Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

NEE’s operating performance is driven primarily by the operations of its two principal businesses, FPL, which serves approximately 5.8 million customer accounts in Florida and is one of the largest electric utilities in the U.S., and NEER, which together with affiliated entities is the world's largest generator of renewable energy from the wind and sun based on 2022 MWh produced on a net generation basis, as well as a world leader in battery storage. The table below presents net income (loss) attributable to NEE and earnings (loss) per share attributable to NEE, assuming dilution, by reportable segment, FPL and NEER. Corporate and Other is primarily comprised of the operating results of other business activities, as well as other income and expense items, including interest expense, and eliminating entries, and may include the net effect of rounding. See Note 13 for additional segment information. The following discussions should be read in conjunction with the Notes contained herein and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in the 2022 Form 10-K. The results of operations for an interim period generally will not give a true indication of results for the year. In the following discussions, all comparisons are with the corresponding items in the prior year periods.

			Net Income (Loss) Attributable to NEE												Earnings (Loss) Per Share Attributable to NEE, Assuming Dilution												Net Income (Loss) Attributable to NEE												Earnings (Loss) Per Share Attributable to NEE, Assuming Dilution
			Three Months Ended September 30,												Three Months Ended September 30,												Nine Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022						2023						2022						2023						2022
			(millions)																								(millions)
FPL			$	1,183					$	1,074					$	0.58					$	0.54					$	3,406					$	2,939					$	1.68					$	1.49
NEER(a)			(230)						655						(0.11)						0.33						2,672						(711)						1.32						(0.36)
Corporate and Other			266						(33)						0.13						(0.01)						22						397						0.02						0.20
NEE			$	1,219					$	1,696					$	0.60					$	0.86					$	6,100					$	2,625					$	3.02					$	1.33

———————————————

(a) NEER’s results reflect an allocation of interest expense from NEECH to NextEra Energy Resources' subsidiaries based on a deemed capital structure of 70% debt and differential membership interests sold by NextEra Energy Resources' subsidiaries.

Adjusted Earnings

NEE prepares its financial statements under GAAP. However, management uses earnings adjusted for certain items (adjusted earnings), a non-GAAP financial measure, internally for financial planning, analysis of performance, reporting of results to the Board of Directors and as an input in determining performance-based compensation under NEE’s employee incentive compensation plans. NEE also uses adjusted earnings when communicating its financial results and earnings outlook to analysts and investors. NEE’s management believes that adjusted earnings provide a more meaningful representation of NEE's fundamental earnings power. Although these amounts are properly reflected in the determination of net income (loss) under GAAP, management believes that the amount and/or nature of such items make period to period comparisons of operations difficult and potentially confusing. Adjusted earnings do not represent a substitute for net income (loss), as prepared under GAAP.

The following table provides details of the after-tax adjustments to net income considered in computing NEE's adjusted earnings discussed above.

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(millions)
Net gains (losses) associated with non-qualifying hedge activity(a)			$	284					$	90					$	1,746					$	(974)
Differential membership interests-related – NEER			$	(11)					$	(29)					$	(38)					$	(71)
NEP investment gains, net – NEER(b)			$	(908)					$	75					$	(937)					$	(8)
Change in unrealized gains (losses) on NEER's nuclear decommissioning funds and OTTI, net – NEER			$	(66)					$	(99)					$	(6)					$	(403)
Impairment charges related to investment in Mountain Valley Pipeline – NEER(c)			$	—					$	(24)					$	(39)					$	(650)

———————————————

(a) For the three months ended September 30, 2023 and 2022, approximately $127 million of losses and $3 million of gains, respectively, and for the nine months ended September 30, 2023 and 2022, $1,297 million of gains and $1,619 million of losses, respectively, are included in NEER's net income (loss); the balance is included in Corporate and Other. The change in non-qualifying hedge activity is primarily attributable to changes in forward power and natural gas prices, interest rates and foreign currency exchange rates, as well as the reversal of previously recognized unrealized mark-to-market gains or losses as the underlying transactions were realized.

(b) For the three and nine months ended September 30, 2023, includes an impairment charge related to the investment in NEP. See Note 3 – Nonrecurring Fair Value Measurements.

(c) See Note 3 – Nonrecurring Fair Value Measurements for a discussion of the first quarter of 2022 impairment charge related to the investment in Mountain Valley Pipeline.

NEE segregates into two categories unrealized mark-to-market gains and losses and timing impacts related to derivative transactions. The first category, referred to as non-qualifying hedges, represents certain energy derivative, interest rate derivative and foreign currency transactions entered into as economic hedges, which do not meet the requirements for hedge accounting or for which hedge accounting treatment is not elected or has been discontinued. Changes in the fair value of those transactions are marked to market and reported in the condensed consolidated statements of income, resulting in earnings volatility because the economic offset to certain of the positions are generally not marked to market. As a consequence, NEE's net income reflects only the movement in one part of economically-linked transactions. For example, a gain (loss) in the non-qualifying hedge category for certain energy derivatives is offset by decreases (increases) in the fair value of related physical asset positions in the portfolio or contracts, which are not marked to market under GAAP. For this reason, NEE's management views results expressed excluding the impact of the non-qualifying hedges as a meaningful measure of current period performance. The second category, referred to as trading activities, which is included in adjusted earnings, represents the net unrealized effect of actively traded positions entered into to take advantage of expected market price movements and all other commodity hedging activities. At FPL, substantially all changes in the fair value of energy derivative transactions 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. See Note 2.

RESULTS OF OPERATIONS

Summary

Net income attributable to NEE decreased by $477 million for the three months ended September 30, 2023 reflecting lower results at NEER, partly offset by higher results at FPL and Corporate and Other. Net income attributable to NEE increased by $3,475 million for the nine months ended September 30, 2023 reflecting higher results at NEER and FPL, partly offset by lower results at Corporate and Other.

FPL's increase in net income for the three and nine months ended September 30, 2023 was primarily driven by continued investments in plant in service and other property. In September 2023, FPL entered into an agreement to sell its ownership interests in FCG. See Note 11 – Disposal of Businesses/Assets.

NEER's results decreased for the three months ended September 30, 2023 primarily reflecting an OTTI impairment related to the investment in NEP and unfavorable non-qualifying hedge activity compared to 2022, partly offset by higher earnings from new investments. NEER's results increased for the nine months ended September 30, 2023 primarily reflecting favorable non-qualifying hedge activity compared to 2022, lower impairment charges on the Mountain Valley Pipeline investment, higher earnings from new investments and the customer supply and proprietary power and gas trading business, and favorable changes in the fair value of equity securities in NEER's nuclear decommissioning funds, partly offset by the OTTI impairment related to the investment in NEP. In June 2023, subsidiaries of NextEra Energy Resources sold ownership interests in a portfolio of wind and solar generation facilities with a combined net generating capacity totaling 688 MW to a NEP subsidiary. See Note 11 – Disposal of Businesses/Assets.

Corporate and Other's results increased for the three months ended September 30, 2023 primarily due to more favorable non-qualifying hedge activity compared to 2022, partly offset by higher interest costs. Corporate and Other's results decreased for the nine months ended September 30, 2023 primarily due to less favorable non-qualifying hedge activity compared to 2022 and higher interest costs.

NEE's effective income tax rates for the three months ended September 30, 2023 and 2022 were approximately (5)% and 17%, respectively. NEE's effective income tax rates for the nine months ended September 30, 2023 and 2022 were approximately 14% and 12%, respectively. See Note 4 for a discussion of NEE's and FPL's effective income tax rates.

FPL: Results of Operations

Investments in plant in service and other property grew FPL's average rate base by approximately $7.5 billion and $6.7 billion for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in the prior year, reflecting, among other things, solar generation additions, ongoing transmission and distribution additions and, for the nine months ended September 30, 2023, the addition of the 1,246 MW Dania Beach Clean Energy Center which was placed in service on May 31, 2022.

The use of reserve amortization for the three and nine months ended September 30, 2023 is permitted by FPL's 2021 rate agreement. In order to earn a targeted regulatory ROE, subject to limitations associated with the 2021 rate agreement, reserve amortization is calculated using a trailing thirteen-month average of retail rate base and capital structure in conjunction with the trailing twelve months regulatory retail base net operating income, which primarily includes the retail base portion of base and other revenues, net of O&M, depreciation and amortization, interest and tax expenses. In general, the net impact of these income statement line items must be adjusted, in part, by reserve amortization to earn the targeted regulatory ROE. In certain periods, reserve amortization is reversed so as not to exceed the targeted regulatory ROE. The drivers of FPL's net income not reflected in the reserve amortization calculation typically include wholesale and transmission service revenues and expenses, cost recovery clause revenues and expenses, AFUDC – equity and revenue and costs not recoverable from retail customers. During the three and nine months ended September 30, 2023, FPL recorded the reversal of reserve amortization of approximately $245 million and reserve amortization of $206 million, respectively. During the three months ended September 30, 2022, FPL recorded the reversal of reserve amortization of approximately $80 million. During the nine months ended September 30, 2022, FPL recorded a one-time reserve amortization adjustment of approximately $114 million, discussed under Depreciation and Amortization Expense below. During both 2023 and 2022, FPL earned an approximately 11.80% regulatory ROE on its retail rate base, based on a trailing thirteen-month average retail rate base as of September 30, 2023 and September 30, 2022.

FPL implemented an interim storm restoration charge in April 2023 for eligible storm restoration costs, which are currently estimated to be approximately $1.3 billion, primarily associated with Hurricanes Ian and Nicole (see Note 11 – Storm Cost Recovery). Also, effective April 2023, FPL began recovering its 2022 fuel under-recovery of approximately $2.1 billion and reduced its 2023 levelized fuel charges to customers by $1.0 billion. Beginning May 2023 and July 2023, FPL further reduced its 2023 levelized fuel charges to customers by approximately $379 million and $256 million, respectively. See Note 11 – Rate Regulation.

On September 28, 2023, the Florida Supreme Court ruled on the appeal of FPSC’s final order regarding FPL’s 2021 rate agreement and remanded the FPSC's order back to the FPSC. See Note 11 – Rate Regulation.

Operating Revenues

During the three and nine months ended September 30, 2023, operating revenues increased $400 million and $958 million, respectively, reflecting increases in storm cost recovery revenues of approximately $440 million and $792 million, respectively, primarily associated with Hurricanes Ian and Nicole, as discussed above. Additionally, during the three and nine months ended September 30, 2023, retail base revenues increased approximately $260 million and $546 million, respectively, primarily related to new retail base rates under the 2021 rate agreement, an increase of approximately 1.9% and 0.2%, respectively, in the average usage per retail customer and an increase of 1.1% in the average number of customer accounts for both periods. The increases in operating revenues for the three and nine months ended September 30, 2023 were partly offset by decreases in fuel revenues of approximately $355 million and $473 million, respectively, primarily related to lower fuel prices.

Fuel, Purchased Power and Interchange Expense

Fuel, purchased power and interchange expense decreased $394 million and $600 million for the three and nine months ended September 30, 2023, respectively, primarily reflecting lower fuel and energy prices.

Depreciation and Amortization Expense

Depreciation and amortization expense increased $595 million and $737 million during the three and nine months ended September 30, 2023, respectively. The increases for the three and nine months ended September 30, 2023 primarily reflect amortization of deferred storm cost expenses primarily associated with Hurricanes Ian and Nicole, as discussed above, of approximately $440 million and $789 million, respectively, and also reflects the impact of reserve amortization. During the three months ended September 30, 2023 and 2022, FPL recorded the reversal of reserve amortization of approximately $245 million and $80 million, respectively. During the nine months ended September 30, 2023 and 2022, FPL recorded reserve amortization of approximately $206 million and $0 million, respectively. In addition, during the nine months ended September 30, 2022, FPL recorded a one-time reserve amortization adjustment of approximately $114 million as required under the 2021 rate agreement, 50% of which was used to reduce the capital recovery regulatory asset balance and the other 50% to increase the storm reserve regulatory liability. Reserve amortization, or reversal of such amortization, reflects adjustments to accrued asset removal costs provided under the 2021 rate agreement in order to achieve the targeted regulatory ROE. Reserve amortization is recorded as either an increase or decrease to accrued asset removal costs which is reflected in noncurrent regulatory assets on the condensed consolidated balance sheets. At September 30, 2023, approximately $1,244 million of reserve amortization remains available under the 2021 rate agreement.

Interest Expense

Interest expense increased $86 million and $253 million for the three and nine months ended September 30, 2023, respectively, primarily due to higher average interest rates and higher average debt balances.

NEER**: Results of Operations**

NEER’s results decreased $885 million and increased $3,383 million for the three and nine months ended September 30, 2023, respectively. The primary drivers, on an after-tax basis, of the changes are in the following table.

			Increase (Decrease) From Prior Year Period
			Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
			(millions)
New investments(a)			$	226					$	575
Existing clean energy(a)			(38)						(221)
Gas infrastructure(a)			13						—
Customer supply and proprietary power and gas trading(b)			84						389
NEET(a)			(5)						(10)
Other, including other investment income, interest expense and corporate general and administrative expenses			(109)						(345)
Change in non-qualifying hedge activity(c)			(130)						2,916
Change in unrealized gains/losses on equity securities held in nuclear decommissioning funds and OTTI, net(c)			33						397
NEP investment gains, net(c)			(983)						(929)
Impairment charges related to investment in Mountain Valley Pipeline(c)(d)			24						611
Change in net income (loss) less net loss attributable to noncontrolling interests			$	(885)					$	3,383

———————————————

(a) Reflects after-tax project contributions, including the net effect of deferred income taxes and other benefits associated with PTCs and ITCs for wind, solar and storage projects, as applicable, but excludes allocation of interest expense and corporate general and administrative expenses except for an allocated credit support charge related to guarantees issued to conduct business activities. Results from projects, pipelines and rate-regulated transmission facilities and transmission lines are included in new investments during the first twelve months of operation or ownership. Project results, including repowered wind projects, are included in existing clean energy, pipeline results are included in gas infrastructure and rate-regulated transmission facilities and transmission lines are included in NEET beginning with the thirteenth month of operation or ownership.

(b) Excludes allocation of interest expense and corporate general and administrative expenses except for an allocated credit support charge related to guarantees issued to conduct business activities.

(c) See Overview – Adjusted Earnings for additional information.

(d) See Note 3 – Nonrecurring Fair Value Measurements for a discussion of the first quarter of 2022 impairment charge related to the investment in Mountain Valley Pipeline.

New Investments

Results from new investments for the three and nine months ended September 30, 2023 increased primarily due to higher earnings related to new wind and solar generation and battery storage facilities that entered service during or after the three and nine months ended September 30, 2022.

Customer Supply and Proprietary Power and Gas Trading

Results from customer supply and proprietary power and gas trading increased for the nine months ended September 30, 2023 primarily due to higher margins as compared to the lower margins in the prior year periods.

Other Factors

Supplemental to the primary drivers of the changes in NEER's results discussed above, the discussion below describes changes in certain line items set forth in NEE's condensed consolidated statements of income as they relate to NEER.

Operating Revenues

Operating revenues for the three months ended September 30, 2023 increased $17 million primarily due to:

• revenues from new investments of approximately $120 million, and

• net increases in revenues of $108 million from the customer supply, proprietary power and gas trading and gas infrastructure businesses as compared to the prior year period,

partly offset by,

• the impact of non-qualifying commodity hedges due primarily to changes in energy prices ($346 million of losses for the three months ended September 30, 2023 compared to $217 million of losses for the comparable period in 2022), and

• lower revenues from existing clean energy assets of $90 million.

Operating revenues for the nine months ended September 30, 2023 increased $5,389 million primarily due to:

• the impact of non-qualifying commodity hedges due primarily to changes in energy prices (approximately $1,607 million of gains for the nine months ended September 30, 2023 compared to $3,105 million of losses for the comparable period in 2022),

• net increases in revenues of $602 million from the customer supply, proprietary power and gas trading and gas infrastructure businesses as compared to the prior year period,

• revenues from new investments of $283 million, and

• higher revenues from NEET of $65 million,

partly offset by,

• lower revenues from existing clean energy assets of $306 million primarily due to lower wind revenues.

Operating Expenses – net

Operating expenses – net for the nine months ended September 30, 2023 increased $400 million primarily due to increases of $226 million in O&M expenses and $213 million in depreciation and amortization, partly offset by decreases of $35 million in fuel, purchased power and interchange expenses. The increases were primarily associated with growth across the NEER businesses.

Gains on Disposal of Businesses/Assets – net

For the three and nine months ended September 30, 2023, the changes in gains on disposal of businesses/assets – net primarily reflect the absence of gains recorded in the prior year related to the September 2022 sale of a battery storage facility (see Note 11 – Disposal of Businesses/Assets) and the resolution of a contingency related to the December 2021 sale of ownership interests in wind and solar projects.

Interest Expense

NEER’s interest expense for the nine months ended September 30, 2023 increased $610 million primarily reflecting approximately $376 million of less favorable impacts related to changes in the fair value of interest rate derivative instruments as well as higher average interest rates and higher average debt balances.

Equity in Earnings (Losses) of Equity Method Investees

NEER recognized $954 million and $722 million of equity in losses of equity method investees for the three and nine months ended September 30, 2023, respectively, compared to $196 million and $179 million of equity in earnings of equity method investees for the three and nine months ended September 30, 2022, respectively. The change for the three and nine months ended September 30, 2023 primarily reflects an impairment charge of approximately $1.2 billion ($0.9 billion after tax) related to the investment in NEP. For the nine months ended September 30, 2023, the change also reflects a decrease in equity in earnings of NEP recorded in 2023 primarily due to less favorable impacts related to changes in the fair value of interest rate derivative instruments, partly offset by the absence of impairment charges of approximately $0.8 billion ($0.6 billion after tax) related to the investment in Mountain Valley Pipeline recorded in the prior year period. See Note 3 – Nonrecurring Fair Value Measurements for a discussion of the impairment charges recorded in 2023 and 2022.

Change in Unrealized Gains (Losses) on Equity Securities Held in NEER's Nuclear Decommissioning Funds – net

For the nine months ended September 30, 2023, changes in the fair value of equity securities in NEER's nuclear decommissioning funds related to favorable market conditions in 2023 compared to the prior year period.

Tax Credits, Benefits and Expenses

PTCs from wind and solar projects and ITCs from solar, battery storage and certain wind projects are included in NEER’s earnings. PTCs are recognized as wind and solar energy is generated and sold based on a per kWh rate prescribed in applicable federal and state statutes. Also see Note 4 for a discussion of other income tax impacts.

RNG Acquisition

On March 21, 2023, a wholly owned subsidiary of NextEra Energy Resources acquired a portfolio of renewable energy projects as well as the related service provider. See Note 5 – RNG Acquisition.

Corporate and Other: Results of Operations

Corporate and Other is primarily comprised of the operating results of other business activities, as well as corporate interest income and expenses. Corporate and Other allocates a portion of NEECH's corporate interest expense to NextEra Energy Resources. Interest expense is allocated based on a deemed capital structure of 70% debt and differential membership interests sold by NextEra Energy Resources' subsidiaries.

Corporate and Other's results increased $299 million and decreased $375 million during the three and nine months ended September 30, 2023, respectively. The increase for the three months ended September 30, 2023 primarily reflects more favorable after-tax impacts of approximately $324 million, as compared to the prior year period, related to non-qualifying hedge activity as a result of changes in the fair value of interest rate derivative instruments, partly offset by higher average interest rates and higher average debt balances. The decrease for the nine months ended September 30, 2023 primarily reflects less favorable after-tax impacts of approximately $196 million, as compared to the prior year period, related to non-qualifying hedge activity as a result of changes in the fair value of interest rate derivative instruments as well as higher average interest rates and higher average debt balances.

LIQUIDITY AND CAPITAL RESOURCES

NEE and its subsidiaries require funds to support and grow their businesses. These funds are used for, among other things, working capital (see Note 11 – Rate Regulation regarding FPL's under-recovered fuel costs in 2022 and Note 11 – Storm Cost Recovery), capital expenditures (see Note 12 – Commitments), investments in or acquisitions of assets and businesses (see Note 5), payment of maturing debt and related derivative obligations (see Note 2) and, from time to time, redemption or repurchase of outstanding debt or equity securities. It is anticipated that these requirements will be satisfied through a combination of cash flows from operations, short- and long-term borrowings, the issuance of short- and long-term debt (see Note 9) and, from time to time, equity securities, proceeds from differential membership investors, the sale of tax credits and sales of assets to NEP or third parties (see Note 11 – Disposal of Businesses/Assets), consistent with NEE’s and FPL’s objective of maintaining, on a long-term basis, a capital structure that will support a strong investment grade credit rating. NEE, FPL and NEECH rely on access to credit and capital markets as significant sources of liquidity for capital requirements and other operations that are not satisfied by operating cash flows. The inability of NEE, FPL and NEECH to maintain their current credit ratings could affect their ability to raise short- and long-term capital, their cost of capital and the execution of their respective financing strategies, and could require the posting of additional collateral under certain agreements.

Cash Flows

NEE's sources and uses of cash for the nine months ended September 30, 2023 and 2022 were as follows:

			Nine Months Ended September 30,
			2023						2022
			(millions)
Sources of cash:
Cash flows from operating activities			$	8,423					$	7,267
Issuances of long-term debt, including premiums and discounts			9,978						11,616
Proceeds from differential membership investors			337						443
Sale of independent power and other investments of NEER			1,353						575
Payments from related parties under the CSCS agreement – net			—						8
Issuances of common stock/equity units – net			4,505						1,458
Net increase in commercial paper and other short-term debt			3,563						743
Other sources – net			—						5
Total sources of cash			28,159						22,115
Uses of cash:
Capital expenditures, independent power and other investments and nuclear fuel purchases			(18,910)						(13,829)
Retirements of long-term debt			(5,084)						(2,137)
Payments to related parties under the CSCS agreement – net			(206)						—
Dividends on common stock			(2,823)						(2,507)
Other uses – net			(1,787)						(986)
Total uses of cash			(28,810)						(19,459)
Effects of currency translation on cash, cash equivalents and restricted cash			(12)						(5)
Net increase (decrease) in cash, cash equivalents and restricted cash			$	(663)					$	2,651

NEE's primary capital requirements are for expanding and enhancing FPL's electric system and generation facilities to continue to provide reliable service to meet customer electricity demands and for funding NEER's investments in independent power and other projects. See Note 12 – Commitments for estimated capital expenditures for the remainder of 2023 through 2027.

The following table provides a summary of capital investments for the nine months ended September 30, 2023 and 2022.

			Nine Months Ended September 30,
			2023						2022
			(millions)
FPL:
Generation:
New			$	2,302					$	955
Existing			1,042						1,065
Transmission and distribution			3,405						3,505
Nuclear fuel			79						67
General and other			435						385
Other, primarily change in accrued property additions and the exclusion of AFUDC – equity			95						111
Total			7,358						6,088
NEER:
Wind			3,363						2,565
Solar (includes solar plus battery storage projects)			3,995						2,114
Other clean energy			1,889						712
Nuclear, including nuclear fuel			155						112
Natural gas pipelines			250						189
Other gas infrastructure			1,345						927
Rate-regulated transmission			217						390
Other			289						281
Total			11,503						7,290
Corporate and Other			49						451
Total capital expenditures, independent power and other investments and nuclear fuel purchases			$	18,910					$	13,829

Liquidity

At September 30, 2023, NEE's total net available liquidity was approximately $12.8 billion. The table below provides the components of FPL's and NEECH's net available liquidity at September 30, 2023.

																											Maturity Date
			FPL												NEECH						Total						FPL												NEECH
			(millions)
Syndicated revolving credit facilities(a)			$	3,420											$	10,739					$	14,159					2025 – 2028												2024 – 2028
Issued letters of credit			(3)												(600)						(603)
			3,417												10,139						13,556
Bilateral revolving credit facilities(b)			2,080												1,350						3,430						2023 – 2025												2024 – 2026
Borrowings			—												(1,100)						(1,100)
			2,080												250						2,330
Letter of credit facilities(c)			—												3,530						3,530																		2024 – 2026
Issued letters of credit			—												(2,120)						(2,120)
			—												1,410						1,410
Subtotal			5,497												11,799						17,296
Cash and cash equivalents			105												1,459						1,564
Commercial paper and other short-term borrowings outstanding			(2,369)												(3,791)						(6,160)
Amounts due to related parties under the CSCS agreement (see Note 6)			—												92						92
Net available liquidity			$	3,233											$	9,559					$	12,792

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(a) Provide for the funding of loans up to the amount of the credit facility and the issuance of letters of credit up to $3,200 million ($450 million for FPL and $2,750 million for NEECH). The entire amount of the credit facilities is available for general corporate purposes and to provide additional liquidity in the event of a loss to the companies’ or their subsidiaries’ operating facilities (including, in the case of FPL, a transmission and distribution property loss). FPL’s syndicated revolving credit facilities are also available to support the purchase of $1,319 million of pollution control, solid waste disposal and industrial development revenue bonds in the event they are tendered by individual bondholders and not remarketed prior to maturity, as well as the repayment of approximately $1,812 million of floating rate notes in the event an individual noteholder requires repayment at specified dates prior to maturity. As of September 30, 2023, approximately $3,311 million of NEECH's syndicated revolving credit facilities expire over the next 12 months.

(b) Only available for the funding of loans. As of September 30, 2023, approximately $1,705 million of FPL's and $650 million of NEECH's bilateral revolving credit facilities expire over the next 12 months.

(c) Only available for the issuance of letters of credit. As of September 30, 2023, there were no letter of credit facilities expiring over the next 12 months.

Capital Support

Guarantees, Letters of Credit, Surety Bonds and Indemnifications (Guarantee Arrangements)

Certain subsidiaries of NEE issue guarantees and obtain letters of credit and surety bonds, as well as provide indemnities, to facilitate commercial transactions with third parties and financings. Substantially all of the guarantee arrangements are on behalf of NEE’s consolidated subsidiaries, as discussed in more detail below. See Note 6 regarding guarantees of obligations on behalf of NEP subsidiaries. NEE is not required to recognize liabilities associated with guarantee arrangements issued on behalf of its consolidated subsidiaries unless it becomes probable that they will be required to perform. At September 30, 2023, NEE believes that there is no material exposure related to these guarantee arrangements.

NEE subsidiaries issue guarantees related to equity contribution agreements and engineering, procurement and construction agreements, associated with the development, construction and financing of certain power generation facilities (see Note 11 – Structured Payables) and a natural gas pipeline project under construction, as well as a related natural gas transportation agreement. Commitments associated with these activities are included and/or disclosed in the contracts table in Note 12.

In addition, at September 30, 2023, NEE subsidiaries had approximately $5.7 billion in guarantees related to obligations under purchased power agreements, nuclear-related activities, payment obligations related to PTCs, support for NEER's retail electricity provider activities, as well as other types of contractual obligations (see Note 3 – Contingent Consideration and Note 12 – Commitments).

In some instances, subsidiaries of NEE elect to issue guarantees instead of posting other forms of collateral required under certain financing arrangements, as well as for other project-level cash management activities. At September 30, 2023, these guarantees totaled approximately $561 million and support, among other things, cash management activities, including those related to debt service and operations and maintenance service agreements, as well as other specific project financing requirements.

Subsidiaries of NEE also issue guarantees to support customer supply and proprietary power and gas trading activities, including the buying and selling of wholesale energy commodities. At September 30, 2023, the estimated mark-to-market exposure (the total amount that these subsidiaries of NEE could be required to fund based on energy commodity market prices at September 30, 2023) plus contract settlement net payables, net of collateral posted for obligations under these guarantees, totaled approximately $1.1 billion.

At September 30, 2023, subsidiaries of NEE also had approximately $4.3 billion of standby letters of credit and approximately $1.6 billion of surety bonds to support certain of the commercial activities discussed above. FPL's and NEECH's credit facilities are available to support substantially all of the standby letters of credit.

In addition, as part of contract negotiations in the normal course of business, certain subsidiaries of NEE have agreed and in the future may agree to make payments to compensate or indemnify other parties, including those associated with asset divestitures, for possible unfavorable financial consequences resulting from specified events. The specified events may include, but are not limited to, an adverse judgment in a lawsuit, or the imposition of additional taxes due to a change in tax law or interpretations of the tax law. NEE is unable to estimate the maximum potential amount of future payments by its subsidiaries under some of these contracts because events that would obligate them to make payments have not yet occurred or, if any such event has occurred, they have not been notified of its occurrence.

NEECH, a 100% owned subsidiary of NEE, provides funding for, and holds ownership interests in, NEE's operating subsidiaries other than FPL. NEE has fully and unconditionally guaranteed certain payment obligations of NEECH, including most of its debt and all of its debentures registered pursuant to the Securities Act of 1933 and commercial paper issuances, as well as most of its payment guarantees and indemnifications, and NEECH has guaranteed certain debt and other obligations of subsidiaries within the NEER segment. Certain guarantee arrangements described above contain requirements for NEECH and FPL to maintain a specified credit rating.

NEE fully and unconditionally guarantees NEECH debentures pursuant to a guarantee agreement, dated as of June 1, 1999 (1999 guarantee) and NEECH junior subordinated debentures pursuant to an indenture, dated as of September 1, 2006 (2006 guarantee). The 1999 guarantee is an unsecured obligation of NEE and ranks equally and ratably with all other unsecured and unsubordinated indebtedness of NEE. The 2006 guarantee is unsecured and subordinate and junior in right of payment to NEE senior indebtedness (as defined therein). No payment on those junior subordinated debentures may be made under the 2006 guarantee until all NEE senior indebtedness has been paid in full in certain circumstances. NEE’s and NEECH’s ability to meet their financial obligations are primarily dependent on their subsidiaries’ net income, cash flows and their ability to pay upstream dividends or to repay funds to NEE and NEECH. The dividend-paying ability of some of the subsidiaries is limited by contractual restrictions which are contained in outstanding financing agreements.

Summarized financial information of NEE and NEECH is as follows:

						Nine Months Ended September 30, 2023																		Year Ended December 31, 2022
						Issuer/Guarantor Combined**(a)**						NEECH Consolidated**(b)**						NEE Consolidated**(b)**						Issuer/Guarantor Combined(a)						NEECH Consolidated(b)						NEE Consolidated(b)
						(millions)
Operating revenues						$	(13)					$	7,162					$	21,236					$	(16)					$	3,848					$	20,956
Operating income (loss)						$	(259)					$	2,882					$	7,577					$	(339)					$	(978)					$	4,081
Net income (loss)						$	(25)					$	1,964					$	5,367					$	150					$	(453)					$	3,246
Net income (loss) attributable to NEE/NEECH						$	(25)					$	2,696					$	6,100					$	150					$	448					$	4,147

						September 30, 2023																		December 31, 2022
						Issuer/Guarantor Combined**(a)**						NEECH Consolidated**(b)**						NEE Consolidated**(b)**						Issuer/Guarantor Combined(a)						NEECH Consolidated(b)						NEE Consolidated(b)
						(millions)
Total current assets						$	915					$	8,283					$	14,244					$	376					$	8,087					$	13,490
Total noncurrent assets						$	2,787					$	73,503					$	157,430					$	2,861					$	64,766					$	145,445
Total current liabilities						$	9,604					$	20,179					$	28,496					$	5,922					$	18,840					$	26,695
Total noncurrent liabilities						$	29,547					$	44,893					$	86,610					$	29,223					$	44,724					$	82,804
Redeemable noncontrolling interests						$	—					$	318					$	318					$	—					$	1,110					$	1,110
Noncontrolling interests						$	—					$	9,155					$	9,155					$	—					$	9,097					$	9,097

————————————
(a)			Excludes intercompany transactions, and investments in, and equity in earnings of, subsidiaries.
(b)			Information has been prepared on the same basis of accounting as NEE's condensed consolidated financial statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical accounting policies are those that NEE believes are both most important to the portrayal of its financial condition and results of operations, and require complex, subjective judgments, often as a result of the need to make estimates and assumptions about the effect of matters that are inherently uncertain. Judgments and uncertainties affecting the application of those policies may result in materially different amounts being reported under different conditions or using different assumptions. NEE’s critical accounting policies were reported in NEE’s 2022 Form 10-K. There have been no material changes regarding these critical accounting policies other than discussed below.

See Note 3 – Nonrecurring Fair Value Measurements for a discussion of an impairment analysis related to NextEra Energy Resources’ equity method investment in NEP.

ENERGY MARKETING AND TRADING AND MARKET RISK SENSITIVITY

NEE and FPL are exposed to risks associated with adverse changes in commodity prices, interest rates and equity prices. Financial instruments and positions affecting the financial statements of NEE and FPL described below are held primarily for purposes other than trading. Market risk is measured as the potential loss in fair value resulting from hypothetical reasonably possible changes in commodity prices, interest rates or equity prices over the next year. Management has established risk management policies to monitor and manage such market risks, as well as credit risks.

Commodity Price Risk

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. In addition, NEE, through NEER, uses derivatives to optimize the value of its power generation and gas infrastructure assets and engages in power and fuel marketing and trading activities to take advantage of expected future favorable price movements. See Note 2.

The changes in the fair value of NEE's consolidated subsidiaries' energy contract derivative instruments for the three and nine months ended September 30, 2023 were as follows:

									Hedges on Owned Assets
			Trading						Non- Qualifying						FPL Cost Recovery Clauses												NEE Total
			(millions)
Three Months Ended September 30, 2023
Fair value of contracts outstanding at June 30, 2023			$	1,265					$	(1,755)					$	5											$	(485)
Reclassification to realized at settlement of contracts			(73)						(47)						(8)												(128)
Value of contracts acquired			11						5						—												16
Net option premium purchases (issuances)			19						3						—												22
Changes in fair value excluding reclassification to realized			109						(390)						2												(279)
Fair value of contracts outstanding at September 30, 2023			1,331						(2,184)						(1)												(854)
Net margin cash collateral paid (received)																											973
Total mark-to-market energy contract net assets (liabilities) at September 30, 2023			$	1,331					$	(2,184)					$	(1)											$	119

									Hedges on Owned Assets
			Trading						Non- Qualifying						FPL Cost Recovery Clauses												NEE Total
			(millions)
Nine Months Ended September 30, 2023
Fair value of contracts outstanding at December 31, 2022			$	1,177					$	(3,921)					$	16											$	(2,728)
Reclassification to realized at settlement of contracts			(224)						213						(10)												(21)
Value of contracts acquired			11						95						—												106
Net option premium purchases (issuances)			149						9						—												158
Changes in fair value excluding reclassification to realized			218						1,420						(7)												1,631
Fair value of contracts outstanding at September 30, 2023			1,331						(2,184)						(1)												(854)
Net margin cash collateral paid (received)																											973
Total mark-to-market energy contract net assets (liabilities) at September 30, 2023			$	1,331					$	(2,184)					$	(1)											$	119

NEE's total mark-to-market energy contract net assets (liabilities) at September 30, 2023 shown above are included on the condensed consolidated balance sheets as follows:

			September 30, 2023
			(millions)
Current derivative assets			$	1,200
Noncurrent derivative assets			1,523
Current derivative liabilities			(781)
Noncurrent derivative liabilities			(1,823)
NEE's total mark-to-market energy contract net assets			$	119

The sources of fair value estimates and maturity of energy contract derivative instruments at September 30, 2023 were as follows:

						Maturity
						2023						2024						2025						2026						2027						Thereafter						Total
						(millions)
Trading:
Quoted prices in active markets for identical assets						$	(222)					$	(538)					$	(345)					$	(125)					$	(75)					$	12					$	(1,293)
Significant other observable inputs						124						632						589						302						181						131						1,959
Significant unobservable inputs						198						154						51						26						29						207						665
Total						100						248						295						203						135						350						1,331
Owned Assets – Non-Qualifying:
Quoted prices in active markets for identical assets						(3)						(36)						(84)						(66)						(32)						(27)						(248)
Significant other observable inputs						(155)						(446)						(446)						(320)						(223)						(365)						(1,955)
Significant unobservable inputs						37						26						6						(3)						(1)						(46)						19
Total						(121)						(456)						(524)						(389)						(256)						(438)						(2,184)
Owned Assets – FPL Cost Recovery Clauses:
Quoted prices in active markets for identical assets						—						—						—						—						—						—						—
Significant other observable inputs						(2)						(4)						(1)						—						(1)						—						(8)
Significant unobservable inputs						2						4						4						(3)						—						—						7
Total						—						—						3						(3)						(1)						—						(1)
Total sources of fair value						$	(21)					$	(208)					$	(226)					$	(189)					$	(122)					$	(88)					$	(854)

The changes in the fair value of NEE's consolidated subsidiaries' energy contract derivative instruments for the three and nine months ended September 30, 2022 were as follows:

									Hedges on Owned Assets
			Trading						Non- Qualifying						FPL Cost Recovery Clauses									NEE Total
			(millions)
Three Months Ended September 30, 2022
Fair value of contracts outstanding at June 30, 2022			$	1,004					$	(4,301)					$	98								$	(3,199)
Reclassification to realized at settlement of contracts			(93)						174						(198)									(117)
Value of contracts acquired			—						15						—									15
Net option premium purchases (issuances)			14						3						—									17
Changes in fair value excluding reclassification to realized			310						(432)						130									8
Fair value of contracts outstanding at September 30, 2022			1,235						(4,541)						30									(3,276)
Net margin cash collateral paid (received)																								473
Total mark-to-market energy contract net assets (liabilities) at September 30, 2022			$	1,235					$	(4,541)					$	30								$	(2,803)

									Hedges on Owned Assets
			Trading						Non- Qualifying						FPL Cost Recovery Clauses						NEE Total
			(millions)
Nine Months Ended September 30, 2022
Fair value of contracts outstanding at December 31, 2021			$	978					$	(1,392)					$	1					$	(413)
Reclassification to realized at settlement of contracts			(273)						691						(188)						230
Value of contracts acquired			(1)						29						—						28
Net option premium purchases (issuances)			142						11						—						153
Changes in fair value excluding reclassification to realized			389						(3,880)						217						(3,274)
Fair value of contracts outstanding at September 30, 2022			1,235						(4,541)						30						(3,276)
Net margin cash collateral paid (received)																					473
Total mark-to-market energy contract net assets (liabilities) at September 30, 2022			$	1,235					$	(4,541)					$	30					$	(2,803)

With respect to commodities, NEE's Exposure Management Committee (EMC), which is comprised of certain members of senior management, and NEE's chief executive officer are responsible for the overall approval of market risk management policies and the delegation of approval and authorization levels. The EMC and NEE's chief executive officer receive periodic updates on market positions and related exposures, credit exposures and overall risk management activities.

NEE uses a value-at-risk (VaR) model to measure commodity price market risk in its trading and mark-to-market portfolios. The VaR is the estimated loss of market value based on a one-day holding period at a 95% confidence level using historical simulation methodology. The VaR figures are as follows:

			Trading(a)																		Non-Qualifying Hedges and Hedges in FPL Cost Recovery Clauses(b)																		Total
			FPL						NEER						NEE						FPL						NEER						NEE						FPL						NEER						NEE
																											(millions)
December 31, 2022			$	—					$	41					$	41					$	3					$	148					$	145					$	3					$	125					$	120
September 30, 2023			$	—					$	7					$	7					$	3					$	71					$	70					$	3					$	69					$	68
Average for the nine months ended September 30, 2023			$	—					$	14					$	14					$	3					$	138					$	137					$	3					$	137					$	136

———————————————

(a) The VaR figures for the trading portfolio include positions that are marked to market. Taking into consideration offsetting unmarked non-derivative positions, such as physical inventory, the trading VaR figures were approximately $1 million and $18 million at September 30, 2023 and December 31, 2022, respectively.

(b) Non-qualifying hedges are employed to reduce the market risk exposure to physical assets or contracts which are not marked to market. The VaR figures for the non-qualifying hedges and hedges in FPL cost recovery clauses category do not represent the economic exposure to commodity price movements.

Interest Rate Risk

NEE's and FPL's financial results are exposed to risk resulting from changes in interest rates as a result of their respective outstanding and expected future issuances of debt, investments in special use funds and other investments. NEE and FPL manage their respective interest rate exposure by monitoring current interest rates, entering into interest rate contracts and using a combination of fixed rate and variable rate debt. Interest rate contracts are used to mitigate and adjust interest rate exposure when deemed appropriate based upon market conditions or when required by financing agreements.

The following are estimates of the fair value of NEE's and FPL's financial instruments that are exposed to interest rate risk:

			September 30, 2023												December 31, 2022
			Carrying Amount						Estimated Fair Value**(a)**						Carrying Amount						Estimated Fair Value(a)
			(millions)
NEE:
Special use funds			$	2,083					$	2,083					$	2,061					$	2,061
Other investments, primarily debt securities			$	1,929					$	1,929					$	756					$	756
Long-term debt, including current portion			$	67,162					$	60,952					$	61,889					$	57,892
Interest rate contracts – net unrealized gains			$	1,016					$	1,016					$	392					$	392
FPL:
Special use funds			$	1,563					$	1,563					$	1,572					$	1,572
Other investments – debt securities			$	262					$	262					$	114					$	114
Long-term debt, including current portion			$	24,889					$	22,275					$	21,002					$	19,364

———————————————

(a)See Notes 2 and 3.

The special use funds of NEE and FPL consist of restricted funds set aside to cover the cost of storm damage for FPL and for the decommissioning of NEE's and FPL's nuclear power plants. A portion of these funds is invested in fixed income debt securities primarily carried at estimated fair value. At FPL, changes in fair value, including any credit losses, result in a corresponding adjustment to the related regulatory asset or liability accounts based on current regulatory treatment. The changes in fair value for NEE's non-rate regulated operations result in a corresponding adjustment to OCI, except for credit losses and unrealized losses on available for sale securities intended or required to be sold prior to recovery of the amortized cost basis, which are reported in current period earnings. Because the funds set aside by FPL for storm damage could be needed at any time, the related investments are generally more liquid and, therefore, are less sensitive to changes in interest rates. The nuclear decommissioning funds, in contrast, are generally invested in longer-term securities.

At September 30, 2023, NEE had interest rate contracts with a notional amount of approximately $20.0 billion to manage exposure to the variability of cash flows primarily associated with expected future and outstanding debt issuances at NEECH and NEER. In October 2023, NEECH entered into forward starting interest rate swap agreements with a notional amount of $4.7 billion to manage interest rate risk associated with forecasted debt issuances. See Note 2.

Based upon a hypothetical 10% decrease in interest rates, the fair value of NEE's net liabilities would increase by approximately $2,724 million ($1,103 million for FPL) at September 30, 2023.

Equity Price Risk

NEE and FPL are exposed to risk resulting from changes in prices for equity securities. For example, NEE’s nuclear decommissioning reserve funds include marketable equity securities carried at their market value of approximately $4,757 million and $4,437 million ($3,183 million and $2,905 million for FPL) at September 30, 2023 and December 31, 2022, respectively. NEE's and FPL’s investment strategy for equity securities in their nuclear decommissioning reserve funds emphasizes marketable securities which are broadly diversified. At September 30, 2023, a hypothetical 10% decrease in the prices quoted on stock exchanges would result in an approximately $451 million ($297 million for FPL) reduction in fair value. For FPL, a corresponding adjustment would be made to the related regulatory asset or liability accounts based on current regulatory treatment, and for NEE’s non-rate regulated operations, a corresponding amount would be 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. See Note 3.

Credit Risk

NEE and its subsidiaries, including FPL, are also exposed to credit risk through their energy marketing and trading operations. Credit risk is the risk that a financial loss will be incurred if a counterparty to a transaction does not fulfill its financial obligation. NEE manages counterparty credit risk for its subsidiaries with energy marketing and trading operations through established policies, including counterparty credit limits, and in some cases credit enhancements, such as cash prepayments, letters of credit, cash and other collateral and guarantees.

Credit risk is also managed through the use of master netting agreements. NEE’s credit department monitors current and forward credit exposure to counterparties and their affiliates, both on an individual and an aggregate basis. For all derivative and contractual transactions, NEE’s energy marketing and trading operations, which include FPL’s energy marketing and trading division, are exposed to losses in the event of nonperformance by counterparties to these transactions. Some relevant considerations when assessing NEE’s energy marketing and trading operations’ credit risk exposure include the following:

• Operations are primarily concentrated in the energy industry.

• Trade receivables and other financial instruments are predominately with energy, utility and financial services related companies, as well as municipalities, cooperatives and other trading companies in the U.S.

• Overall credit risk is managed through established credit policies and is overseen by the EMC.

• Prospective and existing customers are reviewed for creditworthiness based upon established standards, with customers not meeting minimum standards providing various credit enhancements or secured payment terms, such as letters of credit or the posting of margin cash collateral.

• Master netting agreements are used to offset cash and noncash gains and losses arising from derivative instruments with the same counterparty. NEE’s policy is to have master netting agreements in place with significant counterparties.

Based on NEE’s policies and risk exposures related to credit, NEE and FPL do not anticipate a material adverse effect on their financial statements as a result of counterparty nonperformance. At September 30, 2023, NEE's credit risk exposure associated with its energy marketing and trading operations, taking into account collateral and contractual netting rights, totaled approximately $3.1 billion ($83 million for FPL), of which approximately 90% (99% for FPL) was with companies that have investment grade credit ratings. See Note 2.