Item 1. Financial Statements

177K characters. Original on sec.gov · Markdown

Item 1. Financial Statements

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(millions, except per share amounts)

(unaudited)


	Three Months Ended March 31,
		2023		2022
OPERATING REVENUES		$	6,716	$	2,890
OPERATING EXPENSES
Fuel, purchased power and interchange		1,367		1,366
Other operations and maintenance		1,067		959



Depreciation and amortization		822		885
Taxes other than income taxes and other – net		516		478
Total operating expenses – net		3,772		3,688
GAINS (LOSSES) ON DISPOSAL OF BUSINESSES/ASSETS – NET		(2)		23
OPERATING INCOME (LOSS)		2,942		(775)
OTHER INCOME (DEDUCTIONS)
Interest expense		(1,183)		142

Equity in earnings (losses) of equity method investees		101		(453)
Allowance for equity funds used during construction		31		37


Gains (Losses) on disposal of investments and other property – net		(4)		18
Change in unrealized gains (losses) on equity securities held in NEER's nuclear decommissioning funds – net		94		(136)
Other net periodic benefit income		60		70
Other – net		130		45
Total other deductions – net		(771)		(277)
INCOME (LOSS) BEFORE INCOME TAXES		2,171		(1,052)
INCOME TAX EXPENSE (BENEFIT)		386		(359)
NET INCOME (LOSS)		1,785		(693)
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS		301		242
NET INCOME (LOSS) ATTRIBUTABLE TO NEE		$	2,086	$	(451)
Earnings (loss) per share attributable to NEE:
Basic		$	1.04	$	(0.23)
Assuming dilution		$	1.04	$	(0.23)

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2022 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(millions)

(unaudited)


	Three Months Ended March 31,
		2023		2022
NET INCOME (LOSS)		$	1,785	$	(693)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Reclassification of unrealized losses on cash flow hedges from accumulated other comprehensive income (loss) to net income (loss) (net of $0 tax benefit and $1 tax benefit, respectively)		1		4
Net unrealized gains (losses) on available for sale securities:
Net unrealized gains (losses) on securities still held (net of $3 tax expense and $11 tax benefit, respectively)		9		(30)
Reclassification from accumulated other comprehensive income (loss) to net income (loss) (net of $1 tax benefit and $0 tax expense, respectively)		5		—
Defined benefit pension and other benefits plans:

Reclassification from accumulated other comprehensive income (loss) to net income (loss) (net of $0 tax benefit and $0 tax expense, respectively)		1		—
Net unrealized gains on foreign currency translation		3		12

Total other comprehensive income (loss), net of tax		19		(14)


COMPREHENSIVE INCOME (LOSS)		1,804		(707)
COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS		300		236
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NEE		$	2,104	$	(471)

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2022 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions, except par value)

(unaudited)


	March 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	2,275	$	1,601
Customer receivables, net of allowances of $33 and $54, respectively	3,275		4,349
Other receivables	657		744
Materials, supplies and fuel inventory	1,915		1,934
Regulatory assets	2,428		2,165
Derivatives	1,682		1,590

Other	1,317		1,107
Total current assets	13,549		13,490
Other assets:
Property, plant and equipment – net ($23,072 and $22,927 related to VIEs, respectively)	114,929		111,059
Special use funds	7,862		7,496
Investment in equity method investees	7,004		6,582
Prepaid benefit costs	1,881		1,832
Regulatory assets	6,058		5,992
Derivatives	1,910		1,935
Goodwill	5,184		4,854
Other	6,980		5,695
Total other assets	151,808		145,445
TOTAL ASSETS	$	165,357	$	158,935
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Commercial paper	$	2,843	$	1,709
Other short-term debt	1,868		1,368
Current portion of long-term debt ($59 and $61 related to VIEs, respectively)	6,923		6,633
Accounts payable ($974 and $1,250 related to VIEs, respectively)	6,499		8,312
Customer deposits	583		560
Accrued interest and taxes	951		719
Derivatives	1,512		2,102
Accrued construction-related expenditures	1,456		1,760
Regulatory liabilities	359		350

Other	2,383		3,182
Total current liabilities	25,377		26,695
Other liabilities and deferred credits:
Long-term debt ($1,089 and $1,108 related to VIEs, respectively)	59,007		55,256
Asset retirement obligations	3,285		3,245
Deferred income taxes	9,468		9,072
Regulatory liabilities	9,775		9,626
Derivatives	2,488		2,909

Other	2,978		2,696
Total other liabilities and deferred credits	87,001		82,804
TOTAL LIABILITIES	112,378		109,499
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS – VIE	856		1,110
EQUITY
Common stock ($0.01 par value, authorized shares – 3,200; outstanding shares – 2,023 and 1,987, respectively)	20		20
Additional paid-in capital	15,214		12,720
Retained earnings	27,862		26,707
Accumulated other comprehensive loss	(200)		(218)
Total common shareholders' equity	42,896		39,229
Noncontrolling interests ($9,113 and $9,092 related to VIEs, respectively)	9,227		9,097
TOTAL EQUITY	52,123		48,326
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	$	165,357	$	158,935

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2022 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions)

(unaudited)


	Three Months Ended March 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	1,785	$	(693)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	822		885
Nuclear fuel and other amortization	71		75

Unrealized losses (gains) on marked to market derivative contracts – net	(610)		1,634

Foreign currency transaction gains	(2)		(20)
Deferred income taxes	349		(14)
Cost recovery clauses and franchise fees	263		(12)


Equity in losses (earnings) of equity method investees	(101)		453
Distributions of earnings from equity method investees	217		120
Losses (gains) on disposal of businesses, assets and investments – net	6		(41)
Recoverable storm-related costs	(188)		—
Other – net	(222)		54
Changes in operating assets and liabilities:
Current assets	1,167		(183)
Noncurrent assets	(90)		(23)
Current liabilities	(1,742)		(302)
Noncurrent liabilities	(52)		29
Net cash provided by operating activities	1,673		1,962
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures of FPL	(2,241)		(2,167)

Independent power and other investments of NEER	(4,951)		(2,593)

Nuclear fuel purchases	(47)		(20)
Other capital expenditures	(6)		(113)

Sale of independent power and other investments of NEER	305		184
Proceeds from sale or maturity of securities in special use funds and other investments	760		1,084
Purchases of securities in special use funds and other investments	(1,613)		(1,212)


Other – net	(24)		144
Net cash used in investing activities	(7,817)		(4,693)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of long-term debt, including premiums and discounts	6,655		4,309
Retirements of long-term debt	(2,601)		(493)


Net change in commercial paper	1,135		373
Proceeds from other short-term debt	700		700
Repayments of other short-term debt	(200)		—
Payments from (to) related parties under a cash sweep and credit support agreement – net	(277)		78
Issuances of common stock/equity units – net	2,502		1

Dividends on common stock	(930)		(836)
Other – net	(94)		21
Net cash provided by financing activities	6,890		4,153
Effects of currency translation on cash, cash equivalents and restricted cash	2		—
Net increase in cash, cash equivalents and restricted cash	748		1,422
Cash, cash equivalents and restricted cash at beginning of period	3,441		1,316
Cash, cash equivalents and restricted cash at end of period	$	4,189	$	2,738
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest (net of amount capitalized)	$	549	$	243
Cash paid (received) for income taxes – net	$	2	$	(40)
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued property additions	$	5,522	$	4,954
Decrease in property, plant and equipment – net and contract liabilities (2023 activity, see Note 11)	$	81	$	551

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2022 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 Income (Loss)		Retained Earnings		Total Common Shareholders' Equity		Non- controlling Interests		Total Equity		Redeemable Non-controlling Interests
Three Months Ended March 31, 2023	Shares	Aggregate Par Value
Balances, December 31, 2022	1,987	$	20	$	12,720	$	(218)	$	26,707	$	39,229	$	9,097	$	48,326	$	1,110
Net income (loss)	—	—		—		—		2,086		2,086		(318)				17

Share-based payment activity	3	—		(16)		—		—		(16)		—				—
Dividends on common stock(a)	—	—		—		—		(930)		(930)		—				—
Other comprehensive income	—	—		—		18		—		18		1				—
Issuances of common stock/equity units – net	33	—		2,513		—		—		2,513		—				—



Other differential membership interests activity	—	—		(3)		—		—		(3)		346				(271)
Other	—	—		—		—		(1)		(1)		101				—
Balances, March 31, 2023	2,023	$	20	$	15,214	$	(200)	$	27,862	$	42,896	$	9,227	$	52,123	$	856

———————————————

(a)Dividends per share were $0.4675 for the three months ended March 31, 2023.


	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 March 31, 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)	—	—		—		—		(451)		(451)		(247)				5

Share-based payment activity	1	—		(6)		—		—		(6)		—				—
Dividends on common stock(a)	—	—		—		—		(836)		(836)		—				—
Other comprehensive income (loss)	—	—		—		(20)		—		(20)		6				—



Other differential membership interests activity	—	—		(1)		—		—		(1)		159				(46)
Other	—	—		(2)		—		1		(1)		22				(1)
Balances, March 31, 2022	1,964	$	20	$	11,262	$	(20)	$	24,625	$	35,887	$	8,162	$	44,049	$	203

(a)Dividends per share were $0.425 for the three months ended March 31, 2022.

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2022 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(millions)

(unaudited)


	Three Months Ended March 31,
		2023		2022
OPERATING REVENUES		$	3,919	$	3,712
OPERATING EXPENSES
Fuel, purchased power and interchange		1,214		1,200
Other operations and maintenance		380		396

Depreciation and amortization		335		463
Taxes other than income taxes and other – net		444		410
Total operating expenses – net		2,373		2,469
OPERATING INCOME		1,546		1,243
OTHER INCOME (DEDUCTIONS)
Interest expense		(249)		(173)
Allowance for equity funds used during construction		30		34
Other – net		5		—
Total other deductions – net		(214)		(139)
INCOME BEFORE INCOME TAXES		1,332		1,104
INCOME TAXES		262		229
NET INCOME(a)		$	1,070	$	875

(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 2022 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions, except share amount)

(unaudited)


	March 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	99	$	25
Customer receivables, net of allowances of $5 and $7, respectively	1,617		1,739
Other receivables	303		332
Materials, supplies and fuel inventory	1,170		1,159
Regulatory assets	2,419		2,155

Other	154		143
Total current assets	5,762		5,553
Other assets:
Electric utility plant and other property – net	65,646		64,693
Special use funds	5,471		5,221
Prepaid benefit costs	1,763		1,732
Regulatory assets	5,548		5,484
Goodwill	2,989		2,989
Other	846		887
Total other assets	82,263		81,006
TOTAL ASSETS	$	88,025	$	86,559
LIABILITIES AND EQUITY
Current liabilities:
Commercial paper	$	—	$	1,709
Other short-term debt	200		200
Current portion of long-term debt	2,531		1,547
Accounts payable	916		1,377
Customer deposits	565		543
Accrued interest and taxes	604		362

Accrued construction-related expenditures	501		559
Regulatory liabilities	358		349
Other	707		1,197
Total current liabilities	6,382		7,843
Other liabilities and deferred credits:
Long-term debt	20,926		19,455
Asset retirement obligations	2,116		2,108
Deferred income taxes	8,675		8,376
Regulatory liabilities	9,604		9,458

Other	422		399
Total other liabilities and deferred credits	41,743		39,796
TOTAL LIABILITIES	48,125		47,639
COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock (no par value, 1,000 shares authorized, issued and outstanding)	1,373		1,373
Additional paid-in capital	23,471		23,561
Retained earnings	15,056		13,986

TOTAL EQUITY	39,900		38,920
TOTAL LIABILITIES AND EQUITY	$	88,025	$	86,559

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2022 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions)

(unaudited)


	Three Months Ended March 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,070	$	875
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	335		463
Nuclear fuel and other amortization	40		45
Deferred income taxes	220		191
Cost recovery clauses and franchise fees	263		(12)

Recoverable storm-related costs	(188)		—
Other – net	5		(7)
Changes in operating assets and liabilities:
Current assets	172		(54)
Noncurrent assets	(54)		(26)
Current liabilities	(200)		11
Noncurrent liabilities	16		45
Net cash provided by operating activities	1,679		1,531
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(2,241)		(2,167)
Nuclear fuel purchases	(33)		(5)
Proceeds from sale or maturity of securities in special use funds	486		693
Purchases of securities in special use funds	(523)		(722)
Other – net	(16)		(15)
Net cash used in investing activities	(2,327)		(2,216)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of long-term debt, including premiums and discounts	2,494		2,498
Retirements of long-term debt	(15)		—
Net change in commercial paper	(1,709)		198



Dividends to NEE	—		(2,000)
Other – net	(39)		(22)
Net cash provided by financing activities	731		674
Net increase (decrease) in cash, cash equivalents and restricted cash	83		(11)
Cash, cash equivalents and restricted cash at beginning of period	58		108
Cash, cash equivalents and restricted cash at end of period	$	141	$	97
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest (net of amount capitalized)	$	191	$	109
Cash paid for income taxes – net	$	45	$	28
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued property additions	$	804	$	802

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2022 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER'S EQUITY

(millions)

(unaudited)


Three Months Ended March 31, 2023	Common Stock		Additional Paid-In Capital		Retained Earnings		Common Shareholder's Equity
Balances, December 31, 2022	$	1,373	$	23,561	$	13,986	$	38,920
Net income	—		—		1,070


Distribution of a subsidiary to NEE	—		(90)		—

Balances, March 31, 2023	$	1,373	$	23,471	$	15,056	$	39,900


Three Months Ended March 31, 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	—		—		875

Dividends to NEE	—		—		(2,000)

Balances, March 31, 2022	$	1,373	$	19,936	$	11,160	$	32,469

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2022 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 2022 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 $5.7 billion ($3.9 billion at FPL) and $5.0 billion ($3.7 billion at FPL) for the three months ended March 31, 2023 and 2022, 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.

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 March 31, 2023 and December 31, 2022, FPL's unbilled revenues amounted to approximately $681 million and $661 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 March 31, 2023, FPL expects to record approximately $380 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 2023 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 through 2036, certain power purchase agreements with maturity dates through 2036, and capacity sales associated with natural gas transportation through 2062. At March 31, 2023, 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. The power purchase agreements also contain a variable price component for energy usage which NEER recognizes as revenue as the energy is delivered based on rates stipulated in each respective contract.

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 substantially all 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 (losses) of equity method investees in NEE's condensed consolidated statements of income. At March 31, 2023, NEE's AOCI included immaterial 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.

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.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

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 March 31, 2023 and December 31, 2022, 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.


	March 31, 2023
	Level 1		Level 2		Level 3		Netting(a)		Total
	(millions)
Assets:
NEE:
Commodity contracts	$	3,433	$	6,071	$	2,217	$	(8,486)	$	3,235
Interest rate contracts	$	—	$	372	$	—	$	(15)	357
Foreign currency contracts	$	—	$	—	$	—	$	—	—
Total derivative assets									$	3,592

FPL – commodity contracts	$	—	$	7	$	30	$	(5)	$	32

Liabilities:
NEE:
Commodity contracts	$	5,308	$	6,136	$	1,761	$	(9,829)	$	3,376
Interest rate contracts	$	—	$	495	$	—	$	(15)	480
Foreign currency contracts	$	—	$	144	$	—	$	—	144
Total derivative liabilities									$	4,000

FPL – commodity contracts	$	—	$	6	$	41	$	(5)	$	42

Net fair value by NEE balance sheet line item:
Current derivative assets(b)									$	1,682
Noncurrent derivative assets(c)									1,910
Total derivative assets									$	3,592
Current derivative liabilities(d)									$	1,512

Noncurrent derivative liabilities(e)									2,488
Total derivative liabilities									$	4,000

Net fair value by FPL balance sheet line item:
Current other assets									$	21
Noncurrent other assets									11
Total derivative assets									$	32
Current other liabilities									$	22
Noncurrent other liabilities									20
Total derivative liabilities									$	42

———————————————

(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 $124 million in margin cash collateral received from counterparties.

(c)Reflects the netting of approximately $122 million in margin cash collateral received from counterparties.

(d)Reflects the netting of approximately $620 million in margin cash collateral paid to counterparties.

(e)Reflects the netting of approximately $969 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, 2022
	Level 1		Level 2		Level 3		Netting(a)		Total
	(millions)
Assets:
NEE:
Commodity contracts	$	5,372	$	7,559	$	2,094	$	(12,030)	$	2,995
Interest rate contracts	$	—	$	583	$	—	$	(49)	534
Foreign currency contracts	$	—	$	—	$	—	$	(4)	(4)
Total derivative assets									$	3,525

FPL – commodity contracts	$	—	$	11	$	25	$	(7)	$	29

Liabilities:
NEE:
Commodity contracts	$	7,185	$	7,620	$	2,948	$	(13,010)	$	4,743
Interest rate contracts	$	—	$	191	$	—	$	(49)	142
Foreign currency contracts	$	—	$	130	$	—	$	(4)	126
Total derivative liabilities									$	5,011

FPL – commodity contracts	$	—	$	4	$	16	$	(7)	$	13

Net fair value by NEE balance sheet line item:
Current derivative assets(b)									$	1,590
Noncurrent derivative assets(c)									1,935
Total derivative assets									$	3,525
Current derivative liabilities(d)									$	2,102

Noncurrent derivative liabilities(e)									2,909
Total derivative liabilities									$	5,011

Net fair value by FPL balance sheet line item:
Current other assets									$	19
Noncurrent other assets									10
Total derivative assets									$	29
Current other liabilities									$	12
Noncurrent other liabilities									1
Total derivative liabilities									$	13

———————————————

(b)Reflects the netting of approximately $299 million in margin cash collateral received from counterparties.

(c)Reflects the netting of approximately $262 million in margin cash collateral received from counterparties.

(d)Reflects the netting of approximately $328 million in margin cash collateral paid to counterparties.

(e)Reflects the netting of approximately $1,213 million in margin cash collateral paid to counterparties.

At March 31, 2023 and December 31, 2022, NEE had approximately $37 million (none at FPL) and $106 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 March 31, 2023 and December 31, 2022, NEE had approximately $278 million (none at FPL) and $268 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

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

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 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 March 31, 2023 are as follows:


	Fair Value at				Valuation	Significant				Weighted-
Transaction Type	March 31, 2023				Technique(s)	Unobservable Inputs	Range			average(a)
	Assets		Liabilities
	(millions)
Forward contracts – power	$	309	$	547	Discounted cash flow	Forward price (per MWh)	$(10)	—	$441	$51
Forward contracts – gas	296		90		Discounted cash flow	Forward price (per MMBtu)	$2	—	$17	$4
Forward contracts – congestion	71		23		Discounted cash flow	Forward price (per MWh)	$(21)	—	$27	$1
Options – power	106		17		Option models	Implied correlations	44%	—	88%	53%
						Implied volatilities	46%	—	229%	94%
Options – primarily gas	614		481		Option models	Implied correlations	44%	—	88%	53%
						Implied volatilities	22%	—	145%	59%
Full requirements and unit contingent contracts	691		399		Discounted cash flow	Forward price (per MWh)	$4	—	$338	$70
						Customer migration rate(b)	—%	—	103%	7%
Forward contracts – other	130		204
Total	$	2,217	$	1,761

———————————————

(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 March 31,
	2023				2022
	NEE		FPL		NEE		FPL
	(millions)
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior period	$	(854)	$	9	$	170	$	8
Realized and unrealized gains (losses):
Included in operating revenues	1,208		—		(1,535)		—

Included in regulatory assets and liabilities	(17)		(17)		(19)		(19)
Purchases	214		—		183		—

Settlements	(304)		(3)		250		1
Issuances	(74)		—		(98)		—

Transfers in(a)	9		—		—		—
Transfers out(a)	274		—		(23)		—
Fair value of net derivatives based on significant unobservable inputs at March 31	$	456	$	(11)	$	(1,072)	$	(10)
Gains (losses) included in operating revenues attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date	$	797	$	—	$	(1,405)	$	—

———————————————

(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.

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 March 31,
		2023		2022
		(millions)

Commodity contracts(a) – operating revenues (including $1,142 unrealized gains and $2,127 unrealized losses, respectively)		$	1,019	$	(2,389)

Foreign currency contracts – interest expense (including $15 unrealized losses and $4 unrealized gains, respectively)		(18)		1

Interest rate contracts – interest expense (including $517 unrealized losses and $489 unrealized gains, respectively)		(484)		471
Losses reclassified from AOCI to interest expense:
Interest rate contracts		—		(5)
Foreign currency contracts		(1)		(1)
Total		$	516	$	(1,923)

———————————————

(a)For the three months ended March 31, 2023 and 2022, FPL recorded losses of approximately $25 million and $12 million, respectively, related to commodity contracts as regulatory assets 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:


	March 31, 2023				December 31, 2022
Commodity Type	NEE		FPL		NEE		FPL
	(millions)
Power	(130)	MWh	—		(104)	MWh	—
Natural gas	(839)	MMBtu	971	MMBtu	(1,307)	MMBtu	258	MMBtu
Oil	(44)	barrels	—		(38)	barrels	—

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

At March 31, 2023 and December 31, 2022, NEE had interest rate contracts with a notional amount of approximately $25.6 billion and $19.7 billion, respectively, and foreign currency contracts with a notional amount of approximately $1.0 billion and $1.0 billion, respectively.

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 March 31, 2023 and December 31, 2022, the aggregate fair value of NEE's derivative instruments with credit-risk-related contingent features that were in a liability position was approximately $5.8 billion ($37 million for FPL) and $7.4 billion ($15 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 $775 million (none at FPL) at March 31, 2023 and $1,625 million (none at FPL) at December 31, 2022. 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 $3.5 billion ($5 million at FPL) at March 31, 2023 and $5.2 billion ($20 million at FPL) at December 31, 2022. 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 these provisions were triggered, applicable NEE subsidiaries could be required to post additional collateral of up to approximately $1.6 billion ($70 million at FPL) at March 31, 2023 and $1.1 billion ($185 million at FPL) at December 31, 2022.

Collateral related to derivatives may be posted in the form of cash or credit support in the normal course of business. At March 31, 2023 and December 31, 2022, applicable NEE subsidiaries have posted approximately $19 million (none at FPL) and $59 million (none at FPL), respectively, in cash, and $510 million (none at FPL) and $1,192 million (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 $507 million and $485 million at March 31, 2023 and December 31, 2022, 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:


	March 31, 2023
	Level 1		Level 2			Level 3		Total
	(millions)
Assets:
Cash equivalents and restricted cash equivalents:(a)
NEE – equity securities	$	1,528	$	—		$	—	$	1,528
FPL – equity securities	$	116	$	—		$	—	$	116
Special use funds:(b)
NEE:
Equity securities	$	2,141	$	2,537	(c)	$	—	$	4,678
U.S. Government and municipal bonds	$	716	$	58		$	—	$	774
Corporate debt securities	$	6	$	715		$	—	$	721
Asset-backed securities	$	—	$	645		$	—	$	645
Other debt securities	$	3	$	18		$	—	$	21
FPL:
Equity securities	$	778	$	2,309	(c)	$	—	$	3,087
U.S. Government and municipal bonds	$	587	$	25		$	—	$	612
Corporate debt securities	$	6	$	534		$	—	$	540
Asset-backed securities	$	—	$	467		$	—	$	467
Other debt securities	$	3	$	10		$	—	$	13
Other investments:(d)
NEE:
Equity securities	$	50	$	1		$	—	$	51
U.S. Government and municipal bonds	$	279	$	118		$	—	$	397
Corporate debt securities	$	—	$	341		$	122	$	463
Other debt securities	$	—	$	152		$	11	$	163
FPL:
Equity securities	$	10	$	—		$	—	$	10
Debt securities	$	—	$	114		$	—	$	114

———————————————

(a)Includes restricted cash equivalents of approximately $41 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, 2022
	Level 1		Level 2			Level 3		Total
	(millions)
Assets:
Cash equivalents and restricted cash equivalents:(a)
NEE – equity securities	$	961	$	—		$	—	$	961
FPL – equity securities	$	36	$	—		$	—	$	36
Special use funds:(b)
NEE:
Equity securities	$	2,062	$	2,375	(c)	$	—	$	4,437
U.S. Government and municipal bonds	$	641	$	63		$	—	$	704
Corporate debt securities	$	6	$	716		$	—	$	722
Asset-backed securities	$	—	$	615		$	—	$	615
Other debt securities	$	1	$	19		$	—	$	20
FPL:
Equity securities	$	743	$	2,162	(c)	$	—	$	2,905
U.S. Government and municipal bonds	$	505	$	29		$	—	$	534
Corporate debt securities	$	6	$	547		$	—	$	553
Asset-backed securities	$	—	$	473		$	—	$	473
Other debt securities	$	1	$	11		$	—	$	12
Other investments:(d)
NEE:
Equity securities	$	30	$	1		$	—	$	31
U.S. Government and municipal bonds	$	117	$	118		$	—	$	235
Corporate debt securities	$	—	$	125		$	108	$	233
Other debt securities	$	—	$	57		$	10	$	67
FPL:
Equity securities	$	9	$	—		$	—	$	9
Debt securities	$	—	$	114		$	—	$	114

———————————————

(a)Includes restricted cash equivalents of approximately $69 million ($33 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 – On March 31, 2021, a wholly owned subsidiary of NEET acquired GridLiance Holdco, LP and GridLiance GP, LLC (GridLiance). The acquisition agreements are subject to earn-out provisions for additional payments by NEER related to the completion of capital expenditures for certain future development projects. NEECH guarantees the contingent consideration obligations under the GridLiance acquisition agreement. Significant inputs and assumptions used in the fair value measurement of the contingent consideration, some of which are Level 3 and require judgment, include the projected timing and amount of future cash flows, estimated probability of completing future development projects as well as discount rates. The contingent consideration liabilities were valued at approximately $264 million as of the acquisition date. Approximately $128 million and $203 million of contingent consideration liabilities are included in noncurrent other liabilities on NEE's condensed consolidated balance sheets at March 31, 2023 and December 31, 2022, respectively. The decrease in contingent consideration liabilities is primarily due to a revised assessment of the likelihood of future payments expected under the purchase and sale agreement governing the acquisition of GridLiance.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

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:


	March 31, 2023					December 31, 2022
	Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(millions)
NEE:
Special use funds(a)	$	1,023	$	1,024		$	998	$	999
Other receivables, net of allowances(b)	$	236	$	236		$	221	$	221
Long-term debt, including current portion	$	65,930	$	62,621	(c)	$	61,889	$	57,892	(c)
FPL:
Special use funds(a)	$	752	$	752		$	744	$	744
Long-term debt, including current portion	$	23,457	$	22,307	(c)	$	21,002	$	19,364	(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 March 31, 2023 and December 31, 2022, substantially all is Level 2 for NEE and FPL.

Special Use Funds and Other Investments Carried at Fair Value – 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 $7,861 million ($5,471 million for FPL) and $7,495 million ($5,220 million for FPL) at March 31, 2023 and December 31, 2022, respectively, and FPL's storm fund assets of $1 million and $1 million at March 31, 2023 and December 31, 2022, 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 $3,369 million ($1,877 million for FPL) and $2,858 million ($1,873 million for FPL) at March 31, 2023 and December 31, 2022, respectively. Debt securities included in the nuclear decommissioning funds have a weighted-average maturity at March 31, 2023 of approximately nine years at both NEE and FPL. Other investments primarily consist of debt securities with a weighted-average maturity at March 31, 2023 of approximately five 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 March 31, 2023 and 2022 are as follows:


		NEE					FPL
	Three Months Ended March 31,					Three Months Ended March 31,
		2023		2022			2023		2022
		(millions)
Unrealized gains (losses)		$	273	$	(299)		$	180	$	(190)

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

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 March 31,					Three Months Ended March 31,
		2023		2022			2023		2022
		(millions)
Realized gains		$	8	$	8		$	7	$	7
Realized losses		$	38	$	27		$	30	$	19
Proceeds from sale or maturity of securities		$	428	$	721		$	299	$	418

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
	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
	(millions)
Unrealized gains	$	18	$	4	$	13	$	3
Unrealized losses(a)	$	223	$	285	$	147	$	193
Fair value	$	2,181	$	2,315	$	1,212	$	1,466

———————————————

(a) Unrealized losses on available for sale debt securities in an unrealized loss position for greater than twelve months at March 31, 2023 and December 31, 2022 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 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 three months ended March 31, 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

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

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 March 31, 2023 and 2022 was approximately 17.8% and 34.1%, respectively. NEE's effective income tax rate is based on the composition of pretax income or loss, and, for the three months ended March 31, 2022, primarily reflects the impact of 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).

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


	NEE	FPL
	Three Months Ended March 31,	Three Months Ended March 31,
		2023		2022		2023		2022
Statutory federal income tax rate		21.0	%	21.0	%	21.0	%	21.0	%
Increases (reductions) resulting from:
State income taxes – net of federal income tax benefit		3.2		5.7		4.2		4.3
Taxes attributable to noncontrolling interests		3.3		(4.7)		—		—
PTCs and ITCs		(6.1)		6.2		(1.6)		—
Amortization of deferred regulatory credit		(2.1)		4.7		(3.5)		(4.0)


Other – net		(1.5)		1.2		(0.4)		(0.6)
Effective income tax rate		17.8	%	34.1	%	19.7	%	20.7	%

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.

5. Acquisitions

RNG Acquisition – On March 21, 2023, a wholly owned subsidiary of NextEra Energy Resources acquired 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 (RNG acquisition). 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 purchase price included approximately $1.1 billion in cash consideration and the assumption of approximately $34 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. NEE acquired identifiable assets of approximately $1.1 billion, primarily relating to property, plant and equipment and intangible assets associated with biogas rights agreements and above-market purchased power agreements, and assumed liabilities of approximately $0.2 billion and noncontrolling interests of approximately $0.1 billion. The excess of the purchase price over the fair value of assets acquired and liabilities assumed resulted in approximately $0.3 billion of goodwill which has been recognized on NEE's condensed consolidated balance sheet at March 31, 2023, of which approximately $0.1 billion is expected to be deductible for tax purposes. Goodwill associated with the RNG acquisition is reflected within NEER and, for impairment testing, is expected to be included in the clean energy assets reporting unit. The goodwill arising from the transaction represents expected benefits of synergies and expansion opportunities for NEE's clean energy businesses. As the acquisition was completed shortly before the end of the reporting period, the provisional valuation of the acquired net assets, including goodwill, is subject to change as additional information related to the estimates is obtained.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

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 March 31, 2023 and December 31, 2022, the cash sweep amounts (due to NEP and its subsidiaries) held in accounts belonging to NextEra Energy Resources or its subsidiaries were approximately $21 million and $298 million, respectively, and are included in accounts payable. Fee income related to the CSCS agreement and the service agreements totaled approximately $44 million and $41 million for the three months ended March 31, 2023 and 2022, respectively, and is included in operating revenues in NEE's condensed consolidated statements of income. Amounts due from NEP of approximately $52 million and $94 million are included in other receivables and $114 million and $101 million are included in noncurrent other assets at March 31, 2023 and December 31, 2022, respectively. See also Note 11 – Disposal of Businesses/Assets for amounts due to NEP for reimbursement of construction-related costs. NEECH or NextEra Energy Resources guaranteed or provided indemnifications, letters of credit or surety bonds totaling approximately $4,599 million at March 31, 2023 primarily related to obligations on behalf of NEP's subsidiaries with maturity dates ranging from 2023 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 2022 sale of projects to NEP (see Note 11 – Disposal of Businesses/Assets). 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 March 31, 2023, approximately $56 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 2023 and 2022, certain services, primarily engineering, construction, transportation, storage 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 $233 million and $175 million for the three months ended March 31, 2023 and 2022, respectively.

See also Note 11 – Disposal of Businesses/Assets for sales to NEP.

7. Variable Interest Entities (VIEs)

NEER – At March 31, 2023, 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.

Nine 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, and own a solar generation and battery storage facility that is expected to have total generating/storage capacity of approximately 125 MW and 65 MW, respectively, upon completion of construction, which is expected in 2023. 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 $2,095 million and $1,179 million, respectively, at March 31, 2023, and $2,084 million and $1,174 million, respectively, at December 31, 2022. At March 31, 2023 and December 31, 2022, the assets and liabilities of these VIEs consisted primarily of property, plant and equipment and long-term debt. At March 31, 2023, subsidiaries of NEE had guarantees related to certain obligations of one of these consolidated VIEs.

NEE consolidates a NEET VIE which owns and operates 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 $755 million and $23 million, respectively, at March 31, 2023, and $744 million and $18 million, respectively, at December 31, 2022. At March 31, 2023 and December 31, 2022, 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 $1,479 million and $77 million, respectively, at March 31, 2023, and $1,488 million and $86 million, respectively, at December 31, 2022. At March 31, 2023 and December 31, 2022, the assets of this VIE consisted primarily of property, plant and equipment.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

NextEra Energy Resources consolidates 31 VIEs that primarily relate to certain subsidiaries which have sold differential membership interests in entities which own and operate wind generation, solar generation and battery storage facilities with the generating/storage capacity of approximately 12,014 MW, 731 MW and 324 MW, respectively, and own solar generation and battery storage facilities that, upon completion of construction, which is anticipated in 2023, are expected to have generating/storage capacity of approximately 1,030 MW and 390 MW, respectively. These entities sell, or will 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 $19,960 million and $1,886 million, respectively, at March 31, 2023, and $19,690 million and $2,318 million, respectively, at December 31, 2022. At March 31, 2023 and December 31, 2022, the assets and liabilities of these VIEs consisted primarily of property, plant and equipment and accounts payable. At March 31, 2023, subsidiaries of NEE had guarantees related to certain obligations of three of these consolidated VIEs.

Other – At March 31, 2023 and December 31, 2022, several NEE subsidiaries had investments totaling approximately $4,317 million ($3,468 million at FPL) and $4,016 million ($3,331 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. 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 $5,355 million and $5,214 million at March 31, 2023 and December 31, 2022, respectively. At March 31, 2023, subsidiaries of NEE had guarantees related to certain obligations of one of these entities, as well as commitments to invest an additional approximately $205 million in several of these entities. See further discussion of such guarantees and commitments in Note 12 – Commitments and – Contracts, respectively.

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
	Three Months Ended March 31,	Three Months Ended March 31,
		2023		2022		2023		2022
		(millions)
Service cost		$	16	$	22	$	—	$	—
Interest cost		33		19		3		1
Expected return on plan assets		(98)		(91)		—		—

Amortization of actuarial loss		—		—		—		1
Amortization of prior service benefit		—		—		—		(1)


Net periodic cost (income) at NEE		$	(49)	$	(50)	$	3	$	1
Net periodic cost (income) allocated to FPL		$	(32)	$	(34)	$	2	$	1

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 three months ended March 31, 2023 were as follows:


	Principal Amount		Interest Rate					Maturity Date
	(millions)
FPL:
First mortgage bonds	$	2,500	5.05	%	–	5.30	%	2028	–	2053


NEECH:
Debentures	$	4,000	4.90	%	–	5.25	%	2028	–	2053

In March 2023, NEECH completed a remarketing of $2.5 billion aggregate principal amount of its Series K Debentures due March 1, 2025 that were issued in February 2020 as components of equity units issued concurrently by NEE (February 2020 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 6.051% per year, and interest is payable on March 1 and September 1 of each year, commencing September 1, 2023. In connection with the settlement of the contracts to purchase NEE common stock that were issued as components of the February 2020 equity units, on March 1, 2023, NEE issued 33,380,000 shares of common stock in exchange for $2.5 billion.

10. Equity

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


	Three Months Ended March 31,
		2023		2022
		(millions, except per share amounts)

Numerator – net income (loss) attributable to NEE		$	2,086	$	(451)



Denominator:
Weighted-average number of common shares outstanding – basic		1,999.9		1,964.7
Equity units, stock options, performance share awards and restricted stock(a)		5.2		8.9
Weighted-average number of common shares outstanding – assuming dilution		2,005.1		1,973.6
Earnings (loss) per share attributable to NEE:
Basic		$	1.04	$	(0.23)
Assuming dilution		$	1.04	$	(0.23)

———————————————

(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 51.1 million and 58.5 million for the three months ended March 31, 2023 and 2022, 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 March 31, 2023
















Balances, December 31, 2022	$	20		$	(69)		$	(101)	$	(74)	$	6	$	(218)
Other comprehensive income before reclassifications	—			9			—		3		—		12
Amounts reclassified from AOCI	1		(a)	5		(b)	1		—		—		7
Net other comprehensive income	1			14			1		3		—		19
Less other comprehensive income attributable to noncontrolling interests	—			—			—		(1)		—		(1)
Balances, March 31, 2023	$	21		$	(55)		$	(100)	$	(72)	$	6	$	(200)
Attributable to noncontrolling interests	$	—		$	—		$	—	$	(13)	$	—	$	(13)

———————————————

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

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


	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 March 31, 2022
Balances, December 31, 2021	$	14		$	5	$	25	$	(49)	$	5	$	—
Other comprehensive income (loss) before reclassifications	—			(30)		—		12		—		(18)
Amounts reclassified from AOCI	4		(a)	—		—		—		—		4
Net other comprehensive income (loss)	4			(30)		—		12		—		(14)
Less other comprehensive income attributable to noncontrolling interests	—			—		—		(6)		—		(6)
Balances, March 31, 2022	$	18		$	(25)	$	25	$	(43)	$	5	$	(20)
Attributable to noncontrolling interests	$	—		$	—	$	—	$	12	$	—	$	12

———————————————

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

11. Summary of Significant Accounting and Reporting Policies

Rate Regulation – In March 2023, the FPSC approved FPL’s January 2023 request to recover its 2022 fuel under-recovery of approximately $2.1 billion over 21 months effective April 2023 and its request for a $1.0 billion mid-course correction to reduce the 2023 levelized fuel charges to customers over 9 months effective April 2023. In April 2023, the FPSC approved FPL’s March 2023 request to reduce its 2023 levelized fuel charges, due to further decline in the natural gas forward curve, by an additional $379 million over 8 months effective May 2023.

Storm Cost Recovery – In March 2023, the FPSC approved FPL’s January 2023 request for an interim storm restoration charge for recovery of approximately $1.5 billion in unrecovered storm costs, primarily related to the surcharge for Hurricanes Ian and Nicole. The interim surcharge will apply for a 12-month period that began April 2023. The amount collected will be subject to refund based on an FPSC prudence review.

Other Current Liabilities – At March 31, 2023 and December 31, 2022, approximately $328 million and $618 million, respectively, of unpaid storm restoration costs, including estimated capital costs, are included in other current liabilities 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)

Restricted Cash – At March 31, 2023 and December 31, 2022, NEE had approximately $1,914 million ($42 million for FPL) and $1,840 million ($33 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 $1,590 million is netted against derivative liabilities at March 31, 2023 and $7 million is netted against derivative assets and $1,541 million is netted against derivative liabilities at December 31, 2022. See Note 2.

Disposal of Businesses/Assets – In April 2023, subsidiaries of NextEra Energy Resources entered into an agreement to sell to a NEP subsidiary their 100% ownership interests in five wind generation facilities and three solar generation facilities located in geographically diverse locations throughout the U.S. with a total generating capacity of 688 MW. NEER expects to close the sale by the end of the second quarter of 2023, subject to customary closing conditions, for cash proceeds of approximately $566 million, subject to closing adjustments. Additionally, NEP’s share of the entities’ debt and noncontrolling interests related to differential membership investors is estimated to be approximately $307 million at the time of closing.

In December 2022, subsidiaries of NextEra Energy Resources sold (i) a 49% controlling ownership interest in three wind generation facilities and one solar plus battery facility located in geographically diverse locations throughout the U.S. with a total generating capacity of 1,437 MW and 65 MW of battery storage capacity, two of which facilities were under construction with expected in service dates in 2023, and (ii) their 100% ownership interest in three wind generation facilities located in the Midwest region of the U.S. with a total generating capacity of 347 MW to a NEP subsidiary for cash proceeds of approximately $805 million, plus working capital and other adjustments of $8 million (subject to post-closing adjustments). A NextEra Energy Resources affiliate will continue to operate the facilities included in the sale. In connection with the facilities under construction, approximately $251 million of cash received was recorded as contract liabilities, which is included in current other liabilities on NEE's condensed consolidated balance sheet at December 31, 2022. During the three months ended March 31, 2023, upon one of the facilities achieving commercial operations, approximately $81 million of contract liabilities were reversed and the sale of the facility was recognized for accounting purposes. The remaining contract liability balance relates to sale proceeds from NEP of approximately $69 million and differential membership interests of approximately $101 million. The contract liabilities associated with the sale proceeds and the differential membership interests are subject to the facility currently under construction achieving commercial operations by a specified date in 2023. The contract liabilities will be reversed and the sale recognized for accounting purposes if the contingency is resolved in 2023. Otherwise, NextEra Energy Resources may be required to return proceeds related to differential membership interests and/or repurchase the facilities for up to $170 million. NEER will continue to consolidate the project currently under construction for accounting purposes. In addition, NextEra Energy Resources is responsible to pay for all construction costs related to the portfolio. At March 31, 2023 and December 31, 2022, approximately $707 million and $810 million, respectively, are included in accounts payable on NEE's condensed consolidated balance sheets and represent amounts owed by NextEra Energy Resources to NEP to reimburse NEP for construction costs.

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


	NEE				FPL
	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
	(millions)
Electric plant in service and other property	$	128,927	$	124,963	$	76,103	$	74,353
Nuclear fuel	1,732		1,684		1,223		1,190
Construction work in progress	16,264		15,675		6,352		7,026
Property, plant and equipment, gross	146,923		142,322		83,678		82,569
Accumulated depreciation and amortization	(31,994)		(31,263)		(18,032)		(17,876)
Property, plant and equipment – net	$	114,929	$	111,059	$	65,646	$	64,693

During the three months ended March 31, 2023 and 2022, FPL recorded AFUDC of approximately $39 million and $44 million, respectively, including AFUDC – equity of approximately $30 million and $34 million, respectively. During the three months ended March 31, 2023 and 2022, NEER capitalized interest on construction projects of approximately $58 million and $36 million, respectively.

Structured Payables – Under NEE's structured payables program, subsidiaries of NEE issue negotiable drafts, backed by NEECH guarantees, to settle invoices with suppliers with payment terms that extend the original invoice due date (typically 30 days) to less than one year and include a service fee. At their discretion, the suppliers assign the negotiable drafts and the rights under the NEECH guarantees to financial institutions. NEE and its subsidiaries are not party to any contractual agreements between their suppliers and the applicable financial institutions.

At March 31, 2023 and December 31, 2022, NEE's outstanding obligations under its structured payables program were approximately $3.6 billion and $3.7 billion, respectively, substantially all of which is included in accounts payable on NEE's condensed consolidated balance sheets.

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 March 31, 2023, estimated capital expenditures, on an accrual basis, for the remainder of 2023 through 2027 were as follows:


	Remainder of 2023		2024		2025		2026		2027		Total
	(millions)
FPL:
Generation:(a)
New(b)	$	2,810	$	2,315	$	2,820	$	3,670	$	3,150	$	14,765
Existing	1,110		1,175		1,045		1,280		1,465		6,075
Transmission and distribution(c)	1,945		3,975		3,645		3,340		3,575		16,480
Nuclear fuel	90		160		200		200		225		875
General and other	510		455		515		385		525		2,390
Total	$	6,465	$	8,080	$	8,225	$	8,875	$	8,940	$	40,585
NEER:(d)
Wind(e)	$	2,750	$	1,320	$	625	$	50	$	40	$	4,785
Solar(f)	3,365		1,320		240		5		5		4,935
Other clean energy(g)	705		300		80		90		15		1,190
Nuclear, including nuclear fuel	140		230		220		225		295		1,110

Rate-regulated transmission	185		105		95		70		20		475
Other	580		275		175		160		130		1,320
Total	$	7,725	$	3,550	$	1,435	$	600	$	505	$	13,815

———————————————

(a)Includes AFUDC of approximately $100 million, $105 million, $90 million, $125 million and $115 million for the remainder of 2023 through 2027, respectively.

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

(c)Includes AFUDC of approximately $40 million, $50 million, $55 million, $30 million and $30 million for the remainder of 2023 through 2027, 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 3,081 MW, and related transmission.

(f)Includes capital expenditures for new solar projects (including solar plus battery storage projects) totaling approximately 6,890 MW and related transmission.

(g)Includes capital expenditures primarily for battery storage projects and renewable fuels projects.

The above estimates are subject to continuing review and adjustment and actual capital expenditures may vary significantly from these estimates.

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 $493 million at March 31, 2023. 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 March 31, 2023, 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 $4.6 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 2041.

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 March 31, 2023 were estimated as follows:


	Remainder of 2023		2024		2025		2026		2027		Thereafter
	(millions)
FPL(a)	$	835	$	1,065	$	1,065	$	1,065	$	985	$	8,545

NEER(b)(c)(d)	$	3,230	$	1,800	$	145	$	100	$	95	$	670

———————————————

(a)Includes approximately $310 million, $410 million, $405 million, $400 million, $400 million and $5,560 million for the remainder of 2023 through 2027 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 and totaled approximately $102 million and $102 million for the three months ended March 31, 2023 and 2022, respectively, of which $25 million and $26 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 32.2% 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 $260 million of commitments to invest in technology and other investments through 2031. See Note 7 – Other.

(d)Includes approximately $365 million, $1,285 million, $5 million, $5 million, $0 million and $0 million for the remainder of 2023 through 2027 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 ($100 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.

Legal Proceedings – FPL is the defendant in a purported class action lawsuit (Velez, et al. v. Florida Power & Light Company) filed in February 2018 that seeks from FPL unspecified damages for alleged breach of contract and gross negligence based on service interruptions that occurred as a result of Hurricane Irma in 2017. The trial of this matter is set for November 2023 in the Miami-Dade County Circuit Court. The trial court certified the case as a class action and FPL's appeal of that decision was denied by Florida's Third District Court of Appeal (3rd DCA) in March 2023. FPL filed a motion on March 31, 2023, for rehearing with the 3rd DCA claiming that the opinion upholding the class certification contains several errors that should be reheard by the full 3rd DCA. The motion is pending. FPL does not believe that the plaintiffs’ claims should be meritorious on a class, individual or appellate basis, but management is unable to predict with certainty the outcome of the lawsuit.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Concluded)

(unaudited)

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.

NEE's segment information is as follows:


	Three Months Ended March 31,
	2023									2022
	FPL		NEER(a)			Corporate and Other		NEE Consoli- dated		FPL		NEER(a)			Corporate and Other		NEE Consoli- dated
								(millions)
Operating revenues	$	3,919	$	2,792		$	5	$	6,716	$	3,712	$	(800)		$	(22)	$	2,890
Operating expenses – net	$	2,373	$	1,325		$	74	$	3,772	$	2,469	$	1,168		$	51	$	3,688
Gains (losses) on disposal of businesses/assets – net	$	—	$	1		$	(3)	$	(2)	$	—	$	25		$	(2)	$	23
Net loss attributable to noncontrolling interests	$	—	$	301		$	—	$	301	$	—	$	242		$	—	$	242
Net income (loss) attributable to NEE	$	1,070	$	1,440	(b)	$	(424)	$	2,086	$	875	$	(1,499)	(b)	$	173	$	(451)

———————————————

(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


	March 31, 2023								December 31, 2022
	FPL		NEER		Corporate and Other		NEE Consoli- dated		FPL		NEER		Corporate and Other		NEE Consoli- dated
							(millions)
Total assets	$	88,025	$	74,846	$	2,486	$	165,357	$	86,559	$	70,713	$	1,663	$	158,935

Previous: Cover and table of contents · Next: Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations