPL:
Special use funds(a)	$	706	$	706		$	672	$	672
Long-term debt, including current portion	$	20,998	$	19,028	(c)	$	18,510	$	21,379	(c)

———————————————

(a)Primarily represents investments accounted for under the equity method and loans not measured at fair value on a recurring basis (Level 2).

(b)Included in noncurrent other assets on NEE's condensed consolidated balance sheets (primarily Level 3).

(c)At September 30, 2022 and December 31, 2021, substantially all is Level 2 for NEE and FPL.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Special Use Funds and Other Investments – The special use funds noted above and those carried at fair value (see Recurring Non-Derivative Fair Value Measurements above) consist of NEE's nuclear decommissioning fund assets of approximately $7,121 million ($4,974 million for FPL) and $8,846 million ($6,082 million for FPL) at September 30, 2022 and December 31, 2021, respectively, and FPL's storm fund assets of $74 million and $76 million at September 30, 2022 and December 31, 2021, respectively. The investments held in the special use funds and other investments consist of equity and available for sale debt securities which are primarily carried at estimated fair value. The amortized cost of debt securities is approximately $2,744 million ($1,853 million for FPL) and $2,438 million ($1,877 million for FPL) at September 30, 2022 and December 31, 2021, respectively. Debt securities included in the nuclear decommissioning funds have a weighted-average maturity at September 30, 2022 of approximately eight years at both NEE and FPL. FPL's storm fund primarily consists of debt securities with a weighted-average maturity at September 30, 2022 of approximately one year. Other investments consist of debt securities with a weighted-average maturity at September 30, 2022 of approximately seven years. The cost of securities sold is determined using the specific identification method.

For FPL's special use funds, changes in fair value of debt and equity securities, including any estimated credit losses of debt securities, result in a corresponding adjustment to the related regulatory asset or liability accounts, consistent with regulatory treatment. For NEE's non-rate regulated operations, changes in fair value of debt securities result in a corresponding adjustment to OCI, except for estimated credit losses and unrealized losses on debt securities intended or required to be sold prior to recovery of the amortized cost basis, which are recognized in other – net in NEE's condensed consolidated statements of income. Changes in fair value of equity securities are primarily recorded in change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds – net in NEE’s condensed consolidated statements of income.

Unrealized gains (losses) recognized on equity securities held at September 30, 2022 and 2021 are as follows:


	NEE								FPL
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021		2022		2021		2022		2021
	(millions)
Unrealized gains (losses)	$	(222)	$	(25)	$	(1,317)	$	565	$	(135)	$	(13)	$	(857)	$	375

Realized gains and losses and proceeds from the sale or maturity of available for sale debt securities are as follows:


	NEE								FPL
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021		2022		2021		2022		2021
	(millions)
Realized gains	$	8	$	17	$	26	$	61	$	6	$	14	$	20	$	46
Realized losses	$	41	$	14	$	100	$	58	$	36	$	11	$	79	$	46
Proceeds from sale or maturity of securities	$	681	$	245	$	1,901	$	1,303	$	324	$	191	$	1,001	$	988

The unrealized gains and unrealized losses on available for sale debt securities and the fair value of available for sale debt securities in an unrealized loss position are as follows:


	NEE				FPL
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
	(millions)
Unrealized gains	$	2	$	76	$	2	$	63
Unrealized losses(a)	$	342	$	19	$	239	$	15
Fair value	$	2,378	$	1,100	$	1,598	$	857

———————————————

(a) Unrealized losses on available for sale debt securities in an unrealized loss position for greater than twelve months at September 30, 2022 and December 31, 2021 were not material to NEE or FPL.

Regulations issued by the FERC and the NRC provide general risk management guidelines to protect nuclear decommissioning funds and to allow such funds to earn a reasonable return. The FERC regulations prohibit, among other investments, investments in any securities of NEE or its subsidiaries, affiliates or associates, excluding investments tied to market indices or mutual funds. Similar restrictions applicable to the decommissioning funds for NEER's nuclear plants are included in the NRC operating licenses for those facilities or in NRC regulations applicable to NRC licensees not in cost-of-service environments. With

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

respect to the decommissioning fund for Seabrook, decommissioning fund contributions and withdrawals are also regulated by the New Hampshire Nuclear Decommissioning Financing Committee pursuant to New Hampshire law.

The nuclear decommissioning reserve funds are managed by investment managers who must comply with the guidelines of NEE and FPL and the rules of the applicable regulatory authorities. The funds' assets are invested giving consideration to taxes, liquidity, risk, diversification and other prudent investment objectives.

Nonrecurring Fair Value Measurements – NEE tests its equity method investments for impairment whenever events or changes in circumstances indicate that the investment may be impaired. On February 2, 2022, the U.S. Court of Appeals for the Fourth Circuit (the 4th Circuit) vacated and remanded Mountain Valley Pipeline, LLC’s (Mountain Valley Pipeline) Biological Opinion issued by the U.S. Fish and Wildlife Service. While NextEra Energy Resources continues to evaluate options and next steps with its joint venture partners, this event along with the 4th Circuit vacatur and remand of the U.S. Forest Service right-of-way grant on January 25, 2022 caused NextEra Energy Resources to re-evaluate its investment in Mountain Valley Pipeline for further other-than-temporary impairment, which evaluation coincided with the preparation of NEE's December 31, 2021 financial statements. As a result of this evaluation, it was determined that the continued legal and regulatory challenges have resulted in a very low probability of pipeline completion. Accordingly, NextEra Energy Resources performed a fair value analysis based on the market approach to determine the amount of the impairment. The challenges to complete construction and the resulting economic outlook for the pipeline were considered in determining the magnitude of the other-than-temporary impairment. Based on this fair value analysis, NextEra Energy Resources recorded an impairment charge of approximately $0.8 billion ($0.6 billion after tax) during the first quarter of 2022, which is reflected in equity in earnings of equity method investees in NEE’s condensed consolidated statements of income for the nine months ended September 30, 2022. This impairment charge resulted in the complete write off of NextEra Energy Resources’ equity method investment carrying amount of approximately $0.6 billion, as well as the recording of a liability of approximately $0.2 billion which reflects NextEra Energy Resources’ share of estimated future dismantlement costs.

The fair value estimate was based on a probability-weighted earnings before interest, taxes, depreciation and amortization (EBITDA) multiple valuation technique using a market participant view of the potential different outcomes for the investment. As part of the valuation, NextEra Energy Resources used observable inputs where available, including the EBITDA multiples of recent pipeline transactions. Significant unobservable inputs (Level 3), including the probabilities assigned to the different potential outcomes, the forecasts of operating revenues and costs, and the projected capital expenditures to complete the project, were also used in the estimation of fair value. An increase in the revenue forecasts, a decrease in the projected operating or capital expenditures or an increase in the probability assigned to the full pipeline being completed would result in an increased fair market value. Changes in the opposite direction of those unobservable inputs would result in a decreased fair market value.

4. Income Taxes

NEE's effective income tax rate for the three months ended September 30, 2022 and 2021 was approximately 17.2% and (9.7)%, respectively, and for the nine months ended September 30, 2022 and 2021 was approximately 11.5% and 4.3%, respectively. NEE's effective income tax rate is based on the composition of pretax income, and, for the nine months ended September 30, 2022, primarily reflects the impact of favorable changes in the fair value of interest rate derivative instruments, unfavorable changes in the fair value of commodity derivatives and equity securities held in NEER's nuclear decommissioning funds, as well as the first quarter of 2022 impairment charge related to the investment in Mountain Valley Pipeline (see Note 3 – Nonrecurring Fair Value Measurements). NEE's effective income tax rate reflects the impact of unfavorable changes in the fair value of commodity derivatives for the three and nine months ended September 30, 2021.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

A reconciliation between the effective income tax rates and the applicable statutory rate is as follows:


	NEE				FPL				NEE				FPL
	Three Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021		2022		2021		2022		2021
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%
Increases (reductions) resulting from:
State income taxes – net of federal income tax benefit	1.7		5.4		4.5		2.9		1.3		1.0		4.4		3.7
Taxes attributable to noncontrolling interests	2.6		15.6		—		—		6.8		6.9		—		—
PTCs and ITCs	(4.7)		(38.9)		(1.9)		(0.7)		(9.4)		(16.4)		(1.1)		(0.7)
Amortization of deferred regulatory credit	(2.9)		(14.1)		(4.1)		(3.5)		(6.7)		(6.2)		(4.0)		(3.5)


Other – net	(0.5)		1.3		0.1		0.2		(1.5)		(2.0)		0.1		—
Effective income tax rate	17.2	%	(9.7)	%	19.6	%	19.9	%	11.5	%	4.3	%	20.4	%	20.5	%

NEE recognizes PTCs as wind and solar energy is generated and sold based on a per kWh rate prescribed in applicable federal and state statutes, which may differ significantly from amounts computed, on a quarterly basis, using an overall effective income tax rate anticipated for the full year. NEE uses this method of recognizing PTCs for specific reasons, including that PTCs are an integral part of the expected value of most wind and some solar projects and a fundamental component of such wind and solar projects' results of operations. PTCs, as well as ITCs, can significantly affect NEE's effective income tax rate depending on the amount of pretax income or loss. The amount of PTCs recognized can be significantly affected by wind and solar generation and by the roll off of PTCs after ten years of production absent a retrofitting of the wind and solar projects.

On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law which includes: (i) extensions for wind and solar tax credits on facilities that start construction before the later of 2034 or the end of the calendar year following the year in which greenhouse gas emissions from U.S. electric generation are reduced by 75% from 2022 levels; (ii) a new solar PTC and standalone battery ITC; (iii) the ability to transfer renewable energy tax credits to an unrelated transferee; and (iv) a 15% corporate profits minimum tax based on pre-tax income for years after 2022. This legislation does not require NEE or FPL to revalue their deferred income taxes given that there was no change to the corporate tax rate. Pursuant to FPL’s 2021 rate agreement (see Note 11 – Rate Regulation), FPL will prospectively adjust base rates after a review by the FPSC for PTCs related to new solar generation facilities recovered in base rates during the term of the 2021 rate agreement.

5. Acquisitions

Merger of FPL and Gulf Power Company – On January 1, 2021, FPL and Gulf Power Company merged, with FPL as the surviving entity. As a result of the merger, FPL acquired assets of approximately $6.7 billion, primarily relating to property, plant and equipment, net of approximately $4.9 billion and regulatory assets of $1.2 billion, and assumed liabilities of approximately $3.9 billion, including $1.8 billion of debt, primarily long-term debt, $729 million of deferred income taxes and $566 million of regulatory liabilities. Additionally, goodwill of approximately $2.7 billion and purchase accounting adjustments associated with the 2019 Gulf Power Company acquisition by NEE were transferred to FPL from Corporate and Other and, for impairment testing, the goodwill is included in the FPL reporting unit. The assets acquired and liabilities assumed by FPL were at carrying amounts as the merger was between entities under common control.

GridLiance – On March 31, 2021, a wholly owned subsidiary of NEET acquired GridLiance, which owns and operates three FERC-regulated transmission utilities with approximately 700 miles of high-voltage transmission lines across six states, five in the Midwest and Nevada. The purchase price included approximately $502 million in cash consideration, and the assumption of approximately $175 million of debt, excluding post-closing adjustments.

Under the acquisition method, the purchase price was allocated to the assets acquired and liabilities assumed based on their fair value. The approval by the FERC of GridLiance’s rates, which is intended to allow GridLiance to collect total revenues equal to GridLiance's costs for the development, financing, construction, operation and maintenance of GridLiance, including a reasonable rate of return on invested capital, is considered a fundamental input in measuring the fair value of GridLiance's assets and liabilities and, as such, NEE concluded that the carrying values of all assets and liabilities recoverable through rates are representative of their fair values. As a result, NEE acquired assets of approximately $384 million, primarily relating to property, plant and equipment, and assumed liabilities of approximately $210 million, primarily relating to long-term debt. The acquisition agreements are subject to earn-out provisions for additional payments, valued at approximately $264 million at March 31, 2021, to be made upon the completion of capital expenditures for future development projects (see Note 3 – Contingent Consideration). The excess of the purchase price over the fair value of assets acquired and liabilities assumed resulted in

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

approximately $592 million of goodwill which has been recognized on NEE's condensed consolidated balance sheets, of which approximately $586 million is expected to be deductible for tax purposes. Goodwill associated with the GridLiance acquisition is reflected within NEER and, for impairment testing, is included in the rate-regulated transmission reporting unit. The goodwill arising from the transaction represents expected benefits from continued expansion of NEE's regulated businesses.

RNG Acquisition – On October 27, 2022, a wholly owned subsidiary of NextEra Energy Resources entered into several agreements to acquire 100% of a portfolio of renewable energy projects from the owners of Energy Power Partners Fund I, L.P. and North American Sustainable Energy Fund, L.P., as well as the related service provider, for approximately $1.1 billion, subject to closing adjustments, plus the assumption of approximately $37 million of existing project finance debt estimated at the time of closing. The portfolio primarily consists of 31 biogas projects, one of which is an operating renewable natural gas facility and the others of which are primarily operating landfill gas-to-electric facilities. The acquisition is expected to close in early 2023, subject to receipt of required regulatory approvals including approvals from the FERC.

6. Related Party Transactions

NextEra Energy Resources provides operational, management and administrative services as well as transportation and fuel management services to NEP and its subsidiaries under various agreements (service agreements). NextEra Energy Resources is also party to a CSCS agreement with a subsidiary of NEP. At September 30, 2022 and December 31, 2021, the cash sweep amounts (due to NEP and its subsidiaries) held in accounts belonging to NextEra Energy Resources or its subsidiaries were approximately $65 million and $57 million, respectively, and are included in accounts payable. Fee income related to the CSCS agreement and the service agreements totaled approximately $45 million and $38 million for the three months ended September 30, 2022 and 2021, respectively, and $129 million and $108 million for the nine months ended September 30, 2022 and 2021, respectively, and is included in operating revenues in NEE's condensed consolidated statements of income. Amounts due from NEP of approximately $81 million and $113 million are included in other receivables and $38 million and $40 million are included in noncurrent other assets at September 30, 2022 and December 31, 2021, respectively. NEECH or NextEra Energy Resources guaranteed or provided indemnifications, letters of credit or surety bonds totaling approximately $2,513 million at September 30, 2022 primarily related to obligations on behalf of NEP's subsidiaries with maturity dates ranging from 2022 to 2059, including certain project performance obligations, obligations under financing and interconnection agreements and obligations, primarily incurred and future construction payables, associated with the December 2021 sale of projects to NEP (see Note 11 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests). Payment guarantees and related contracts with respect to unconsolidated entities for which NEE or one of its subsidiaries are the guarantor are recorded on NEE’s condensed consolidated balance sheets at fair value. At September 30, 2022, approximately $51 million related to the fair value of the credit support provided under the CSCS agreement is recorded as noncurrent other liabilities on NEE's condensed consolidated balance sheet.

During 2022 and 2021, certain services, primarily engineering, construction and maintenance services, were provided to subsidiaries of NEE by related parties that NEE accounts for under the equity method of accounting. Charges for these services amounted to approximately $136 million and $161 million for the three months ended September 30, 2022 and 2021, respectively, and $424 million and $464 million for the nine months ended September 30, 2022 and 2021, respectively.

See also Note 11 – Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests for sales to NEP.

7. Variable Interest Entities (VIEs)

NEER – At September 30, 2022, NEE consolidates a number of VIEs within the NEER segment. Subsidiaries within the NEER segment are considered the primary beneficiary of these VIEs since they control the most significant activities of these VIEs, including operations and maintenance, and they have the obligation to absorb expected losses of these VIEs.

Eight indirect subsidiaries of NextEra Energy Resources have an ownership interest ranging from approximately 50% to 67% in entities which own and operate solar generation facilities with the capability of producing a total of approximately 772 MW. Each of the subsidiaries is considered a VIE since the non-managing members have no substantive rights over the managing members, and is consolidated by NextEra Energy Resources. These entities sell their electric output to third parties under power sales contracts with expiration dates ranging from 2035 through 2052. These entities have third-party debt which is secured by liens against the assets of the entities. The debt holders have no recourse to the general credit of NextEra Energy Resources for the repayment of debt. The assets and liabilities of these VIEs were approximately $1,895 million and $1,157 million, respectively, at September 30, 2022, and $1,851 million and $1,258 million, respectively, at December 31, 2021. At September 30, 2022 and December 31, 2021, the assets and liabilities of these VIEs consisted primarily of property, plant and equipment and long-term debt.

NEE consolidates a NEET VIE that constructed an approximately 280-mile electric transmission line that went into service during the first quarter of 2022. A NEET subsidiary is the primary beneficiary and controls the most significant activities of the VIE. NEET is entitled to receive 50% of the profits and losses of the entity. The assets and liabilities of the VIE totaled approximately $736 million and $15 million, respectively, at September 30, 2022, and $614 million and $64 million, respectively, at

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

December 31, 2021. At September 30, 2022 and December 31, 2021, the assets of this VIE consisted primarily of property, plant and equipment.

NextEra Energy Resources consolidates a VIE which has a 10% direct ownership interest in wind and solar generation facilities which have the capability of producing approximately 400 MW and 599 MW, respectively. These entities sell their electric output under power sales contracts to third parties with expiration dates ranging from 2025 through 2040. These entities are also considered a VIE because the holders of differential membership interests in these entities do not have substantive rights over the significant activities of these entities. The assets and liabilities of the VIE were approximately $1,507 million and $88 million, respectively, at September 30, 2022, and $1,518 million and $79 million, respectively, at December 31, 2021. At September 30, 2022 and December 31, 2021, the assets of this VIE consisted primarily of property, plant and equipment.

NextEra Energy Resources consolidates 30 VIEs that primarily relate to certain subsidiaries which have sold differential membership interests in entities which own and operate wind generation as well as solar generation and solar generation plus battery storage facilities with the capability of producing a total of approximately 10,502 MW and 791 MW, respectively. These entities sell their electric output either under power sales contracts to third parties with expiration dates ranging from 2024 through 2053 or in the spot market. These entities are considered VIEs because the holders of differential membership interests do not have substantive rights over the significant activities of these entities. NextEra Energy Resources has financing obligations with respect to these entities, including third-party debt which is secured by liens against the generation facilities and the other assets of these entities or by pledges of NextEra Energy Resources' ownership interest in these entities. The debt holders have no recourse to the general credit of NEER for the repayment of debt. The assets and liabilities of these VIEs totaled approximately $16,113 million and $1,106 million, respectively, at September 30, 2022. There were 33 of these consolidated VIEs at December 31, 2021, and the assets and liabilities of those VIEs at such date totaled approximately $17,419 million and $1,480 million, respectively. At September 30, 2022 and December 31, 2021, the assets and liabilities of these VIEs consisted primarily of property, plant and equipment and accounts payable. At September 30, 2022, subsidiaries of NEE had guarantees related to certain obligations of one of these consolidated VIEs.

Other – At September 30, 2022 and December 31, 2021, several NEE subsidiaries had investments totaling approximately $3,806 million ($3,143 million at FPL) and $4,559 million ($3,799 million at FPL), respectively, which are included in special use funds and noncurrent other assets on NEE's condensed consolidated balance sheets and in special use funds on FPL's condensed consolidated balance sheets. These investments represented primarily commingled funds and asset-backed securities. NEE subsidiaries, including FPL, are not the primary beneficiaries and therefore do not consolidate any of these entities because they do not control any of the ongoing activities of these entities, were not involved in the initial design of these entities and do not have a controlling financial interest in these entities.

Certain subsidiaries of NEE have noncontrolling interests in entities accounted for under the equity method, including NEE's noncontrolling interest in NEP OpCo (see Note 6). These entities are limited partnerships or similar entity structures in which the limited partners or non-managing members do not have substantive rights over the significant activities of these entities, and therefore are considered VIEs. NEE is not the primary beneficiary because it does not have a controlling financial interest in these entities, and therefore does not consolidate any of these entities. NEE’s investment in these entities totaled approximately $4,926 million and $4,214 million at September 30, 2022 and December 31, 2021, respectively. At September 30, 2022 and December 31, 2021, subsidiaries of NEE had guarantees related to certain obligations of one of these entities, as well as commitments to invest an additional approximately $180 million and $110 million, respectively, in several of these entities. See further discussion of such guarantees and commitments in Note 12 – Commitments and – Contracts, respectively.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

8. Employee Retirement Benefits

NEE sponsors a qualified noncontributory defined benefit pension plan for substantially all employees of NEE and its subsidiaries and sponsors a contributory postretirement plan for other benefits for retirees of NEE and its subsidiaries meeting certain eligibility requirements.

The components of net periodic cost (income) for the plans are as follows:


	Pension Benefits				Postretirement Benefits				Pension Benefits				Postretirement Benefits
	Three Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021		2022		2021		2022		2021
	(millions)
Service cost	$	21	$	23	$	—	$	1	$	64	$	68	$	1	$	1
Interest cost	19		16		2		1		58		48		4		3
Expected return on plan assets	(90)		(85)		—		—		(271)		(255)		—		—

Amortization of actuarial loss	—		6		1		1		—		18		2		4
Amortization of prior service benefit	—		—		(1)		(4)		(1)		(1)		(3)		(11)
Special termination benefits(a)	—		—		—		—		52		—		—		—

Net periodic cost (income) at NEE	$	(50)	$	(40)	$	2	$	(1)	$	(98)	$	(122)	$	4	$	(3)
Net periodic cost (income) allocated to FPL	$	(33)	$	(27)	$	1	$	(1)	$	(60)	$	(81)	$	3	$	(3)

———————————————

(a) Reflects enhanced early retirement benefit.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

9. Debt

Significant long-term debt issuances and borrowings during the nine months ended September 30, 2022 were as follows:


	Principal Amount			Interest Rate						Maturity Date
	(millions)
FPL:
First mortgage bonds	$	1,500		2.45				%		2032
Senior unsecured notes	$	1,444		Variable					(a)	2024 – 2072

NEECH:
Debentures	$	5,375		2.94	%	–	5.00	%		2024	–	2062
Debentures	$	400		Variable					(a)	2024


Debentures, related to NEE's equity units	$	2,000		4.60				%		2027
Revolving credit facilities	$	850	(b)	Variable					(a)	2023

———————————————

(a)Variable rate is based on an underlying index plus or minus a specified margin.

(b)The borrowings occurred and were repaid during June 2022.

Subsidiaries of NEE, including FPL, had credit facilities with total capacity at September 30, 2022 of approximately $18.5 billion ($6.0 billion for FPL) which provide for the funding of loans and/or issuance of letters of credit. At September 30, 2022, letters of credit outstanding under these credit facilities totaled approximately $4.1 billion ($3.0 million for FPL). There were no borrowings outstanding under these credit facilities at September 30, 2022.

In August 2022, NEECH completed a remarketing of $1.5 billion aggregate principal amount of its Series J Debentures due September 1, 2024 that were issued in September 2019 as components of equity units issued concurrently by NEE (September 2019 equity units). The debentures are fully and unconditionally guaranteed by NEE. In connection with the remarketing of the debentures, the interest rate on the debentures was reset to 4.255% per year, and interest is payable on March 1 and September 1 of each year, commencing September 1, 2022. In connection with the settlement of the contracts to purchase NEE common stock that were issued as components of the September 2019 equity units, on September 1, 2022, NEE issued 21.6 million shares of common stock in exchange for $1.5 billion.

In September 2022, NEE sold $2.0 billion of equity units (initially consisting of Corporate Units). Each equity unit has a stated amount of $50 and consists of a contract to purchase NEE common stock (stock purchase contract) and, initially, a 5% undivided beneficial ownership interest in a Series M Debenture due September 1, 2027, issued in the principal amount of $1,000 by NEECH. Each stock purchase contract requires the holder to purchase by no later than September 1, 2025 (the final settlement date) for a price of $50 in cash, a number of shares of NEE common stock (subject to antidilution adjustments) based on a price per share range described in the following sentence. If purchased on the final settlement date, as of September 30, 2022, the number of shares issued per equity unit would (subject to antidilution adjustments) range from 0.5626 shares if the applicable market value of a share of NEE common stock is less than or equal to $88.88 (the reference price) to 0.4500 shares if the applicable market value of a share is equal to or greater than $111.10 (the threshold appreciation price), with the applicable market value to be determined using the average closing prices of NEE common stock over a 20-day trading period ending August 27, 2025. Total annual distributions on the equity units are at the rate of 6.926%, consisting of interest on the debentures (4.60% per year) and payments under the stock purchase contracts (2.326% per year). The interest rate on the debentures is expected to be reset on or after March 1, 2025. A holder of an equity unit may satisfy its purchase obligation with proceeds raised from remarketing the NEECH debentures that are part of its equity unit. The undivided beneficial ownership interest in the NEECH debenture that is a component of each Corporate Unit is pledged to NEE to secure the holder's obligation to purchase NEE common stock under the related stock purchase contract. If a successful remarketing does not occur on or before the third business day prior to the final settlement date, and a holder has not notified NEE of its intention to settle the stock purchase contract with cash, the debentures that are components of the Corporate Units will be used to satisfy in full the holders' obligations to purchase NEE common stock under the related stock purchase contracts on the final settlement date. The debentures are fully and unconditionally guaranteed by NEE.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

10. Equity

Earnings Per Share – The reconciliation of NEE's basic and diluted earnings per share attributable to NEE is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(millions, except per share amounts)

Numerator – net income attributable to NEE	$	1,696	$	447	$	2,625	$	2,369



Denominator:
Weighted-average number of common shares outstanding – basic	1,972.5		1,962.7		1,967.5		1,962.2
Equity units, stock options, performance share awards and restricted stock(a)	6.4		10.2		6.1		9.1
Weighted-average number of common shares outstanding – assuming dilution	1,978.9		1,972.9		1,973.6		1,971.3
Earnings per share attributable to NEE:
Basic	$	0.86	$	0.23	$	1.33	$	1.21
Assuming dilution	$	0.86	$	0.23	$	1.33	$	1.20

———————————————

(a)Calculated using the treasury stock method. Performance share awards are included in diluted weighted-average number of common shares outstanding based upon what would be issued if the end of the reporting period was the end of the term of the award.

Common shares issuable pursuant to equity units, stock options and/or performance share awards, as well as restricted stock which were not included in the denominator above due to their antidilutive effect were approximately 8.6 million and 1.2 million for the three months ended September 30, 2022 and 2021, respectively, and 42.6 million and 40.4 million for the nine months ended September 30, 2022 and 2021, respectively.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Accumulated Other Comprehensive Income (Loss) – The components of AOCI, net of tax, are as follows:


	Accumulated Other Comprehensive Income (Loss)
	Net Unrealized Gains (Losses) on Cash Flow Hedges		Net Unrealized Gains (Losses) on Available for Sale Securities			Defined Benefit Pension and Other Benefits Plans		Net Unrealized Gains (Losses) on Foreign Currency Translation		Other Comprehensive Income Related to Equity Method Investees		Total
	(millions)
Three months ended September 30, 2022
















Balances, June 30, 2022	$	19	$	(53)		$	25	$	(55)	$	5	$	(59)
Other comprehensive income (loss) before reclassifications	—		(31)			—		(49)		1		(79)
Amounts reclassified from AOCI	—		1		(a)	—		—		—		1
Net other comprehensive income (loss)	—		(30)			—		(49)		1		(78)
Less other comprehensive loss attributable to noncontrolling interests	—		—			—		23		—		23
Balances, September 30, 2022	$	19	$	(83)		$	25	$	(81)	$	6	$	(114)
Attributable to noncontrolling interests	$	—	$	—		$	—	$	(21)	$	—	$	(21)


	Accumulated Other Comprehensive Income (Loss)
	Net Unrealized Gains (Losses) on Cash Flow Hedges			Net Unrealized Gains (Losses) on Available for Sale Securities			Defined Benefit Pension and Other Benefits Plans		Net Unrealized Gains (Losses) on Foreign Currency Translation		Other Comprehensive Income Related to Equity Method Investees		Total
	(millions)
Nine months ended September 30, 2022
Balances, December 31, 2021	$	14		$	5		$	25	$	(49)	$	5	$	—
Other comprehensive income (loss) before reclassifications	—			(91)			—		(58)		1		(148)
Amounts reclassified from AOCI	5		(b)	3		(a)	—		—		—		8
Net other comprehensive income (loss)	5			(88)			—		(58)		1		(140)
Less other comprehensive loss attributable to noncontrolling interests	—			—			—		26		—		26
Balances, September 30, 2022	$	19		$	(83)		$	25	$	(81)	$	6	$	(114)
Attributable to noncontrolling interests	$	—		$	—		$	—	$	(21)	$	—	$	(21)

———————————————

(a)Reclassified to gains on disposal of investments and other property – net in NEE's condensed consolidated statements of income.

(b)Reclassified to interest expense in NEE's condensed consolidated statements of income. See Note 2 – Income Statement Impact of Derivative Instruments.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)


	Accumulated Other Comprehensive Income (Loss)
	Net Unrealized Gains (Losses) on Cash Flow Hedges		Net Unrealized Gains (Losses) on Available for Sale Securities			Defined Benefit Pension and Other Benefits Plans			Net Unrealized Gains (Losses) on Foreign Currency Translation		Other Comprehensive Income Related to Equity Method Investees		Total
	(millions)
Three Months Ended September 30, 2021
Balances, June 30, 2021	$	12	$	11		$	(73)		$	(39)	$	4	$	(85)
Other comprehensive income (loss) before reclassifications	—		(2)			—			(13)		1		(14)
Amounts reclassified from AOCI	—		(1)		(a)	1		(b)	—		—		—
Net other comprehensive income (loss)	—		(3)			1			(13)		1		(14)
Less other comprehensive loss attributable to noncontrolling interests	—		—			—			5		—		5
Balances, September 30, 2021	$	12	$	8		$	(72)		$	(47)	$	5	$	(94)
Attributable to noncontrolling interests	$	—	$	—		$	—		$	(8)	$	—	$	(8)


	Accumulated Other Comprehensive Income (Loss)
	Net Unrealized Gains (Losses) on Cash Flow Hedges			Net Unrealized Gains (Losses) on Available for Sale Securities			Defined Benefit Pension and Other Benefits Plans			Net Unrealized Gains (Losses) on Foreign Currency Translation		Other Comprehensive Income Related to Equity Method Investees		Total
	(millions)
Nine Months Ended September 30, 2021
Balances, December 31, 2020	$	8		$	20		$	(75)		$	(49)	$	4	$	(92)
Other comprehensive income (loss) before reclassifications	—			(9)			—			2		1		(6)
Amounts reclassified from AOCI	4		(c)	(3)		(a)	3		(b)	—		—		4
Net other comprehensive income (loss)	4			(12)			3			2		1		(2)

Balances, September 30, 2021	$	12		$	8		$	(72)		$	(47)	$	5	$	(94)
Attributable to noncontrolling interests	$	—		$	—		$	—		$	(8)	$	—	$	(8)

———————————————

(a)Reclassified to gains on disposal of investments and other property – net in NEE's condensed consolidated statements of income.

(b)Reclassified to other net periodic benefit income in NEE's condensed consolidated statements of income.

(c)Reclassified to interest expense in NEE's condensed consolidated statements of income. See Note 2 – Income Statement Impact of Derivative Instruments.

11. Summary of Significant Accounting and Reporting Policies

Rate Regulation – FPL's 2021 rate agreement provides that in the event the average 30-year U.S. Treasury rate is 2.49% or greater over a consecutive six-month period, FPL is authorized to increase the regulatory ROE to 10.80% with a range of 9.80% to 11.80%. During August 2022, this provision was triggered and effective September 1, 2022, FPL's authorized regulatory ROE and ROE range were increased. The increase in FPL's authorized regulatory ROE does not impact current base rates.

FPL’s 2021 rate agreement also provides that in the event federal or state permanent corporate income tax changes become effective during the term of the rate agreement, FPL will prospectively adjust base rates after a review by the FPSC. As a result of the enactment of the IRA (see Note 4), FPL is now eligible for PTCs related to solar projects that entered service beginning in 2022, which results in a greater tax benefit, and consequently, greater customer savings. Thus, FPL filed a petition with the FPSC in September 2022 requesting approval for a $25 million refund to customers through a one-time reduction in the capacity cost recovery clause in the month of January 2023 and a decrease in annualized retail base revenues of approximately $70 million beginning January 1, 2023.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Storm Reserve Deficit – In late September 2022, Hurricane Ian, which made landfall on the west coast of Florida near Fort Myers and exited on the east coast of Florida near Melbourne, caused extensive damage particularly in the southwest portion of FPL’s service territory and resulted in approximately 2.1 million customers experiencing electrical outages. As of October 7, 2022, essentially all customers that were able to accept electrical service had their service restored. Damage to FPL property was primarily to the transmission and distribution systems. Although FPL has not finalized its storm restoration costs associated with Hurricane Ian, FPL's preliminary estimate of recoverable storm restoration costs is approximately $1.1 billion. Prior to Hurricane Ian, FPL's storm reserve had a balance of approximately $220 million. At September 30, 2022, the estimated recoverable Hurricane Ian storm restoration costs exceeded the balance of the storm reserve by approximately $900 million. This deficit has been recorded by FPL as a noncurrent regulatory asset on NEE’s and FPL’s September 30, 2022 condensed consolidated balance sheet. Pursuant to FPL's 2021 rate agreement, storm restoration costs, plus an additional approximately $220 million to replenish the storm reserve, are recoverable from customers through a surcharge on an interim basis beginning 60 days from the filing of a cost recovery petition, but capped at an amount that produces a surcharge of no more than $4 for every 1,000 kWh of usage on residential bills during the first 12 months of cost recovery. Any additional costs would be eligible for recovery in subsequent years. If storm restoration costs exceed $800 million in any given calendar year, FPL may request an increase to the $4 surcharge. FPL is currently evaluating the timing and amount of the surcharge. The final storm restoration costs are subject to a prudence review by the FPSC. The unpaid portion of the storm restoration costs at September 30, 2022, of approximately $1.3 billion, including estimated capital costs, is included in other current liabilities on NEE’s and FPL’s condensed consolidated balance sheet.

Restricted Cash – At September 30, 2022 and December 31, 2021, NEE had approximately $1,459 million ($33 million for FPL) and $677 million ($53 million for FPL), respectively, of restricted cash, which is included in current other assets on NEE's and FPL's condensed consolidated balance sheets. Restricted cash is primarily related to debt service payments and margin cash collateral requirements at NEER and bond proceeds held for construction at FPL. In addition, where offsetting positions exist, restricted cash related to margin cash collateral of $261 million is netted against derivative assets and $1,258 million is netted against derivative liabilities at September 30, 2022 and $121 million is netted against derivative assets and $172 million is netted against derivative liabilities at December 31, 2021. See Note 2.

Disposal of Businesses/Assets and Sale of Noncontrolling Ownership Interests – In September 2022, subsidiaries of NextEra Energy Resources completed the sale to a NEP subsidiary of a 67% controlling ownership interest in a battery storage facility in California with storage capacity of 230 MW, for cash proceeds of approximately $191 million, plus working capital and other adjustments of $3 million (subject to post-closing adjustments). A NextEra Energy Resources affiliate will continue to operate the facility included in the sale. In connection with the sale, a gain of approximately $87 million ($66 million after tax) was recorded in NEE's condensed consolidated statements of income for the three and nine months ended September 30, 2022 and is included in gains on disposal of businesses/assets – net.

In December 2021, subsidiaries of NextEra Energy Resources sold their 100% ownership interest, comprised of a 50% controlling ownership interest to a NEP subsidiary and a 50% noncontrolling ownership interest to a third party, in a portfolio of seven wind generation facilities and six solar generation facilities representing a total generating capacity of 2,520 MW and 115 MW of battery storage capacity, three of which facilities were under construction. In connection with the three facilities that were under construction, approximately $668 million of cash received, which was subject to post-closing adjustments, was recorded as contract liabilities, which was included in current other liabilities on NEE’s condensed consolidated balance sheet at December 31, 2021. The three facilities achieved commercial operations during the first quarter of 2022 and approximately $551 million of contract liabilities were reversed and the sale of those facilities was recognized for accounting purposes. During the three months ended September 30, 2022, the IRA was enacted establishing a solar PTC (see Note 4) which substantially resolved the outstanding contingencies. Approximately $88 million of contract liabilities were reversed and a gain was recorded in NEE's condensed consolidated statements of income for the three and nine months ended September 30, 2022 which is included in gains on disposal of businesses/assets – net. The remaining contingencies are expected to be resolved in the fourth quarter of 2022. In addition, NextEra Energy Resources is responsible to pay for all construction costs related to the portfolio. At September 30, 2022 and December 31, 2021, approximately $142 million and $970 million, respectively, is included in accounts payable on NEE's condensed consolidated balance sheets and represents amounts owed by NextEra Energy Resources to NEP to reimburse NEP for construction costs.

Credit Losses – NEE's credit department monitors current and forward credit exposure to counterparties and their affiliates. Prospective and existing customers are reviewed for creditworthiness based on established standards and credit quality indicators. Credit quality indicators and standards that are closely monitored include credit ratings, certain financial ratios and delinquency trends which are based off the latest available information. Customers not meeting minimum standards provide various credit enhancements or secured payment terms, such as letters of credit, the posting of margin cash collateral or use of master netting arrangements.

For the nine months ended September 30, 2022 and 2021, NEE recorded approximately $85 million and $143 million of bad debt expense, including credit losses, respectively, which are included in O&M expenses in NEE’s condensed consolidated statements of income. The amounts recorded in 2021 primarily relate to credit losses at NEER driven by the operational and energy market impacts of the February 2021 weather event. The estimate for credit losses related to the impacts of the February 2021 weather event was developed based on NEE’s assessment of the ultimate collectability of these receivables under

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

potential workout scenarios. At December 31, 2021, approximately $127 million of allowances were included in noncurrent other assets on NEE's condensed consolidated balance sheets related to the February 2021 weather event. During the three months ended June 30, 2022, the net receivable was settled.

Property Plant and Equipment – Property, plant and equipment consists of the following:


	NEE				FPL
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
	(millions)
Electric plant in service and other property	$	121,700	$	112,500	$	72,811	$	67,771
Nuclear fuel	1,569		1,606		1,118		1,170
Construction work in progress	15,961		14,141		6,055		6,326
Property, plant and equipment, gross	139,230		128,247		79,984		75,267
Accumulated depreciation and amortization	(30,783)		(28,899)		(17,772)		(17,040)
Property, plant and equipment – net	$	108,447	$	99,348	$	62,212	$	58,227

During the three months ended September 30, 2022 and 2021, FPL recorded AFUDC of approximately $25 million and $46 million, respectively, including AFUDC – equity of approximately $19 million and $35 million, respectively. During the nine months ended September 30, 2022 and 2021, FPL recorded AFUDC of approximately $106 million and $124 million, respectively, including AFUDC – equity of approximately $82 million and $93 million, respectively. During the three months ended September 30, 2022 and 2021, NEER capitalized interest on construction projects of approximately $46 million and $42 million, respectively. During the nine months ended September 30, 2022 and 2021, NEER capitalized interest on construction projects of approximately $119 million and $104 million, respectively.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

12. Commitments and Contingencies

Commitments – NEE and its subsidiaries have made commitments in connection with a portion of their projected capital expenditures. Capital expenditures at FPL include, among other things, the cost for construction of additional facilities and equipment to meet customer demand, as well as capital improvements to and maintenance of existing facilities. At NEER, capital expenditures include, among other things, the cost, including capitalized interest, for development, construction and maintenance of its competitive energy businesses. Also see Note 3 – Contingent Consideration.

At September 30, 2022, estimated capital expenditures, on an accrual basis, for the remainder of 2022 through 2026 were as follows:


	Remainder of 2022		2023		2024		2025		2026		Total
	(millions)
FPL:
Generation:(a)
New(b)	$	985	$	2,350	$	2,180	$	1,010	$	1,045	$	7,570
Existing	770		1,655		1,255		1,330		1,670		6,680
Transmission and distribution(c)	960		4,260		4,150		5,235		5,520		20,125
Nuclear fuel	90		125		160		200		200		775
General and other	290		675		655		615		660		2,895
Total	$	3,095	$	9,065	$	8,400	$	8,390	$	9,095	$	38,045
NEER:(d)
Wind(e)	$	780	$	670	$	375	$	35	$	30	$	1,890
Solar(f)	1,400		2,690		670		5		—		4,765
Battery storage	190		540		—		—		5		735
Nuclear, including nuclear fuel	95		170		215		220		230		930

Rate-regulated transmission	55		150		65		45		10		325
Other	135		390		155		100		85		865
Total	$	2,655	$	4,610	$	1,480	$	405	$	360	$	9,510

———————————————

(a)Includes AFUDC of approximately $20 million, $90 million, $90 million, $45 million and $35 million for the remainder of 2022 through 2026, respectively.

(b)Includes land, generation structures, transmission interconnection and integration and licensing.

(c)Includes AFUDC of approximately $30 million, $60 million, $50 million, $30 million and $0 million for the remainder of 2022 through 2026, respectively.

(d)Represents capital expenditures for which applicable internal approvals and also, if required, regulatory approvals have been received.

(e)Consists of capital expenditures for new wind projects and repowering of existing wind projects totaling approximately 4,034 MW, and related transmission.

(f)Includes capital expenditures for new solar projects (including solar plus battery storage projects) totaling approximately 5,842 MW and related transmission.

The above estimates are subject to continuing review and adjustment and actual capital expenditures may vary significantly from these estimates. For example, the timing and ultimate cost associated with solar and battery storage capital expenditures may vary due to supply chain disruptions from Southeast Asian locations.

In addition to guarantees noted in Note 6 with regards to NEP, NEECH has guaranteed or provided indemnifications or letters of credit related to third parties, including certain obligations of investments in joint ventures accounted for under the equity method, totaling approximately $502 million at September 30, 2022. These obligations primarily related to guaranteeing the residual value of certain financing leases. Payment guarantees and related contracts with respect to unconsolidated entities for which NEE or one of its subsidiaries are the guarantor are recorded at fair value and are included in noncurrent other liabilities on NEE’s condensed consolidated balance sheets. Management believes that the exposure associated with these guarantees is not material.

Contracts – In addition to the commitments made in connection with the estimated capital expenditures included in the table in Commitments above, FPL has firm commitments under long-term contracts primarily for the transportation of natural gas with expiration dates through 2042.

At September 30, 2022, NEER has entered into contracts with expiration dates through 2033 primarily for the purchase of wind turbines, wind towers and solar modules and related construction and development activities, as well as for the supply of uranium, and the conversion, enrichment and fabrication of nuclear fuel. Approximately $3.6 billion of related commitments are included in the estimated capital expenditures table in Commitments above. In addition, NEER has contracts primarily for the transportation and storage of natural gas with expiration dates through 2040.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The required capacity and/or minimum payments under contracts, including those discussed above, at September 30, 2022 were estimated as follows:


	Remainder of 2022		2023		2024		2025		2026		Thereafter
	(millions)
FPL(a)	$	270	$	985	$	950	$	925	$	915	$	8,860

NEER(b)(c)(d)	$	1,160	$	2,235	$	585	$	115	$	80	$	545

———————————————

(a)Includes approximately $105 million, $410 million, $410 million, $405 million, $400 million and $5,960 million for the remainder of 2022 through 2026 and thereafter, respectively, of firm commitments related to the natural gas transportation agreements with Sabal Trail and Florida Southeast Connection. The charges associated with these agreements are recoverable through the fuel clause. For the three and nine months ended September 30, 2022, the charges associated with these agreements totaled approximately $104 million and $314 million, respectively, of which $26 million and $77 million, respectively, were eliminated in consolidation at NEE. For the three and nine months ended September 30, 2021, the charges associated with these agreements totaled approximately $105 million and $314 million, respectively, of which $26 million and $79 million, respectively, were eliminated in consolidation at NEE.

(b)Excludes commitments related to equity contributions and a 20-year natural gas transportation agreement (approximately $70 million per year) with a joint venture, in which NEER has a 31.9% equity investment, that is constructing a natural gas pipeline. These commitments are subject to the completion of construction of the pipeline which has a very low probability of completion. See Note 3 – Nonrecurring Fair Value Measurements.

(c)Includes approximately $230 million of commitments to invest in technology and other investments through 2031. See Note 7 – Other.

(d)Includes approximately $120 million, $710 million, $360 million, $65 million, $0 million and $5 million for the remainder of 2022 through 2026 and thereafter, respectively, of joint obligations of NEECH and NEER.

Insurance – Liability for accidents at nuclear power plants is governed by the Price-Anderson Act, which limits the liability of nuclear reactor owners to the amount of insurance available from both private sources and an industry retrospective payment plan. In accordance with this Act, NEE maintains $450 million of private liability insurance per site, which is the maximum obtainable, except at Duane Arnold which obtained an exemption from the NRC and maintains a $100 million private liability insurance limit. Each site, except Duane Arnold, participates in a secondary financial protection system, which provides up to $13.2 billion of liability insurance coverage per incident at any nuclear reactor in the U.S. Under the secondary financial protection system, NEE is subject to retrospective assessments of up to $963 million ($550 million for FPL), plus any applicable taxes, per incident at any nuclear reactor in the U.S., payable at a rate not to exceed $143 million ($82 million for FPL) per incident per year. NextEra Energy Resources and FPL are contractually entitled to recover a proportionate share of such assessments from the owners of minority interests in Seabrook and St. Lucie Unit No. 2, which approximates $16 million and $20 million, plus any applicable taxes, per incident, respectively.

NEE participates in a nuclear insurance mutual company that provides $2.75 billion of limited insurance coverage per occurrence per site for property damage, decontamination and premature decommissioning risks at its nuclear plants and a sublimit of $1.5 billion for non-nuclear perils, except for Duane Arnold which has a limit of $50 million for property damage, decontamination risks and non-nuclear perils. NEE participates in co-insurance of 10% of the first $400 million of losses per site per occurrence, except at Duane Arnold. The proceeds from such insurance, however, must first be used for reactor stabilization and site decontamination before they can be used for plant repair. NEE also participates in an insurance program that provides limited coverage for replacement power costs if a nuclear plant is out of service for an extended period of time because of an accident. In the event of an accident at one of NEE's or another participating insured's nuclear plants, NEE could be assessed up to $158 million ($101 million for FPL), plus any applicable taxes, in retrospective premiums in a policy year. NextEra Energy Resources and FPL are contractually entitled to recover a proportionate share of such assessments from the owners of minority interests in Seabrook, Duane Arnold and St. Lucie Unit No. 2, which approximates $2 million, $2 million and $4 million, plus any applicable taxes, respectively.

Due to the high cost and limited coverage available from third-party insurers, NEE does not have property insurance coverage for a substantial portion of either its transmission and distribution property or natural gas pipeline assets. If FPL's storm restoration costs exceed the storm reserve, such storm restoration costs may be recovered, subject to prudence review by the FPSC, through surcharges approved by the FPSC or through securitization provisions pursuant to Florida law.

In the event of a loss, the amount of insurance available might not be adequate to cover property damage and other expenses incurred. Uninsured losses and other expenses, to the extent not recovered from customers in the case of FPL, would be borne by NEE and FPL, and could have a material adverse effect on NEE's and FPL's financial condition, results of operations and liquidity.

13. Segment Information

The tables below present information for NEE's two reportable segments, FPL, a rate-regulated utility business, and NEER, which is comprised of competitive energy and rate-regulated transmission businesses. Corporate and Other represents other business activities, includes eliminating entries, and may include the net effect of rounding. Effective January 1, 2022, FPL became regulated as one ratemaking entity with new unified rates and tariffs, and became one reportable segment at NEE. As a result, the previous segments known as the FPL segment and Gulf Power are no longer separate reportable segments. Prior year period amounts for FPL and Corporate and Other were retrospectively adjusted to reflect this segment change.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Concluded)

(unaudited)

NEE's segment information is as follows:


	Three Months Ended September 30,
	2022									2021
	FPL		NEER(a)			Corporate and Other		NEE Consoli- dated		FPL		NEER(a)			Corporate and Other		NEE Consoli- dated
								(millions)
Operating revenues	$	5,075	$	1,652		$	(8)	$	6,719	$	4,134	$	258		$	(22)	$	4,370
Operating expenses – net	$	3,568	$	1,341		$	119	$	5,028	$	2,868	$	1,093		$	43	$	4,004
Gains (losses) on disposal of businesses/assets – net	$	—	$	173		$	(2)	$	171	$	—	$	12		$	1	$	13
Net loss attributable to noncontrolling interests	$	—	$	137		$	—	$	137	$	—	$	143		$	—	$	143
Net income (loss) attributable to NEE	$	1,074	$	655	(b)	$	(33)	$	1,696	$	927	$	(428)	(b)	$	(52)	$	447


	Nine Months Ended September 30,
	2022										2021
	FPL			NEER(a)			Corporate and Other		NEE Consoli- dated		FPL			NEER(a)			Corporate and Other		NEE Consoli- dated
									(millions)
Operating revenues	$	13,211		$	1,627		$	(46)	$	14,792	$	10,673		$	1,420		$	(70)	$	12,023
Operating expenses – net	$	9,060	(c)	$	3,712		$	181	$	12,953	$	7,064	(c)	$	3,289		$	132	$	10,485
Gains (losses) on disposal of businesses/assets – net	$	1		$	208		$	(13)	$	196	$	1		$	25		$	(6)	$	20
Net loss attributable to noncontrolling interests	$	—		$	646		$	—	$	646	$	—		$	495		$	—	$	495
Net income (loss) attributable to NEE	$	2,939		$	(711)	(b)	$	397	$	2,625	$	2,586		$	(252)	(b)	$	35	$	2,369

———————————————

(a)Interest expense allocated from NEECH to NextEra Energy Resources' subsidiaries is based on a deemed capital structure of 70% debt and differential membership interests sold by NextEra Energy Resources' subsidiaries. Residual NEECH corporate interest expense is included in Corporate and Other.

(b)See Note 4 for a discussion of NEER's tax benefits related to PTCs.

(c)FPL's income statement line for total operating expenses – net includes gains (losses) on disposal of businesses/assets – net.


	September 30, 2022								December 31, 2021
	FPL		NEER		Corporate and Other		NEE Consoli- dated		FPL		NEER		Corporate and Other		NEE Consoli- dated
							(millions)
Total assets	$	85,153	$	69,854	$	1,402	$	156,409	$	78,067	$	62,113	$	732	$	140,912

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