NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The accompanying condensed consolidated financial statements should be read in conjunction with the
2016
Form 10-K. In the opinion of NEE and FPL management, all adjustments (consisting of normal recurring accruals) considered necessary for fair financial statement presentation have been made. 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. 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 (income) cost for the plans are as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
|
Pension Benefits
|
|
Postretirement Benefits
|
|
Three Months Ended
June 30,
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(millions)
|
Service cost
|
$
|
17
|
|
|
$
|
15
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
31
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
21
|
|
|
26
|
|
|
2
|
|
|
4
|
|
|
42
|
|
|
52
|
|
|
4
|
|
|
7
|
|
Expected return on plan assets
|
(68
|
)
|
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
(135
|
)
|
|
(130
|
)
|
|
—
|
|
|
—
|
|
Amortization of prior service cost (benefit)
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|
(2
|
)
|
Special termination benefits
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Postretirement benefits settlement
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Net periodic (income) cost at NEE
|
$
|
6
|
|
|
$
|
(23
|
)
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
(23
|
)
|
|
$
|
(46
|
)
|
|
$
|
4
|
|
|
$
|
6
|
|
Net periodic (income) cost at FPL
|
$
|
6
|
|
|
$
|
(14
|
)
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
(12
|
)
|
|
$
|
(29
|
)
|
|
$
|
3
|
|
|
$
|
5
|
|
Amendments to Presentation of Retirement Benefits
- In March 2017, the FASB issued an accounting standards update that requires certain changes in classification of components of net periodic pension and postretirement benefit costs within the income statement and allows only the service cost component to be eligible for capitalization. This standards update will be applied using the retrospective approach for presentation of the components of net periodic pension and postretirement benefit costs and the prospective approach for capitalization of service cost. NEE and FPL will apply this standards update on January 1, 2018, and are currently evaluating the impact the adoption will have on their consolidated financial statements.
2. Derivative Instruments
NEE and FPL use derivative instruments (primarily swaps, options, futures and forwards) to manage the commodity price risk 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 gas 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.
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
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; fuel purchases used in the production of electricity are recognized in fuel, purchased power and interchange expense; and the equity method investees' related activity is recognized in equity in earnings of equity method investees in NEE's condensed consolidated statements of income. 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 primarily 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 in NEE's condensed consolidated statements of income. In addition, for the
six months ended June 30, 2017 and 2016
, NEE reclassified approximately
$2 million
(
$1 million
after-tax) and
$15 million
(
$9 million
after tax), respectively, from AOCI to interest expense primarily because it became probable that related future transactions being hedged would not occur. At
June 30, 2017
, NEE's AOCI included amounts related to discontinued interest rate cash flow hedges with expiration dates through March 2035 and foreign currency cash flow hedges with expiration dates through September 2030. Approximately
$29 million
of net losses included in AOCI at
June 30, 2017
is expected to be reclassified into earnings within the next 12 months as the principal and/or interest payments are made. Such amounts assume no change in scheduled principal payments.
Fair Value of Derivative Instruments
- The tables below present NEE's and FPL's gross derivative positions at
June 30, 2017
and
December 31, 2016
, 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 (see Note 3 - Recurring Fair Value Measurements for netting information), as well as the location of the net derivative position on the condensed consolidated balance sheets.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
Gross Basis
|
|
Net Basis
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
(millions)
|
NEE:
|
|
|
|
|
|
|
|
Commodity contracts
|
$
|
4,409
|
|
|
$
|
2,883
|
|
|
$
|
1,814
|
|
|
$
|
429
|
|
Interest rate contracts
|
154
|
|
|
306
|
|
|
152
|
|
|
304
|
|
Foreign currency contracts
|
—
|
|
|
43
|
|
|
8
|
|
|
51
|
|
Total fair values
|
$
|
4,563
|
|
|
$
|
3,232
|
|
|
$
|
1,974
|
|
|
$
|
784
|
|
|
|
|
|
|
|
|
|
FPL:
|
|
|
|
|
|
|
|
Commodity contracts
|
$
|
27
|
|
|
$
|
11
|
|
|
$
|
18
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
Net fair value by NEE balance sheet line item:
|
|
|
|
|
|
|
|
Current derivative assets
(a)
|
|
|
|
|
$
|
546
|
|
|
|
Noncurrent derivative assets
(b)
|
|
|
|
|
1,428
|
|
|
|
Current derivative liabilities
|
|
|
|
|
|
|
$
|
277
|
|
Noncurrent derivative liabilities
|
|
|
|
|
|
|
507
|
|
Total derivatives
|
|
|
|
|
$
|
1,974
|
|
|
$
|
784
|
|
|
|
|
|
|
|
|
|
Net fair value by FPL balance sheet line item:
|
|
|
|
|
|
|
|
Current derivative assets
|
|
|
|
|
$
|
18
|
|
|
|
Current other liabilities
|
|
|
|
|
|
|
$
|
2
|
|
Total derivatives
|
|
|
|
|
$
|
18
|
|
|
$
|
2
|
|
———————————————
|
|
(a)
|
Reflects the netting of approximately
$125 million
in margin cash collateral received from counterparties.
|
|
|
(b)
|
Reflects the netting of approximately
$16 million
in margin cash collateral received from counterparties.
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
Gross Basis
|
|
Net Basis
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
(millions)
|
NEE:
|
|
|
|
|
|
|
|
Commodity contracts
|
$
|
4,590
|
|
|
$
|
2,968
|
|
|
$
|
1,938
|
|
|
$
|
483
|
|
Interest rate contracts
|
288
|
|
|
284
|
|
|
296
|
|
|
292
|
|
Foreign currency contracts
|
1
|
|
|
106
|
|
|
1
|
|
|
106
|
|
Total fair values
|
$
|
4,879
|
|
|
$
|
3,358
|
|
|
$
|
2,235
|
|
|
$
|
881
|
|
|
|
|
|
|
|
|
|
FPL:
|
|
|
|
|
|
|
|
Commodity contracts
|
$
|
212
|
|
|
$
|
4
|
|
|
$
|
209
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
Net fair value by NEE balance sheet line item:
|
|
|
|
|
|
|
|
Current derivative assets
(a)
|
|
|
|
|
$
|
885
|
|
|
|
Noncurrent derivative assets
(b)
|
|
|
|
|
1,350
|
|
|
|
Current derivative liabilities
|
|
|
|
|
|
|
$
|
404
|
|
Noncurrent derivative liabilities
|
|
|
|
|
|
|
477
|
|
Total derivatives
|
|
|
|
|
$
|
2,235
|
|
|
$
|
881
|
|
|
|
|
|
|
|
|
|
Net fair value by FPL balance sheet line item:
|
|
|
|
|
|
|
|
Current derivative assets
|
|
|
|
|
$
|
209
|
|
|
|
Current other liabilities
|
|
|
|
|
|
|
$
|
1
|
|
Total derivatives
|
|
|
|
|
$
|
209
|
|
|
$
|
1
|
|
———————————————
|
|
(a)
|
Reflects the netting of approximately
$96 million
in margin cash collateral received from counterparties.
|
|
|
(b)
|
Reflects the netting of approximately
$71 million
in margin cash collateral received from counterparties.
|
At
June 30, 2017
and
December 31, 2016
, NEE had approximately
$11 million
and
$5 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
June 30, 2017
and
December 31, 2016
, NEE had approximately
$160 million
and
$129 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.
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
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(millions)
|
Commodity contracts:
(a)
|
|
|
|
|
|
|
|
Operating revenues
|
$
|
132
|
|
|
$
|
(92
|
)
|
|
$
|
424
|
|
|
$
|
238
|
|
Fuel, purchased power and interchange
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(2
|
)
|
Foreign currency contracts - interest expense
|
36
|
|
|
52
|
|
|
57
|
|
|
81
|
|
Foreign currency contracts - other - net
|
(2
|
)
|
|
1
|
|
|
(2
|
)
|
|
3
|
|
Interest rate contracts - interest expense
|
(145
|
)
|
|
(278
|
)
|
|
(190
|
)
|
|
(457
|
)
|
Losses reclassified from AOCI to interest expense:
|
|
|
|
|
|
|
|
Interest rate contracts
|
(13
|
)
|
|
(25
|
)
|
|
(23
|
)
|
|
(53
|
)
|
Foreign currency contracts
|
(77
|
)
|
|
(3
|
)
|
|
(79
|
)
|
|
(6
|
)
|
Total
|
$
|
(69
|
)
|
|
$
|
(349
|
)
|
|
$
|
187
|
|
|
$
|
(196
|
)
|
———————————————
|
|
(a)
|
For the
three and six months ended June 30, 2017
, FPL recorded losses of approximately
$47 million
and
$152 million
, respectively, related to commodity contracts as regulatory assets on its condensed consolidated balance sheets. For the
three and six months ended June 30, 2016
, FPL recorded gains of approximately
$178 million
and
$70 million
, respectively, related to commodity contracts as regulatory liabilities on its condensed consolidated balance sheets.
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
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 their 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
Commodity Type
|
|
NEE
|
|
FPL
|
|
NEE
|
|
FPL
|
|
|
(millions)
|
Power
|
|
(80
|
)
|
|
MWh
|
|
—
|
|
|
|
|
(84
|
)
|
|
MWh
|
|
—
|
|
|
|
Natural gas
|
|
1,033
|
|
|
MMBtu
|
|
466
|
|
|
MMBtu
|
|
1,002
|
|
|
MMBtu
|
|
618
|
|
|
MMBtu
|
Oil
|
|
(16
|
)
|
|
barrels
|
|
—
|
|
|
|
|
(7
|
)
|
|
barrels
|
|
—
|
|
|
|
At
June 30, 2017
and
December 31, 2016
, NEE had interest rate contracts with notional amounts totaling approximately
$14.9 billion
and
$15.1 billion
, respectively, and foreign currency contracts with notional amounts totaling approximately
$719 million
and
$705 million
, 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
June 30, 2017
and
December 31, 2016
, the aggregate fair value of NEE's derivative instruments with credit-risk-related contingent features that were in a liability position was approximately
$1.1 billion
(
$10 million
for FPL) and
$1.3 billion
(
$5 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 two 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
$130 million
(
none
at
FPL
) as of
June 30, 2017
and
$110 million
(
none
at FPL) as of
December 31, 2016
.
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
$1.0 billion
(
$35 million
at FPL) as of
June 30, 2017
and
$990 million
(
$10 million
at FPL) as of
December 31, 2016
. 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
$245 million
(
$150 million
at FPL) as of
June 30, 2017
and
$225 million
(
$115 million
at FPL) as of
December 31, 2016
.
Collateral related to derivatives may be posted in the form of cash or credit support in the normal course of business. At
June 30, 2017
and
December 31, 2016
, applicable NEE subsidiaries have posted approximately
$2 million
(
none
at FPL) and
$1 million
(
none
at FPL), respectively, in cash and
$42 million
(
none
at FPL) and
$30 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 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 where 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.
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
3. Fair Value Measurements
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.
Cash Equivalents
and Restricted Cash
- 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.
Derivative Instruments
- NEE and FPL measure the fair value of commodity contracts using a combination of market and income approaches utilizing prices observed on commodities exchanges and in the OTC markets, or through the use of industry-standard valuation techniques, such as option modeling or discounted cash flows techniques, incorporating both observable and unobservable valuation inputs. The resulting measurements are the best estimate of fair value as represented by the transfer of the asset or liability through an orderly transaction in the marketplace at the measurement date.
Most exchange-traded derivative assets and liabilities are valued directly using unadjusted quoted prices. For exchange-traded derivative assets and liabilities where the principal market is deemed to be inactive based on average daily volumes and open interest, the measurement is established using settlement prices from the exchanges, and therefore considered to be valued using other observable inputs.
NEE, through its subsidiaries, including FPL, also enters into OTC commodity contract derivatives. The majority of these contracts are transacted at liquid trading points, and the prices for these contracts are verified using quoted prices in active markets from exchanges, brokers or pricing services for similar contracts.
NEE, through NEER, also enters into full requirements contracts, which, in most cases, meet the definition of derivatives and are measured at fair value. These contracts typically have one or more inputs that are not observable and are significant to the valuation of the contract. In addition, certain exchange and non-exchange traded derivative options at NEE have one or more significant inputs that are not observable, and are valued using industry-standard option models.
In all cases where NEE and FPL use significant unobservable inputs for the valuation of a commodity contract, consideration is given to the assumptions that market participants would use in valuing the asset or liability. The primary input to the valuation models for commodity contracts is the forward commodity curve for the respective instruments. Other inputs include, but are not limited to, assumptions about market liquidity, volatility, correlation and contract duration as more fully described below in Significant Unobservable Inputs Used in Recurring Fair Value Measurements. In instances where the reference markets are deemed to be inactive or do not have transactions for a similar contract, the derivative assets and liabilities may be valued using significant other observable inputs and potentially significant unobservable inputs. In such instances, the valuation for these contracts is established using techniques including extrapolation from or interpolation between actively traded contracts, or estimated basis adjustments from liquid trading points. NEE and FPL regularly evaluate and validate the inputs used to determine fair value by a number of methods, consisting of various market price verification procedures, including the use of pricing services and multiple broker quotes to support the market price of the various commodities. In all cases where there are assumptions and models used to generate inputs for valuing derivative assets and liabilities, the review and verification of the assumptions, models and changes to the models are undertaken by individuals that are independent of those responsible for estimating fair value.
NEE uses interest rate contracts and foreign currency contracts to mitigate and adjust interest rate and foreign currency exchange exposure related primarily to certain outstanding and expected future debt issuances and borrowings when deemed appropriate based on market conditions or when required by financing agreements. NEE estimates the fair value of these derivatives using an income approach based on a discounted cash flows valuation technique utilizing the net amount of estimated future cash inflows and outflows related to the agreements.
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Recurring Fair Value Measurements -
NEE's and FPL's financial assets and liabilities and other fair value measurements made on a recurring basis by fair value hierarchy level are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
Total
|
|
|
(millions)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents and restricted cash:
(b)
|
|
|
|
|
|
|
|
|
|
|
NEE - equity securities
|
$
|
359
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
359
|
|
|
FPL - equity securities
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
104
|
|
|
Special use funds:
(c)
|
|
|
|
|
|
|
|
|
|
|
NEE:
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
1,547
|
|
|
$
|
1,621
|
|
(d)
|
$
|
—
|
|
|
|
|
$
|
3,168
|
|
|
U.S. Government and municipal bonds
|
$
|
354
|
|
|
$
|
162
|
|
|
$
|
—
|
|
|
|
|
$
|
516
|
|
|
Corporate debt securities
|
$
|
1
|
|
|
$
|
803
|
|
|
$
|
—
|
|
|
|
|
$
|
804
|
|
|
Mortgage-backed securities
|
$
|
—
|
|
|
$
|
458
|
|
|
$
|
—
|
|
|
|
|
$
|
458
|
|
|
Other debt securities
|
$
|
—
|
|
|
$
|
117
|
|
|
$
|
—
|
|
|
|
|
$
|
117
|
|
|
FPL:
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
424
|
|
|
$
|
1,478
|
|
(d)
|
$
|
—
|
|
|
|
|
$
|
1,902
|
|
|
U.S. Government and municipal bonds
|
$
|
253
|
|
|
$
|
135
|
|
|
$
|
—
|
|
|
|
|
$
|
388
|
|
|
Corporate debt securities
|
$
|
—
|
|
|
$
|
575
|
|
|
$
|
—
|
|
|
|
|
$
|
575
|
|
|
Mortgage-backed securities
|
$
|
—
|
|
|
$
|
351
|
|
|
$
|
—
|
|
|
|
|
$
|
351
|
|
|
Other debt securities
|
$
|
—
|
|
|
$
|
106
|
|
|
$
|
—
|
|
|
|
|
$
|
106
|
|
|
Other investments:
|
|
|
|
|
|
|
|
|
|
|
NEE:
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
23
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
|
|
$
|
33
|
|
|
Debt securities
|
$
|
7
|
|
|
$
|
137
|
|
|
$
|
—
|
|
|
|
|
$
|
144
|
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
NEE:
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
$
|
1,543
|
|
|
$
|
1,541
|
|
|
$
|
1,325
|
|
|
$
|
(2,595
|
)
|
|
$
|
1,814
|
|
(e)
|
Interest rate contracts
|
$
|
—
|
|
|
$
|
154
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
152
|
|
(e)
|
Foreign currency contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
8
|
|
(e)
|
FPL - commodity contracts
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
1
|
|
|
$
|
(9
|
)
|
|
$
|
18
|
|
(e)
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
NEE:
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
$
|
1,461
|
|
|
$
|
938
|
|
|
$
|
484
|
|
|
$
|
(2,454
|
)
|
|
$
|
429
|
|
(e)
|
Interest rate contracts
|
$
|
—
|
|
|
$
|
189
|
|
|
$
|
117
|
|
|
$
|
(2
|
)
|
|
$
|
304
|
|
(e)
|
Foreign currency contracts
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
51
|
|
(e)
|
FPL - commodity contracts
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
3
|
|
|
$
|
(9
|
)
|
|
$
|
2
|
|
(e)
|
———————————————
|
|
(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)
|
Includes restricted cash of approximately
$142 million
(
$92 million
for FPL) in other current assets on the condensed consolidated balance sheets.
|
|
|
(c)
|
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.
|
|
|
(d)
|
Primarily invested in commingled funds whose underlying securities would be Level 1 if those securities were held directly by NEE or FPL.
|
|
|
(e)
|
See Note 2 - Fair Value of Derivative Instruments for a reconciliation of net derivatives to 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, 2016
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
(a)
|
|
Total
|
|
|
(millions)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents and restricted cash:
(b)
|
|
|
|
|
|
|
|
|
|
|
NEE - equity securities
|
$
|
982
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
982
|
|
|
FPL - equity securities
|
$
|
120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
120
|
|
|
Special use funds:
(c)
|
|
|
|
|
|
|
|
|
|
|
NEE:
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
1,410
|
|
|
$
|
1,503
|
|
(d)
|
$
|
—
|
|
|
|
|
$
|
2,913
|
|
|
U.S. Government and municipal bonds
|
$
|
296
|
|
|
$
|
170
|
|
|
$
|
—
|
|
|
|
|
$
|
466
|
|
|
Corporate debt securities
|
$
|
1
|
|
|
$
|
763
|
|
|
$
|
—
|
|
|
|
|
$
|
764
|
|
|
Mortgage-backed securities
|
$
|
—
|
|
|
$
|
498
|
|
|
$
|
—
|
|
|
|
|
$
|
498
|
|
|
Other debt securities
|
$
|
—
|
|
|
$
|
81
|
|
|
$
|
—
|
|
|
|
|
$
|
81
|
|
|
FPL:
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
373
|
|
|
$
|
1,372
|
|
(d)
|
$
|
—
|
|
|
|
|
$
|
1,745
|
|
|
U.S. Government and municipal bonds
|
$
|
221
|
|
|
$
|
141
|
|
|
$
|
—
|
|
|
|
|
$
|
362
|
|
|
Corporate debt securities
|
$
|
—
|
|
|
$
|
547
|
|
|
$
|
—
|
|
|
|
|
$
|
547
|
|
|
Mortgage-backed securities
|
$
|
—
|
|
|
$
|
384
|
|
|
$
|
—
|
|
|
|
|
$
|
384
|
|
|
Other debt securities
|
$
|
—
|
|
|
$
|
70
|
|
|
$
|
—
|
|
|
|
|
$
|
70
|
|
|
Other investments:
|
|
|
|
|
|
|
|
|
|
|
NEE:
|
|
|
|
|
|
|
|
|
|
|
Equity securities
|
$
|
26
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
|
|
$
|
35
|
|
|
Debt securities
|
$
|
8
|
|
|
$
|
153
|
|
|
$
|
—
|
|
|
|
|
$
|
161
|
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
NEE:
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
$
|
1,563
|
|
|
$
|
1,827
|
|
|
$
|
1,200
|
|
|
$
|
(2,652
|
)
|
|
$
|
1,938
|
|
(e)
|
Interest rate contracts
|
$
|
—
|
|
|
$
|
285
|
|
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
296
|
|
(e)
|
Foreign currency contracts
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
(e)
|
FPL - commodity contracts
|
$
|
—
|
|
|
$
|
208
|
|
|
$
|
4
|
|
|
$
|
(3
|
)
|
|
$
|
209
|
|
(e)
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
NEE:
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
$
|
1,476
|
|
|
$
|
980
|
|
|
$
|
512
|
|
|
$
|
(2,485
|
)
|
|
$
|
483
|
|
(e)
|
Interest rate contracts
|
$
|
—
|
|
|
$
|
171
|
|
|
$
|
113
|
|
|
$
|
8
|
|
|
$
|
292
|
|
(e)
|
Foreign currency contracts
|
$
|
—
|
|
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
106
|
|
(e)
|
FPL - commodity contracts
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
|
$
|
1
|
|
(e)
|
———————————————
|
|
(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)
|
Includes restricted cash of approximately
$164 million
(
$120 million
for FPL) in other current assets on the condensed consolidated balance sheets.
|
|
|
(c)
|
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.
|
|
|
(d)
|
Primarily invested in commingled funds whose underlying securities would be Level 1 if those securities were held directly by NEE or FPL.
|
|
|
(e)
|
See Note 2 - Fair Value of Derivative Instruments for a reconciliation of net derivatives to 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)
Significant Unobservable Inputs Used in Recurring Fair Value Measurements
- The valuation of certain commodity contracts requires the use of significant unobservable inputs. All forward price, implied volatility, implied correlation and interest rate inputs used in the valuation of such contracts are directly based on third-party market data, such as broker quotes and exchange settlements, when that data is available. If third-party market data is not available, then industry standard methodologies are used to develop inputs that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Observable inputs, including some forward prices, implied volatilities and interest rates used for determining fair value are updated daily to reflect the best available market information. Unobservable inputs which are related to observable inputs, such as illiquid portions of forward price or volatility curves, are updated daily as well, using industry standard techniques such as interpolation and extrapolation, combining observable forward inputs supplemented by historical market and other relevant data. Other unobservable inputs, such as implied correlations, 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.
All price, volatility, correlation and customer migration inputs used in valuation are subject to validation by the Trading Risk Management group. The Trading Risk Management group performs a risk management function responsible for assessing credit, market and operational risk impact, reviewing valuation methodology and modeling, confirming transactions, monitoring approval processes and developing and monitoring trading limits. The Trading Risk Management group is separate from the transacting group. For markets where independent third-party data is readily available, validation is conducted daily by directly reviewing this market data against inputs utilized by the transacting group, and indirectly by reviewing daily risk reports. For markets where independent third-party data is not readily available, additional analytical reviews are performed on at least a quarterly basis. These analytical reviews are designed to ensure that all price and volatility curves used for fair valuing transactions are adequately validated each quarter, and are reviewed and approved by the Trading Risk Management group. In addition, other valuation assumptions such as implied correlations and customer migration rates are reviewed and approved by the Trading Risk Management group on a periodic basis. Newly created models used in the valuation process are also subject to testing and approval by the Trading Risk Management group prior to use and established models are reviewed annually, or more often as needed, by the Trading Risk Management group.
On a monthly basis, the Exposure Management Committee (EMC), which is comprised of certain members of senior management, meets with representatives from the Trading Risk Management group and the transacting group to discuss NEE's and FPL's energy risk profile and operations, to review risk reports and to discuss fair value issues as necessary. The EMC develops guidelines required for an appropriate risk management control infrastructure, which includes implementation and monitoring of compliance with Trading Risk Management policy. The EMC executes its risk management responsibilities through direct oversight and delegation of its responsibilities to the Trading Risk Management group, as well as to other corporate and business unit personnel.
The significant unobservable inputs used in the valuation of NEE's commodity contracts categorized as Level 3 of the fair value hierarchy at
June 30, 2017
are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value at
|
|
Valuation
|
|
Significant
|
|
|
|
|
Transaction Type
|
|
June 30, 2017
|
|
Technique(s)
|
|
Unobservable Inputs
|
|
Range
|
|
|
Assets
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
|
|
Forward contracts - power
|
|
$
|
762
|
|
|
$
|
216
|
|
|
Discounted cash flow
|
|
Forward price (per MWh)
|
|
$—
|
—
|
$92
|
Forward contracts - gas
|
|
24
|
|
|
11
|
|
|
Discounted cash flow
|
|
Forward price (per MMBtu)
|
|
$2
|
—
|
$6
|
Options - power
|
|
33
|
|
|
22
|
|
|
Option models
|
|
Implied correlations
|
|
1%
|
—
|
100%
|
|
|
|
|
|
|
|
|
Implied volatilities
|
|
8%
|
—
|
246%
|
Options - primarily gas
|
|
187
|
|
|
208
|
|
|
Option models
|
|
Implied correlations
|
|
1%
|
—
|
100%
|
|
|
|
|
|
|
|
|
Implied volatilities
|
|
—%
|
—
|
102%
|
Full requirements and unit contingent contracts
|
|
319
|
|
|
27
|
|
|
Discounted cash flow
|
|
Forward price (per MWh)
|
|
$(20)
|
—
|
$230
|
|
|
|
|
|
|
|
|
Customer migration rate
(a)
|
|
—%
|
—
|
20%
|
Total
|
|
$
|
1,325
|
|
|
$
|
484
|
|
|
|
|
|
|
|
|
|
———————————————
|
|
(a)
|
Applies only to full requirements contracts.
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
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.
In addition, the fair value measurement of interest rate contract net liabilities related to the solar projects in Spain of approximately
$117 million
at
June 30, 2017
includes a significant credit valuation adjustment. The credit valuation adjustment, considered an unobservable input, reflects management's assessment of non-performance risk of the subsidiaries related to the solar projects in Spain that are party to the contracts.
The reconciliation of changes in the fair value of derivatives that are based on significant unobservable inputs is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
2017
|
|
2016
|
|
NEE
|
|
FPL
|
|
NEE
|
|
FPL
|
|
(millions)
|
Fair value of net derivatives based on significant unobservable inputs at March 31
|
$
|
715
|
|
|
$
|
(4
|
)
|
|
$
|
649
|
|
|
$
|
(8
|
)
|
Realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
Included in earnings
(a)
|
144
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
Included in other comprehensive income (loss)
(b)
|
(10
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
Included in regulatory assets and liabilities
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
Purchases
|
23
|
|
|
—
|
|
|
75
|
|
|
—
|
|
Settlements
|
(72
|
)
|
|
2
|
|
|
(95
|
)
|
|
4
|
|
Issuances
|
(88
|
)
|
|
—
|
|
|
(69
|
)
|
|
—
|
|
Transfers in
(c)
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Transfers out
(c)
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Fair value of net derivatives based on significant unobservable inputs at June 30
|
$
|
724
|
|
|
$
|
(2
|
)
|
|
$
|
532
|
|
|
$
|
(1
|
)
|
The amount of gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to derivatives still held at the reporting date
(d)
|
$
|
135
|
|
|
$
|
—
|
|
|
$
|
(38
|
)
|
|
$
|
—
|
|
———————————————
|
|
(a)
|
For the
three months ended June 30, 2017 and 2016
, realized and unrealized gains (losses) of approximately
$140 million
and
$(28) million
, respectively, are reflected in the condensed consolidated statements of income in operating revenues and the balance is primarily reflected in interest expense.
|
|
|
(b)
|
Reflected in net unrealized gains on foreign currency translation on the condensed consolidated statements of comprehensive income.
|
|
|
(c)
|
Transfers into Level 3 were a result of decreased observability of market data and transfers from Level 3 to Level 2 were a result of increased observability of market data. NEE's and FPL's policy is to recognize all transfers at the beginning of the reporting period.
|
|
|
(d)
|
For the
three months ended June 30, 2017 and 2016
, unrealized gains (losses) of approximately
$131 million
and
$(32) million
, respectively, are reflected in the condensed consolidated statements of income in operating revenues and the balance is reflected in interest expense.
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2017
|
|
2016
|
|
NEE
|
|
FPL
|
|
NEE
|
|
FPL
|
|
(millions)
|
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior period
|
$
|
578
|
|
|
$
|
1
|
|
|
$
|
538
|
|
|
$
|
—
|
|
Realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
Included in earnings
(a)
|
360
|
|
|
—
|
|
|
220
|
|
|
—
|
|
Included in other comprehensive income
(b)
|
(11
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
Included in regulatory assets and liabilities
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
Purchases
|
45
|
|
|
—
|
|
|
175
|
|
|
—
|
|
Settlements
|
(157
|
)
|
|
(1
|
)
|
|
(228
|
)
|
|
(1
|
)
|
Issuances
|
(104
|
)
|
|
—
|
|
|
(143
|
)
|
|
—
|
|
Transfers in
(c)
|
14
|
|
|
—
|
|
|
3
|
|
|
—
|
|
Transfers out
(c)
|
1
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
Fair value of net derivatives based on significant unobservable inputs at June 30
|
$
|
724
|
|
|
$
|
(2
|
)
|
|
$
|
532
|
|
|
$
|
(1
|
)
|
The amount of gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to derivatives still held at the reporting date
(d)
|
$
|
284
|
|
|
$
|
—
|
|
|
$
|
125
|
|
|
$
|
—
|
|
———————————————
|
|
(a)
|
For the
six months ended June 30, 2017 and 2016
, realized and unrealized gains of approximately
$356 million
and
$246 million
, respectively, are reflected in the condensed consolidated statements of income in operating revenues and the balance is primarily reflected in interest expense.
|
|
|
(b)
|
Reflected in net unrealized gains on foreign currency translation on the condensed consolidated statements of comprehensive income.
|
|
|
(c)
|
Transfers into Level 3 were a result of decreased observability of market data and transfers from Level 3 to Level 2 were a result of increased observability of market data. NEE's and FPL's policy is to recognize all transfers at the beginning of the reporting period.
|
|
|
(d)
|
For the
six months ended June 30, 2017 and 2016
, unrealized gains of approximately
$280 million
and
$151 million
, respectively, are reflected in the condensed consolidated statements of income in operating revenues and the balance is reflected in interest expense.
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
Carrying
Amount
|
|
Estimated
Fair Value
|
|
|
(millions)
|
|
NEE:
|
|
|
Special use funds
(a)
|
$
|
693
|
|
|
$
|
693
|
|
|
$
|
712
|
|
|
$
|
712
|
|
|
Other investments - primarily notes receivable
(b)
|
$
|
508
|
|
|
$
|
663
|
|
|
$
|
526
|
|
|
$
|
668
|
|
|
Long-term debt, including current maturities
|
$
|
32,149
|
|
|
$
|
34,289
|
|
(c)
|
$
|
30,418
|
|
(d)
|
$
|
31,623
|
|
(c)(d)
|
FPL:
|
|
|
|
|
|
|
|
|
Special use funds
(a)
|
$
|
539
|
|
|
$
|
539
|
|
|
$
|
557
|
|
|
$
|
557
|
|
|
Long-term debt, including current maturities
|
$
|
10,549
|
|
|
$
|
11,984
|
|
(c)
|
$
|
10,072
|
|
|
$
|
11,211
|
|
(c)
|
———————————————
|
|
(a)
|
Primarily represents investments accounted for under the equity method and loans not measured at fair value on a recurring basis.
|
|
|
(b)
|
Primarily a note receivable which bears interest at a fixed rate and matures in 2029. At June 30, 2017, the note receivable is classified as held for sale and being marketed with debt secured by this note receivable (see Note 6 - NEER). Fair values are estimated using an income approach utilizing a discounted cash flow valuation technique based on certain observable yield curves and indices considering the credit profile of the borrower (Level 3).
|
|
|
(c)
|
As of
June 30, 2017
and
December 31, 2016
, for NEE, approximately
$32,399 million
and
$29,804 million
, respectively, is estimated using a market approach based on quoted market prices for the same or similar issues (Level 2); the balance is estimated using an income approach utilizing a discounted cash flow valuation technique, considering the current credit profile of the debtor (Level 3). For FPL, primarily estimated using quoted market prices for the same or similar issues (Level 2).
|
|
|
(d)
|
Excludes debt totaling
$373 million
reflected in liabilities associated with assets held for sale on NEE's condensed consolidated balance sheet for which the carrying amount approximates fair value. See Note 9 - Assets and Liabilities Associated with Assets Held for Sale.
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Special Use Funds
- The special use funds noted above and those carried at fair value (see Recurring Fair Value Measurements above) consist of NEE's nuclear decommissioning fund assets of
$5,756 million
and
$5,434 million
at
June 30, 2017
and
December 31, 2016
, respectively (
$3,861 million
and
$3,665 million
, respectively, for FPL). The investments held in the special use funds consist of equity and debt securities which are primarily classified as available for sale and carried at estimated fair value. The amortized cost of debt and equity securities is approximately
$1,875 million
and
$1,591 million
, respectively, at
June 30, 2017
and
$1,820 million
and
$1,543 million
, respectively, at
December 31, 2016
(
$1,406 million
and
$782 million
, respectively, at
June 30, 2017
and
$1,373 million
and
$764 million
, respectively, at
December 31, 2016
for FPL). For FPL's special use funds, consistent with regulatory treatment, changes in fair value, including any other than temporary impairment losses, result in a corresponding adjustment to the related regulatory asset or liability accounts. For NEE's non-rate regulated operations, changes in fair value result in a corresponding adjustment to OCI, except for unrealized losses associated with marketable securities considered to be other than temporary, including any credit losses, which are recognized as other than temporary impairment losses on securities held in nuclear decommissioning funds and included in other - net in NEE's condensed consolidated statements of income. Debt securities included in the nuclear decommissioning funds have a weighted-average maturity at
June 30, 2017
of approximately
eight
years at both NEE and FPL. The cost of securities sold is determined using the specific identification method.
Realized gains and losses and proceeds from the sale or maturity of available for sale securities are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEE
|
|
FPL
|
|
NEE
|
|
FPL
|
|
Three Months Ended
June 30,
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(millions)
|
Realized gains
|
$
|
22
|
|
|
$
|
33
|
|
|
$
|
13
|
|
|
$
|
16
|
|
|
$
|
76
|
|
|
$
|
55
|
|
|
$
|
26
|
|
|
$
|
26
|
|
Realized losses
|
$
|
14
|
|
|
$
|
20
|
|
|
$
|
7
|
|
|
$
|
12
|
|
|
$
|
43
|
|
|
$
|
38
|
|
|
$
|
26
|
|
|
$
|
22
|
|
Proceeds from sale or maturity of securities
|
$
|
627
|
|
|
$
|
727
|
|
|
$
|
395
|
|
|
$
|
551
|
|
|
$
|
1,253
|
|
|
$
|
1,428
|
|
|
$
|
836
|
|
|
$
|
1,081
|
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The unrealized gains on available for sale securities are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEE
|
|
FPL
|
|
June 30, 2017
|
|
December 31, 2016
|
|
June 30, 2017
|
|
December 31, 2016
|
|
(millions)
|
Equity securities
|
$
|
1,584
|
|
|
$
|
1,396
|
|
|
$
|
1,126
|
|
|
$
|
1,007
|
|
Debt securities
|
$
|
36
|
|
|
$
|
22
|
|
|
$
|
27
|
|
|
$
|
17
|
|
The 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
|
|
June 30, 2017
|
|
December 31, 2016
|
|
June 30, 2017
|
|
December 31, 2016
|
|
(millions)
|
Unrealized losses
(a)
|
$
|
16
|
|
|
$
|
34
|
|
|
$
|
13
|
|
|
$
|
28
|
|
Fair value
|
$
|
756
|
|
|
$
|
959
|
|
|
$
|
575
|
|
|
$
|
722
|
|
———————————————
|
|
(a)
|
Unrealized losses on available for sale debt securities in an unrealized loss position for greater than twelve months at
June 30, 2017
and
December 31, 2016
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.
4. Income Taxes
NEE's effective income tax rates for the
three months ended June 30, 2017 and 2016
were approximately
26%
and
29%
, respectively. The rates for both periods reflect the benefit of PTCs of approximately $
30 million
and $
31 million
, respectively, related to NEER's wind projects, as well as ITCs and deferred income taxes associated with grants under the Recovery Act (convertible ITCs) totaling approximately $
42 million
and $
43 million
, respectively, related to solar and certain wind projects at NEER.
NEE's effective income tax rates for the
six months ended June 30, 2017 and 2016
were approximately
29%
and
28%
, respectively. The rates for both periods reflect the benefit of PTCs of approximately $
58 million
and $
73 million
, respectively, related to NEER's wind projects, as well as ITCs and deferred income taxes associated with convertible ITCs totaling approximately $
169 million
and $
79 million
, respectively, related to solar and certain wind projects at NEER.
NEE recognizes PTCs as wind 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 financial viability of most wind projects and a fundamental component of such wind projects' results of operations. PTCs, as well as ITCs and deferred income taxes associated with convertible ITCs, can significantly affect NEE's effective income tax rate depending on the amount of pretax income. The amount of PTCs recognized can be significantly affected by wind generation and by the roll off of PTCs after
ten years
of production (PTC roll off).
In April 2016, a court decision was issued approving a reorganization of certain Canadian assets that provided for tax bases in certain of these assets (Canadian tax restructuring). NEE recorded approximately $
30 million
of the associated income tax benefits during the
three and six months ended June 30, 2016
, which effectively reversed a portion of the income tax charge NEE recorded in the second quarter of 2014 associated with structuring Canadian assets. In addition, consolidating income tax adjustments for the
three and six months ended June 30, 2016
include an approximately $
58 million
income tax charge related to the sale of NEER's ownership interest in merchant natural gas generation facilities located in Texas with a total generating capacity of
2,884
MW (Texas natural gas generation facilities). See Note 9 - Assets and Liabilities Associated with Assets Held for Sale.
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
5. Oncor-Related Transactions
From July 2016 through October 2016, NEE and certain of its affiliates entered into several agreements with Energy Future Holdings Corp. (EFH) and Energy Future Intermediate Holding Company LLC (EFIH), Texas Transmission Holdings Corporation (TTHC), Oncor Management Investment LLC and certain of their affiliates, which would have resulted in NEE owning
100%
of Oncor Electric Delivery Company LLC (Oncor) if the transactions contemplated by those agreements would have been consummated. The agreements with EFH and EFIH and TTHC were subject to, among other things, approval by the Public Utility Commission of Texas (PUCT) and FERC (which FERC approval was received in January 2017), as well as receipt of a supplemental private letter ruling from the Internal Revenue Service. On April 13, 2017, the PUCT issued a final order denying NEE's purchase of Oncor because the PUCT found that the transactions by which NEE would acquire all equity interests in Oncor were not in the public interest. The PUCT denied NEE's most recent motion for rehearing on June 29, 2017. On July 6, 2017, EFH and EFIH provided a written notice (notice) to NEE terminating the agreement and plan of merger, dated as of July 29, 2016, as amended (merger agreement), under which EFH Merger Co., LLC (Merger Sub), a direct wholly owned subsidiary of NEE, would have acquired
100%
of the equity of reorganized EFH and certain of its subsidiaries, including its indirect ownership of approximately
80%
of the outstanding equity interests of Oncor. The notice provided a number of purported bases for the termination. On July 7, 2017, NEE and Merger Sub provided a written reply to the notice to EFH and EFIH indicating that NEE and Merger Sub do not agree that the bases for termination of the merger agreement represent valid or effective bases for termination of the merger agreement, other than termination as a result of the fact that specified approvals and rulings were not obtained by a deadline prescribed in the merger agreement. NEE and Merger Sub believe they are entitled to a
$275 million
termination fee as a result of the termination of the merger agreement if any alternative transactions are consummated and are pursuing their rights accordingly.
6. Variable Interest Entities (VIEs)
As of
June 30, 2017
, NEE had
thirty-two
VIEs which it consolidated and had interests in certain other VIEs which it did not consolidate.
FPL
- FPL is considered the primary beneficiary of, and therefore consolidates, a VIE that is a wholly owned bankruptcy remote special purpose subsidiary that it formed in 2007 for the sole purpose of issuing storm-recovery bonds pursuant to the securitization provisions of the Florida Statutes and a financing order of the FPSC. FPL is considered the primary beneficiary because FPL has the power to direct the significant activities of the VIE, and its equity investment, which is subordinate to the bondholder's interest in the VIE, is at risk. Storm restoration costs incurred by FPL during 2005 and 2004 exceeded the amount in FPL's funded storm and property insurance reserve, resulting in a storm reserve deficiency. In 2007, the VIE issued $
652 million
aggregate principal amount of senior secured bonds (storm-recovery bonds), primarily for the after-tax equivalent of the total of FPL's unrecovered balance of the 2004 storm restoration costs, the 2005 storm restoration costs and to reestablish FPL's storm and property insurance reserve. In connection with this financing, net proceeds, after debt issuance costs, to the VIE (approximately $
644 million
) were used to acquire the storm-recovery property, which includes the right to impose, collect and receive a storm-recovery charge from all customers receiving electric transmission or distribution service from FPL under rate schedules approved by the FPSC or under special contracts, certain other rights and interests that arise under the financing order issued by the FPSC and certain other collateral pledged by the VIE that issued the bonds. The storm-recovery bonds are payable only from and are secured by the storm-recovery property. The bondholders have no recourse to the general credit of FPL. The assets of the VIE were approximately $
177 million
and $
216 million
at
June 30, 2017
and
December 31, 2016
, respectively, and consisted primarily of storm-recovery property, which are included in both current and noncurrent regulatory assets on NEE's and FPL's condensed consolidated balance sheets. The liabilities of the VIE were approximately $
179 million
and $
214 million
at
June 30, 2017
and
December 31, 2016
, respectively, and consisted primarily of storm-recovery bonds, which are included in long-term debt on NEE's and FPL's condensed consolidated balance sheets.
NEER
- NEE consolidates
thirty-one
NEER VIEs. NEER is considered the primary beneficiary of these VIEs since NEER controls the most significant activities of these VIEs, including operations and maintenance, and has the obligation to absorb expected losses of these VIEs.
A
subsidiary of NEER is the primary beneficiary of, and therefore consolidates, NEP, which consolidates NEP OpCo because of NEP’s controlling interest in the general partner of NEP OpCo. NEP is a limited partnership formed to acquire, manage and own contracted clean energy projects with stable, long-term cash flows through a limited partner interest in NEP OpCo. NEE owns a controlling non-economic general partner interest in NEP and a limited partner interest in NEP OpCo, and presents NEP's limited partner interest as a noncontrolling interest in NEE's consolidated financial statements. At
June 30, 2017
, NEE owned common units of NEP OpCo representing a noncontrolling interest in NEP’s operating projects of approximately
65.1%
. The assets and liabilities of NEP were approximately $
7.5 billion
and $
5.4 billion
, respectively, at
June 30, 2017
, and $
7.2 billion
and $
5.0 billion
, respectively, at
December 31, 2016
, and primarily consisted of property, plant and equipment and long-term debt. During the second quarter of 2017, intentions to pursue changes to NEP's current governance structure were announced that, among other things, will enhance NEP unitholder governance rights. As a result of these announced governance changes, NEE expects to deconsolidate NEP beginning in January 2018.
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
A
NEER VIE consolidates two entities which own and operate natural gas/oil electric generation facilities with the capability of producing
110
MW. These entities sell their electric output under power sales contracts to a third party, with expiration dates in
2018
and
2020
. The power sales contracts provide the offtaker the ability to dispatch the facilities and require the offtaker to absorb the cost of fuel. The entities have third-party debt which is secured by liens against the generation facilities and the other assets of these entities. The debt holders have no recourse to the general credit of NEER for the repayment of debt. The assets and liabilities of the VIE were approximately $
77 million
and $
28 million
, respectively, at
June 30, 2017
and $
95 million
and $
42 million
, respectively, at
December 31, 2016
, and consisted primarily of property, plant and equipment and long-term debt.
Two
indirect subsidiaries of NEER each contributed, to a NEP subsidiary, an approximately
50
% ownership interest in three entities which own and operate solar PV facilities with the capability of producing a total of approximately
277
MW. Each of the two indirect subsidiaries of NEER is considered a VIE since the non-managing members have no substantive rights over the managing members, and is consolidated by NEER. These three entities sell their electric output to third parties under power sales contracts with expiration dates in
2035
and
2036
. The three 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 NEER for the repayment of debt. The assets and liabilities of these VIEs were approximately $
571 million
and $
493 million
, respectively, at
June 30, 2017
and $
571 million
and $
487 million
, respectively, at
December 31, 2016
, and consisted primarily of property, plant and equipment and long-term debt.
NEER consolidates a special purpose entity that has insufficient equity at risk and is considered a VIE. The entity provided a loan in the form of a note receivable (see Note 3 - Fair Value of Financial Instruments Recorded at Other than Fair Value) to an unrelated third party, and also issued senior secured bonds which are collateralized by the note receivable. The assets and liabilities of the VIE were approximately $
494 million
and $
505 million
, respectively, at
June 30, 2017
, and $
502 million
and $
511 million
, respectively at
December 31, 2016
, and consisted primarily of notes receivables (included in other investments and classified as held for sale as of June 30, 2017) and long-term debt.
The other
twenty-six
NEER VIEs that are consolidated relate to certain subsidiaries which have sold differential membership interests in entities which own and operate wind electric generation and solar
PV
facilities with the capability of producing a total of approximately
6,322
MW and
374
MW, respectively. These entities sell their electric output either under power sales contracts to third parties with expiration dates ranging from
2018
through
2046
or in the spot market. Certain investors that have no equity at risk in the VIEs hold differential membership interests, which give them the right to receive a portion of the economic attributes of the generation facilities, including certain tax attributes. Certain entities have third-party debt which is secured by liens against the generation facilities and the other assets of these entities or by pledges of NEER's 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 $
10.1 billion
and $
5.7 billion
, respectively, at
June 30, 2017
. There were
twenty-seven
consolidated VIE's at
December 31, 2016
; the assets and liabilities of those VIEs totaled approximately $
10.9 billion
and $
6.9 billion
, respectively. At
June 30, 2017
and
December 31, 2016
, the assets and liabilities of the VIEs consisted primarily of property, plant and equipment, deferral related to differential membership interests and long-term debt.
Other
- As of
June 30, 2017
and
December 31, 2016
, several NEE subsidiaries had investments totaling approximately
$2,572 million
(
$2,106 million
at FPL) and
$2,505 million
(
$2,049 million
at FPL), respectively, which are included in special use funds and other investments 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 mortgage-backed securities. NEE subsidiaries, including FPL, are not the primary beneficiary 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. These entities are limited partnerships or similar entity structures in which the limited partners or nonmanaging members do not have substantive rights, 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
$252 million
and
$234 million
at
June 30, 2017
and December 31, 2016, respectively, which are included in other investments on NEE’s condensed consolidated balance sheets. Subsidiaries of NEE had committed to invest an additional approximately
$25 million
and $
30 million
in
two
of the entities as of
June 30, 2017
and
December 31, 2016
, respectively.
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
7. Equity
Earnings Per Share
- The reconciliation of NEE's basic and diluted earnings per share attributable to NEE is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(millions, except per share amounts)
|
Numerator - net income attributable to NEE
|
$
|
793
|
|
|
$
|
540
|
|
|
$
|
2,376
|
|
|
$
|
1,193
|
|
Denominator:
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding - basic
|
467.9
|
|
|
461.3
|
|
|
467.7
|
|
|
460.9
|
|
Equity units, stock options, performance share awards, forward sale agreements and restricted stock
(a)
|
3.8
|
|
|
3.3
|
|
|
3.3
|
|
|
3.1
|
|
Weighted-average number of common shares outstanding - assuming dilution
|
471.7
|
|
|
464.6
|
|
|
471.0
|
|
|
464.0
|
|
Earnings per share attributable to NEE:
|
|
|
|
|
|
Basic
|
$
|
1.69
|
|
|
$
|
1.17
|
|
|
$
|
5.08
|
|
|
$
|
2.59
|
|
Assuming dilution
|
$
|
1.68
|
|
|
$
|
1.16
|
|
|
$
|
5.05
|
|
|
$
|
2.57
|
|
———————————————
|
|
(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 performance share awards, as well as restricted stock which were not included in the denominator above due to their antidilutive effect were approximately
0.4 million
and
0.3 million
for the
three months ended June 30, 2017 and 2016
, respectively, and
6.2 million
and
0.2 million
for the
six months ended June 30, 2017 and 2016
, respectively.
Forward Sale Agreements
- In November 2016, NEE entered into forward sale agreements with several forward counterparties for
12 million
shares of its common stock to be settled on a date or dates to be specified at NEE's direction, no later than November 1, 2017. During the second quarter of 2017, NEE notified the forward counterparties of its election to net share settle all of the shares of its common stock under their respective forward sale agreement. One forward counterparty’s forward sale agreement for
6 million
shares settled on June 28, 2017 with NEE issuing
744,599
shares of its common stock. The forward sale price used to determine the net share settlement amount was calculated based on the initial forward sale price of
$124.00
per share, less certain adjustments as specified in the forward sale agreements. The remaining forward counterparties’ forward sale agreements are expected to settle in the third quarter of 2017. At June 30, 2017, if NEE had net share settled the remaining forward sale agreements with the forward counterparties using the June 30, 2017 closing price per share for NEE common stock of
$140.13
, NEE would have issued approximately
820,000
shares of its common stock.
NEP Series A Preferred Unit Purchase Agreement -
In June 2017, NEP entered into a Series A Preferred Unit Purchase Agreement to issue and sell, on or before December 31, 2017,
$550 million
of Series A convertible preferred units representing limited partner interests in NEP (NEP preferred units). When issued, holders of the NEP preferred units will be entitled to receive certain cumulative quarterly distributions from NEP, which may be paid, at NEP’s election and subject to certain limitations, in cash, additional NEP preferred units or a combination thereof. Each holder of NEP preferred units (together with its affiliates) may elect to convert all or any portion of its NEP preferred units into common units of NEP initially on a one-for-one basis, subject to certain adjustments (the conversion rate), at any time after June 20, 2019, subject to certain conditions. NEP may elect to convert all or a portion of the NEP preferred units into NEP common units based on the conversion rate at any time after the first anniversary of the date of issuance of the NEP preferred units being converted if certain conditions are met and subject to certain maximum conversion amounts prior to the third anniversary of the final closing date.
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 Loss Related to Equity Method Investee
|
|
Total
|
|
(millions)
|
Three Months Ended June 30, 2017
|
|
Balances, March 31, 2017
|
$
|
(101
|
)
|
|
$
|
243
|
|
|
$
|
(86
|
)
|
|
$
|
(75
|
)
|
|
$
|
(21
|
)
|
|
$
|
(40
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
26
|
|
|
10
|
|
|
5
|
|
|
(1
|
)
|
|
40
|
|
Amounts reclassified from AOCI
|
5
|
|
(a)
|
(1
|
)
|
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Net other comprehensive income (loss)
|
5
|
|
|
25
|
|
|
10
|
|
|
5
|
|
|
(1
|
)
|
|
44
|
|
Less other comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Balances, June 30, 2017
|
$
|
(96
|
)
|
|
$
|
268
|
|
|
$
|
(76
|
)
|
|
$
|
(71
|
)
|
|
$
|
(22
|
)
|
|
$
|
3
|
|
———————————————
|
|
(a)
|
Reclassified to interest expense in NEE's condensed consolidated statements of income. See Note 2 - Income Statement Impact of Derivative Instruments.
|
|
|
(b)
|
Reclassified to gains 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 Loss Related to Equity Method Investee
|
|
Total
|
|
(millions)
|
Three Months Ended June 30, 2016
|
|
Balances, March 31, 2016
|
$
|
(146
|
)
|
|
$
|
181
|
|
|
$
|
(69
|
)
|
|
$
|
(52
|
)
|
|
$
|
(27
|
)
|
|
$
|
(113
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
17
|
|
|
—
|
|
|
8
|
|
|
(1
|
)
|
|
24
|
|
Amounts reclassified from AOCI
|
13
|
|
(a)
|
(5
|
)
|
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Net other comprehensive income (loss)
|
13
|
|
|
12
|
|
|
—
|
|
|
8
|
|
|
(1
|
)
|
|
32
|
|
Less other comprehensive income attributable to noncontrolling interests
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Balances, June 30, 2016
|
$
|
(134
|
)
|
|
$
|
193
|
|
|
$
|
(69
|
)
|
|
$
|
(44
|
)
|
|
$
|
(28
|
)
|
|
$
|
(82
|
)
|
———————————————
|
|
(a)
|
Reclassified to interest expense in NEE's condensed consolidated statements of income. See Note 2 - Income Statement Impact of Derivative Instruments.
|
|
|
(b)
|
Reclassified to gains 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 Loss Related to Equity Method Investee
|
|
Total
|
|
(millions)
|
Six Months Ended June 30, 2017
|
|
Balances, December 31, 2016
|
$
|
(100
|
)
|
|
$
|
225
|
|
|
$
|
(83
|
)
|
|
$
|
(90
|
)
|
|
$
|
(22
|
)
|
|
$
|
(70
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
60
|
|
|
7
|
|
|
21
|
|
|
—
|
|
|
88
|
|
Amounts reclassified from AOCI
|
14
|
|
(a)
|
(17
|
)
|
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
Net other comprehensive income
|
14
|
|
|
43
|
|
|
7
|
|
|
21
|
|
|
—
|
|
|
85
|
|
Less other comprehensive income attributable to noncontrolling interests
|
10
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
12
|
|
Balances, June 30, 2017
|
$
|
(96
|
)
|
|
$
|
268
|
|
|
$
|
(76
|
)
|
|
$
|
(71
|
)
|
|
$
|
(22
|
)
|
|
$
|
3
|
|
———————————————
|
|
(a)
|
Reclassified to interest expense in NEE's condensed consolidated statements of income. See Note 2 - Income Statement Impact of Derivative Instruments.
|
|
|
(b)
|
Reclassified to gains on disposal of investments and other property - net in NEE's condensed consolidated statements of income.
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Net Unrealized Gains (Losses) on Cash Flow Hedges
|
|
Net Unrealized Gains (Losses) on Available for Sale Securities
|
|
Defined Benefit Pension and Other Benefits Plans
|
|
Net Unrealized Gains (Losses) on Foreign Currency Translation
|
|
Other Comprehensive Loss Related to Equity Method Investee
|
|
Total
|
|
(millions)
|
Six Months Ended June 30, 2016
|
|
Balances, December 31, 2015
|
$
|
(170
|
)
|
|
$
|
174
|
|
|
$
|
(62
|
)
|
|
$
|
(85
|
)
|
|
$
|
(24
|
)
|
|
$
|
(167
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
25
|
|
|
(7
|
)
|
|
28
|
|
|
(4
|
)
|
|
42
|
|
Amounts reclassified from AOCI
|
36
|
|
(a)
|
(6
|
)
|
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
Net other comprehensive income (loss)
|
36
|
|
|
19
|
|
|
(7
|
)
|
|
28
|
|
|
(4
|
)
|
|
72
|
|
Less other comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
Balances, June 30, 2016
|
$
|
(134
|
)
|
|
$
|
193
|
|
|
$
|
(69
|
)
|
|
$
|
(44
|
)
|
|
$
|
(28
|
)
|
|
$
|
(82
|
)
|
———————————————
|
|
(a)
|
Reclassified to interest expense in NEE's condensed consolidated statements of income. See Note 2 - Income Statement Impact of Derivative Instruments.
|
|
|
(b)
|
Reclassified to gains on disposal of investments and other property - net in NEE's condensed consolidated statements of income.
|
8. Debt
Significant long-term debt issuances and borrowings by subsidiaries of NEE during the
six months ended June 30, 2017
were as follows:
|
|
|
|
|
|
|
|
|
|
|
Principal Amount
|
|
Interest Rate
|
|
Maturity Date
|
|
(millions)
|
|
|
|
|
FPL:
|
|
|
|
|
|
Other long-term debt
|
$
|
200
|
|
|
Variable
|
|
(a)
|
2018
|
NEECH:
|
|
|
|
|
|
Debentures
|
$
|
1,250
|
|
|
3.55
|
%
|
|
2027
|
Japanese yen denominated term loan
|
$
|
535
|
|
|
Variable
|
|
(a)
|
2020
|
NEER:
|
|
|
|
|
|
Senior secured revolving credit facility
|
$
|
110
|
|
|
Variable
|
|
(a)
|
2019
|
Senior secured limited-recourse term loans
|
$
|
308
|
|
|
Variable
|
|
(a)
|
2026
|
Other long-term debt
|
$
|
350
|
|
|
Variable
|
|
(a)
|
2018 - 2019
|
———————————————
|
|
(a)
|
Variable rate is based on an underlying index plus a margin. Interest rate swap agreements have been entered into with respect to certain of these issuances and a foreign currency swap has been entered into with respect to the Japanese yen denominated term loan. See Note 2.
|
9. Summary of Significant Accounting and Reporting Policies
Revenue Recognition -
In May 2014, the FASB issued an accounting standards update, which was subsequently amended, that provides guidance on the recognition of revenue from contracts with customers and requires additional disclosures regarding such contracts. NEE is currently evaluating individual contracts to determine the impact this standards update will have on its consolidated financial statements. FPL and NEER generate substantially all of NEE’s operating revenues. FPL’s operating revenues are derived primarily from tariff-based sales that result from providing electricity to retail customers with no defined contractual term. For these types of sales, FPL expects that the operating revenues will be equivalent to the electricity delivered and billed in that period under the standards update, which is consistent with current practice. NEER continues to evaluate its individual contracts and awaits the final resolution of certain industry-specific implementation issues in order to determine the impact, if any, this standards update will have on NEE’s consolidated financial statements. NEE and FPL intend to apply this standards update retrospectively with the cumulative effect, if any, recognized as an adjustment to retained earnings as of January 1, 2018.
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Accounting for Partial Sales of Nonfinancial Assets
- In February 2017, the FASB issued an accounting standards update regarding the accounting for partial sales of nonfinancial assets. NEE and FPL intend to apply this standards update retrospectively with the cumulative effect recognized as an adjustment to retained earnings and/or additional paid-in capital as of January 1, 2018, concurrent with the FASB's revenue recognition standards update. Based on NEE’s current analysis, this standards update is expected to affect the accounting and related financial statement presentation for the sales of differential membership interests to third-party investors and the sales of NEER assets to indirect subsidiaries of NEP. NEE anticipates the liability reflected as deferral related to differential membership interests - VIEs on NEE's consolidated balance sheets will be reclassified to noncontrolling interests and the amount currently being recognized in benefits associated with differential membership interests - net in NEE's consolidated statements of income will be reflected as a reduction to net income attributable to noncontrolling interests. Additionally, NEE continues to evaluate the sales of differential membership interests to third-party investors to determine if the amount or timing of income attributed to differential membership interests could change materially from amounts recorded under its current accounting method. For NEER asset sales to NEP, NEE anticipates the profit sharing liability currently reflected in noncurrent other liabilities on NEE’s consolidated balance sheets will be reclassified to additional paid-in capital and will no longer be amortized into income. While NEE continues to evaluate this standards update for other potential impacts the adoption may have on its consolidated financial statements, the adoption of this standards update is not expected to have an impact on FPL.
Electric Plant, Depreciation and Amortization
- NEER reviews the estimated useful lives of its fixed assets on an ongoing basis. NEER's most recent review indicated that the actual lives of certain equipment at its wind plants are expected to be longer than those previously estimated for depreciation purposes. As a result, effective January 1, 2017, NEER changed the estimated useful lives of certain wind plant equipment from
30
years to
35
years to better reflect the period during which these assets are expected to remain in service. This change increased net income attributable to NEE by approximately
$15 million
and
$30 million
and basic and diluted earnings per share attributable to NEE by approximately
$0.03
and
$0.06
for the
three and six months ended June 30, 2017
, respectively. For the year ended December 31, 2017 the change is expected to increase net income attributable to NEE by approximately
$60 million
.
Assets and Liabilities Associated with Assets Held for Sale -
In January 2017, an indirect wholly owned subsidiary of NEE completed the sale of its membership interests in its fiber-optic telecommunications business for net cash proceeds of approximately
$1.1 billion
, after repayment of
$370 million
of related long-term debt. In connection with the sale and the related consolidating state income tax effects, a gain of approximately
$1.1 billion
(approximately
$685 million
after tax) was recorded in NEE's condensed consolidated statements of income during the
six months ended June 30, 2017
and is included in gains on disposal of a business/assets - net. The carrying amounts of the major classes of assets and liabilities that were classified as held for sale on NEE's condensed consolidated balance sheets as of December 31, 2016 primarily represent property, plant and equipment and the related long-term debt.
In the second quarter of 2016, a subsidiary of NEER completed the sale of the Texas natural gas generation facilities for net cash proceeds of approximately
$456 million
, after transaction costs and working capital adjustments. In connection with the sale and the related consolidating state income tax effects, a gain of approximately
$254 million
(
$106 million
after tax) was recorded in NEE's condensed consolidated statements of income for the
three and six months ended June 30, 2016
and is included in gains on disposal of a business/assets - net.
10. 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 or acquisition of additional facilities and equipment to meet customer demand, as well as capital improvements to and maintenance of existing facilities and the procurement of nuclear fuel. At NEER, capital expenditures include, among other things, the cost, including capitalized interest, for construction and development of wind and solar projects and the procurement of nuclear fuel, as well as the investment in the development and construction of its natural gas pipeline assets. Capital expenditures for Corporate and Other primarily include the cost to maintain existing transmission facilities at NEET.
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
At
June 30, 2017
, estimated capital expenditures for the remainder of 2017 through 2021 for which applicable internal approvals (and also, if required, FPSC approvals for FPL or regulatory approvals for acquisitions) have been received were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remainder of 2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Total
|
|
(millions)
|
FPL:
|
|
|
|
|
|
|
|
|
|
|
|
Generation:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
New
(b)
|
$
|
670
|
|
|
$
|
675
|
|
|
$
|
540
|
|
|
$
|
1,105
|
|
|
$
|
885
|
|
|
$
|
3,875
|
|
Existing
|
555
|
|
|
795
|
|
|
670
|
|
|
620
|
|
|
475
|
|
|
3,115
|
|
Transmission and distribution
|
1,100
|
|
|
2,710
|
|
|
2,440
|
|
|
2,465
|
|
|
2,680
|
|
|
11,395
|
|
Nuclear fuel
|
30
|
|
|
190
|
|
|
170
|
|
|
210
|
|
|
120
|
|
|
720
|
|
General and other
|
300
|
|
|
280
|
|
|
250
|
|
|
220
|
|
|
250
|
|
|
1,300
|
|
Total
|
$
|
2,655
|
|
|
$
|
4,650
|
|
|
$
|
4,070
|
|
|
$
|
4,620
|
|
|
$
|
4,410
|
|
|
$
|
20,405
|
|
NEER:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wind
(c)
|
$
|
845
|
|
|
$
|
1,165
|
|
|
$
|
1,390
|
|
|
$
|
40
|
|
|
$
|
25
|
|
|
$
|
3,465
|
|
Solar
(d)
|
175
|
|
|
65
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
245
|
|
Nuclear, including nuclear fuel
|
135
|
|
|
250
|
|
|
225
|
|
|
215
|
|
|
245
|
|
|
1,070
|
|
Natural gas pipelines
(e)
|
235
|
|
|
855
|
|
|
40
|
|
|
30
|
|
|
10
|
|
|
1,170
|
|
Other
|
240
|
|
|
115
|
|
|
40
|
|
|
35
|
|
|
30
|
|
|
460
|
|
Total
|
$
|
1,630
|
|
|
$
|
2,450
|
|
|
$
|
1,700
|
|
|
$
|
320
|
|
|
$
|
310
|
|
|
$
|
6,410
|
|
Corporate and Other
|
$
|
40
|
|
|
$
|
60
|
|
|
$
|
85
|
|
|
$
|
50
|
|
|
$
|
40
|
|
|
$
|
275
|
|
———————————————
|
|
(a)
|
Includes AFUDC of approximately $
55 million
, $
88 million
, $
45 million
, $
41 million
and $
35 million
for the remainder of 2017 through 2021, respectively.
|
|
|
(b)
|
Includes land, generation structures, transmission interconnection and integration and licensing.
|
|
|
(c)
|
Consists of capital expenditures for new wind projects, repowering of existing wind projects and related transmission totaling approximately
3,400
MW.
|
|
|
(d)
|
Includes capital expenditures for new solar projects and related transmission totaling approximately
145
MW.
|
|
|
(e)
|
Includes equity contributions associated with an equity investment in a joint venture that is constructing a natural gas pipeline. The natural gas pipeline is pending FERC approval.
|
The above estimates are subject to continuing review and adjustment and actual capital expenditures may vary significantly from these estimates.
Contracts
- In addition to the commitments made in connection with the estimated capital expenditures included in the table in Commitments above, FPL has commitments under long-term purchased power and fuel contracts. As of
June 30, 2017
, FPL is obligated under a take-or-pay purchased power contract to pay for
375
MW annually through 2021. In May 2017, FPL entered into an agreement with JEA to shut down the St. Johns River Power Park coal units (SJRPP) (targeted for early January 2018), which will have the effect of terminating this take-or-pay purchased power contract, retiring SJRPP and eliminating FPL's
20%
ownership interest share, as of that date. The agreement provides for, among other things, an approximately
$90 million
payment by FPL to JEA, the
80%
owner of SJRPP. The agreement is subject to FPSC approval, which FPL has requested by no later than December 1, 2017. FPL also has various firm pay-for-performance contracts to purchase approximately
114
MW from certain cogenerators and small power producers with expiration dates ranging from 2026 through 2034. The purchased power contracts provide for capacity and energy payments. Energy payments are based on the actual power taken under these contracts. Capacity payments for the pay-for-performance contracts are subject to the facilities meeting certain contract conditions. FPL has contracts with expiration dates through 2042 for the purchase and transportation of natural gas and coal, and storage of natural gas. See Commitments above.
As of
June 30, 2017
, NEER has entered into contracts with expiration dates ranging from
late July 2017
through
2032
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 and has made commitments for the construction of the natural gas pipelines. Approximately
$2.7 billion
of related commitments are included in the estimated capital expenditures table in Commitments above. In addition, NEER has contracts primarily for the purchase, transportation and storage of natural gas with expiration dates ranging from
October 2017
through
2027
.
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, as of
June 30, 2017
were estimated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remainder of 2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
(millions)
|
FPL:
|
|
|
|
|
|
|
|
|
|
|
|
Capacity charges
(a)
|
$
|
40
|
|
|
$
|
65
|
|
|
$
|
50
|
|
|
$
|
20
|
|
|
$
|
20
|
|
|
$
|
250
|
|
Minimum charges, at projected prices:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas, including transportation and storage
(c)
|
$
|
765
|
|
|
$
|
970
|
|
|
$
|
860
|
|
|
$
|
910
|
|
|
$
|
905
|
|
|
$
|
12,135
|
|
Coal, including transportation
|
$
|
70
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NEER
|
$
|
1,020
|
|
|
$
|
1,195
|
|
|
$
|
150
|
|
|
$
|
105
|
|
|
$
|
75
|
|
|
$
|
315
|
|
Corporate and Other
(d)(e)
|
$
|
65
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
———————————————
|
|
(a)
|
Capacity charges, substantially all of which are recoverable through the capacity clause, totaled approximately $
20 million
and $
46 million
for the
three months ended June 30, 2017 and 2016
, respectively, and approximately $
40 million
and $
93 million
for the
six months ended June 30, 2017 and 2016
, respectively. Energy charges, which are recoverable through the fuel clause, totaled approximately $
27 million
and $
31 million
for the
three months ended June 30, 2017 and 2016
, respectively, and approximately $
43 million
and $
47 million
for the
six months ended June 30, 2017 and 2016
, respectively.
|
|
|
(b)
|
Recoverable through the fuel clause.
|
|
|
(c)
|
Includes approximately $
150 million
, $
295 million
, $
290 million
, $
360 million
, $
390 million
and
$7,565 million
for the remainder of 2017 through 2021 and thereafter, respectively, of firm commitments related to the natural gas transportation agreements with Sabal Trail and Florida Southeast Connection.
|
|
|
(d)
|
Includes an approximately
$25 million
commitment to invest in clean power and technology businesses through 2020.
|
|
|
(e)
|
Excludes approximately
$370 million
for the remainder 2017 of joint obligations of NEECH and NEER which are included in the NEER amounts above.
|
In January 2017, FPL assumed ownership of a
330
MW coal-fired generation facility located in Indiantown, Florida (Indiantown generation facility) for a purchase price of
$451 million
(including existing debt of approximately
$218 million
). FPL recorded a regulatory asset for approximately
$451 million
, which is being amortized over
nine years
and recovered through the capacity clause with a return on the portion of the unamortized balance of the regulatory asset. Prior to assuming ownership of this facility, FPL had a long-term purchased power agreement with this facility for substantially all of its capacity and energy. FPL expects to reduce the plant's operations with the intention of eventually phasing the plant out of service. FPL will recover the fuel costs of the facility through the fuel clause and operating costs through the capacity clause until FPL's next base rate filing where non-fuel cost recovery will be through base rates.
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, and participates in a secondary financial protection system, which provides up to $
13.0 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 $
1.0 billion
($
509 million
for FPL), plus any applicable taxes, per incident at any nuclear reactor in the U.S., payable at a rate not to exceed $
152 million
($
76 million
for FPL) per incident per year. NEE 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 $
15 million
, $
38 million
and $
19 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 sublimit of $
1.0 billion
. 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 $
178 million
($
108 million
for FPL), plus any applicable taxes, in retrospective premiums in a policy year. NEE 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
, $
5 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. Should FPL's future storm restoration costs exceed the reserve amount established through the issuance of storm-recovery bonds by a VIE in 2007, FPL may recover storm restoration costs, subject to prudence review by the FPSC, either through surcharges approved by the FPSC or through securitization provisions pursuant to Florida law. In February 2017, the FPSC approved FPL's request to recover through an interim surcharge the eligible storm restoration costs from 2016 that exceeded the reserve amount.
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
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.
11. Segment Information
NEE's reportable segments are FPL, a rate-regulated electric utility, and NEER, a competitive energy business. Corporate and Other represents other business activities and includes eliminating entries. NEE's segment information is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
2017
|
|
2016
|
|
FPL
|
|
NEER
(a)
|
|
Corporate
and Other
|
|
NEE
Consoli-
dated
|
|
FPL
|
|
NEER
(a)
|
|
Corporate
and Other
|
|
NEE
Consoli-
dated
|
|
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
Operating revenues
|
$
|
3,091
|
|
|
$
|
1,295
|
|
|
$
|
18
|
|
|
$
|
4,404
|
|
|
$
|
2,750
|
|
|
$
|
970
|
|
|
$
|
97
|
|
|
$
|
3,817
|
|
Operating expenses - net
|
$
|
2,150
|
|
|
$
|
957
|
|
|
$
|
12
|
|
|
$
|
3,119
|
|
|
$
|
1,922
|
|
|
$
|
654
|
|
|
$
|
72
|
|
|
$
|
2,648
|
|
Net income (loss) attributable to NEE
|
$
|
526
|
|
|
$
|
301
|
|
(b)
|
$
|
(34
|
)
|
|
$
|
793
|
|
|
$
|
448
|
|
|
$
|
234
|
|
(b)
|
$
|
(142
|
)
|
|
$
|
540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2017
|
|
2016
|
|
FPL
|
|
NEER
(a)
|
|
Corporate
and Other
|
|
NEE
Consoli-
dated
|
|
FPL
|
|
NEER
(a)
|
|
Corporate
and Other
|
|
NEE
Consoli-
dated
|
|
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
Operating revenues
|
$
|
5,618
|
|
|
$
|
2,719
|
|
|
$
|
40
|
|
|
$
|
8,377
|
|
|
$
|
5,054
|
|
|
$
|
2,411
|
|
|
$
|
186
|
|
|
$
|
7,651
|
|
Operating expenses (income) - net
|
$
|
3,866
|
|
|
$
|
1,888
|
|
|
$
|
(1,067
|
)
|
|
$
|
4,687
|
|
|
$
|
3,512
|
|
|
$
|
1,600
|
|
|
$
|
136
|
|
|
$
|
5,248
|
|
Net income (loss) attributable to NEE
|
$
|
971
|
|
|
$
|
777
|
|
(b)
|
$
|
628
|
|
|
$
|
2,376
|
|
|
$
|
841
|
|
|
$
|
458
|
|
(b)
|
$
|
(106
|
)
|
|
$
|
1,193
|
|
———————————————
|
|
(a)
|
Interest expense allocated from NEECH is based on a deemed capital structure of
70%
debt. For this purpose, the deferred credit associated with differential membership interests sold by NEER subsidiaries is included with debt. 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|
FPL
|
|
NEER
|
|
Corporate
and Other
|
|
NEE
Consoli-
dated
|
|
FPL
|
|
NEER
|
|
Corporate
and Other
|
|
NEE
Consoli-
dated
|
|
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
Total assets
|
$
|
47,800
|
|
|
$
|
43,944
|
|
|
$
|
1,146
|
|
|
$
|
92,890
|
|
|
$
|
45,501
|
|
|
$
|
41,743
|
|
|
$
|
2,749
|
|
|
$
|
89,993
|
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
12. Summarized Financial Information of NEECH
NEECH, a
100%
owned subsidiary of NEE, provides funding for, and holds ownership interests in, NEE's operating subsidiaries other than FPL. NEECH’s debentures and junior subordinated debentures including those that were registered pursuant to the Securities Act of 1933, as amended, are fully and unconditionally guaranteed by NEE. Condensed consolidating financial information is as follows:
Condensed Consolidating Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
2017
|
|
2016
|
|
NEE
(Guarantor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
NEE
(Guarantor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
Operating revenues
|
$
|
—
|
|
|
$
|
1,327
|
|
|
$
|
3,077
|
|
|
$
|
4,404
|
|
|
$
|
—
|
|
|
$
|
1,070
|
|
|
$
|
2,747
|
|
|
$
|
3,817
|
|
Operating expenses - net
|
(4
|
)
|
|
(974
|
)
|
|
(2,141
|
)
|
|
(3,119
|
)
|
|
(5
|
)
|
|
(720
|
)
|
|
(1,923
|
)
|
|
(2,648
|
)
|
Interest expense
|
(1
|
)
|
|
(309
|
)
|
|
(120
|
)
|
|
(430
|
)
|
|
—
|
|
|
(485
|
)
|
|
(117
|
)
|
|
(602
|
)
|
Equity in earnings of subsidiaries
|
787
|
|
|
—
|
|
|
(787
|
)
|
|
—
|
|
|
586
|
|
|
—
|
|
|
(586
|
)
|
|
—
|
|
Other income - net
|
—
|
|
|
219
|
|
|
19
|
|
|
238
|
|
|
—
|
|
|
180
|
|
|
16
|
|
|
196
|
|
Income before income taxes
|
782
|
|
|
263
|
|
|
48
|
|
|
1,093
|
|
|
581
|
|
|
45
|
|
|
137
|
|
|
763
|
|
Income tax expense (benefit)
|
(11
|
)
|
|
(12
|
)
|
|
312
|
|
|
289
|
|
|
41
|
|
|
(100
|
)
|
|
278
|
|
|
219
|
|
Net income (loss)
|
793
|
|
|
275
|
|
|
(264
|
)
|
|
804
|
|
|
540
|
|
|
145
|
|
|
(141
|
)
|
|
544
|
|
Less net income attributable to noncontrolling interests
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
Net income (loss) attributable to NEE
|
$
|
793
|
|
|
$
|
264
|
|
|
$
|
(264
|
)
|
|
$
|
793
|
|
|
$
|
540
|
|
|
$
|
141
|
|
|
$
|
(141
|
)
|
|
$
|
540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2017
|
|
2016
|
|
NEE
(Guarantor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
NEE
(Guarantor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
Operating revenues
|
$
|
—
|
|
|
$
|
2,789
|
|
|
$
|
5,588
|
|
|
$
|
8,377
|
|
|
$
|
—
|
|
|
$
|
2,605
|
|
|
$
|
5,046
|
|
|
$
|
7,651
|
|
Operating expenses - net
|
(10
|
)
|
|
(823
|
)
|
|
(3,854
|
)
|
|
(4,687
|
)
|
|
(10
|
)
|
|
(1,725
|
)
|
|
(3,513
|
)
|
|
(5,248
|
)
|
Interest expense
|
(1
|
)
|
|
(549
|
)
|
|
(240
|
)
|
|
(790
|
)
|
|
(1
|
)
|
|
(882
|
)
|
|
(228
|
)
|
|
(1,111
|
)
|
Equity in earnings of subsidiaries
|
2,349
|
|
|
—
|
|
|
(2,349
|
)
|
|
—
|
|
|
1,224
|
|
|
—
|
|
|
(1,224
|
)
|
|
—
|
|
Other income - net
|
1
|
|
|
446
|
|
|
12
|
|
|
459
|
|
|
1
|
|
|
327
|
|
|
39
|
|
|
367
|
|
Income (loss) before income taxes
|
2,339
|
|
|
1,863
|
|
|
(843
|
)
|
|
3,359
|
|
|
1,214
|
|
|
325
|
|
|
120
|
|
|
1,659
|
|
Income tax expense (benefit)
|
(37
|
)
|
|
438
|
|
|
563
|
|
|
964
|
|
|
21
|
|
|
(70
|
)
|
|
510
|
|
|
461
|
|
Net income (loss)
|
2,376
|
|
|
1,425
|
|
|
(1,406
|
)
|
|
2,395
|
|
|
1,193
|
|
|
395
|
|
|
(390
|
)
|
|
1,198
|
|
Less net income attributable to noncontrolling interests
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
Net income (loss) attributable to NEE
|
$
|
2,376
|
|
|
$
|
1,406
|
|
|
$
|
(1,406
|
)
|
|
$
|
2,376
|
|
|
$
|
1,193
|
|
|
$
|
390
|
|
|
$
|
(390
|
)
|
|
$
|
1,193
|
|
———————————————
|
|
(a)
|
Represents primarily FPL and consolidating adjustments.
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Condensed Consolidating Statements of Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
2017
|
|
2016
|
|
NEE
(Guarantor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
NEE
(Guarantor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to NEE
|
$
|
836
|
|
|
$
|
297
|
|
|
$
|
(297
|
)
|
|
$
|
836
|
|
|
$
|
571
|
|
|
$
|
172
|
|
|
$
|
(172
|
)
|
|
$
|
571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2017
|
|
2016
|
|
NEE
(Guarantor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
NEE
(Guarantor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to NEE
|
$
|
2,449
|
|
|
$
|
1,472
|
|
|
$
|
(1,472
|
)
|
|
$
|
2,449
|
|
|
$
|
1,278
|
|
|
$
|
482
|
|
|
$
|
(482
|
)
|
|
$
|
1,278
|
|
———————————————
|
|
(a)
|
Represents primarily FPL and consolidating adjustments.
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Condensed Consolidating Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|
NEE
(Guaran-
tor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
NEE
(Guaran-
tor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric plant in service and other property
|
$
|
28
|
|
|
$
|
40,257
|
|
|
$
|
50,419
|
|
|
$
|
90,704
|
|
|
$
|
28
|
|
|
$
|
38,671
|
|
|
$
|
48,314
|
|
|
$
|
87,013
|
|
Accumulated depreciation and amortization
|
(19
|
)
|
|
(8,342
|
)
|
|
(12,687
|
)
|
|
(21,048
|
)
|
|
(18
|
)
|
|
(7,778
|
)
|
|
(12,305
|
)
|
|
(20,101
|
)
|
Total property, plant and equipment - net
|
9
|
|
|
31,915
|
|
|
37,732
|
|
|
69,656
|
|
|
10
|
|
|
30,893
|
|
|
36,009
|
|
|
66,912
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
1
|
|
|
607
|
|
|
34
|
|
|
642
|
|
|
1
|
|
|
1,258
|
|
|
33
|
|
|
1,292
|
|
Receivables
|
281
|
|
|
1,476
|
|
|
723
|
|
|
2,480
|
|
|
88
|
|
|
1,615
|
|
|
736
|
|
|
2,439
|
|
Other
|
3
|
|
|
1,323
|
|
|
1,499
|
|
|
2,825
|
|
|
2
|
|
|
1,877
|
|
|
1,799
|
|
|
3,678
|
|
Total current assets
|
285
|
|
|
3,406
|
|
|
2,256
|
|
|
5,947
|
|
|
91
|
|
|
4,750
|
|
|
2,568
|
|
|
7,409
|
|
OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in subsidiaries
|
25,747
|
|
|
—
|
|
|
(25,747
|
)
|
|
—
|
|
|
24,323
|
|
|
—
|
|
|
(24,323
|
)
|
|
—
|
|
Other
|
834
|
|
|
9,869
|
|
|
6,584
|
|
|
17,287
|
|
|
867
|
|
|
8,992
|
|
|
5,813
|
|
|
15,672
|
|
Total other assets
|
26,581
|
|
|
9,869
|
|
|
(19,163
|
)
|
|
17,287
|
|
|
25,190
|
|
|
8,992
|
|
|
(18,510
|
)
|
|
15,672
|
|
TOTAL ASSETS
|
$
|
26,875
|
|
|
$
|
45,190
|
|
|
$
|
20,825
|
|
|
$
|
92,890
|
|
|
$
|
25,291
|
|
|
$
|
44,635
|
|
|
$
|
20,067
|
|
|
$
|
89,993
|
|
CAPITALIZATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shareholders' equity
|
$
|
25,926
|
|
|
$
|
8,505
|
|
|
$
|
(8,505
|
)
|
|
$
|
25,926
|
|
|
$
|
24,341
|
|
|
$
|
7,699
|
|
|
$
|
(7,699
|
)
|
|
$
|
24,341
|
|
Noncontrolling interests
|
—
|
|
|
950
|
|
|
—
|
|
|
950
|
|
|
—
|
|
|
990
|
|
|
—
|
|
|
990
|
|
Long-term debt
|
—
|
|
|
20,304
|
|
|
10,088
|
|
|
30,392
|
|
|
—
|
|
|
18,112
|
|
|
9,706
|
|
|
27,818
|
|
Total capitalization
|
25,926
|
|
|
29,759
|
|
|
1,583
|
|
|
57,268
|
|
|
24,341
|
|
|
26,801
|
|
|
2,007
|
|
|
53,149
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt due within one year
|
—
|
|
|
2,420
|
|
|
1,712
|
|
|
4,132
|
|
|
—
|
|
|
2,237
|
|
|
785
|
|
|
3,022
|
|
Accounts payable
|
1
|
|
|
1,100
|
|
|
713
|
|
|
1,814
|
|
|
1
|
|
|
2,668
|
|
|
778
|
|
|
3,447
|
|
Other
|
306
|
|
|
1,214
|
|
|
1,484
|
|
|
3,004
|
|
|
231
|
|
|
2,624
|
|
|
1,595
|
|
|
4,450
|
|
Total current liabilities
|
307
|
|
|
4,734
|
|
|
3,909
|
|
|
8,950
|
|
|
232
|
|
|
7,529
|
|
|
3,158
|
|
|
10,919
|
|
OTHER LIABILITIES AND DEFERRED CREDITS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset retirement obligations
|
—
|
|
|
868
|
|
|
1,977
|
|
|
2,845
|
|
|
—
|
|
|
816
|
|
|
1,920
|
|
|
2,736
|
|
Deferred income taxes
|
16
|
|
|
3,538
|
|
|
8,548
|
|
|
12,102
|
|
|
82
|
|
|
3,002
|
|
|
8,017
|
|
|
11,101
|
|
Other
|
626
|
|
|
6,291
|
|
|
4,808
|
|
|
11,725
|
|
|
636
|
|
|
6,487
|
|
|
4,965
|
|
|
12,088
|
|
Total other liabilities and deferred credits
|
642
|
|
|
10,697
|
|
|
15,333
|
|
|
26,672
|
|
|
718
|
|
|
10,305
|
|
|
14,902
|
|
|
25,925
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CAPITALIZATION AND LIABILITIES
|
$
|
26,875
|
|
|
$
|
45,190
|
|
|
$
|
20,825
|
|
|
$
|
92,890
|
|
|
$
|
25,291
|
|
|
$
|
44,635
|
|
|
$
|
20,067
|
|
|
$
|
89,993
|
|
———————————————
|
|
(a)
|
Represents primarily FPL and consolidating adjustments.
|
NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Concluded)
(unaudited)
Condensed Consolidating Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
2017
|
|
2016
|
|
NEE
(Guaran-
tor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
NEE
(Guaran-
tor)
|
|
NEECH
|
|
Other
(a)
|
|
NEE
Consoli-
dated
|
|
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
$
|
992
|
|
|
$
|
1,200
|
|
|
$
|
973
|
|
|
$
|
3,165
|
|
|
$
|
809
|
|
|
$
|
1,084
|
|
|
$
|
1,377
|
|
|
$
|
3,270
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures, independent power and other investments and nuclear fuel purchases
|
—
|
|
|
(4,195
|
)
|
|
(2,742
|
)
|
|
(6,937
|
)
|
|
—
|
|
|
(3,866
|
)
|
|
(2,200
|
)
|
|
(6,066
|
)
|
Proceeds from sale of the fiber-optic telecommunications business
|
—
|
|
|
1,482
|
|
|
—
|
|
|
1,482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Capital contributions from NEE
|
(45
|
)
|
|
—
|
|
|
45
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
13
|
|
|
—
|
|
Sale of independent power and other investments of NEER
|
—
|
|
|
42
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
396
|
|
|
—
|
|
|
396
|
|
Proceeds from sale or maturity of securities in special use funds and other investments
|
—
|
|
|
518
|
|
|
901
|
|
|
1,419
|
|
|
—
|
|
|
530
|
|
|
1,079
|
|
|
1,609
|
|
Purchases of securities in special use funds and other investments
|
—
|
|
|
(582
|
)
|
|
(949
|
)
|
|
(1,531
|
)
|
|
—
|
|
|
(534
|
)
|
|
(1,120
|
)
|
|
(1,654
|
)
|
Proceeds from sales of noncontrolling interests in NEP
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
303
|
|
|
—
|
|
|
303
|
|
Other - net
|
4
|
|
|
(14
|
)
|
|
26
|
|
|
16
|
|
|
—
|
|
|
(50
|
)
|
|
25
|
|
|
(25
|
)
|
Net cash used in investing activities
|
(41
|
)
|
|
(2,749
|
)
|
|
(2,719
|
)
|
|
(5,509
|
)
|
|
(13
|
)
|
|
(3,221
|
)
|
|
(2,203
|
)
|
|
(5,437
|
)
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuances of long-term debt
|
—
|
|
|
2,572
|
|
|
199
|
|
|
2,771
|
|
|
—
|
|
|
2,509
|
|
|
—
|
|
|
2,509
|
|
Retirements of long-term debt
|
—
|
|
|
(1,850
|
)
|
|
(35
|
)
|
|
(1,885
|
)
|
|
—
|
|
|
(963
|
)
|
|
(33
|
)
|
|
(996
|
)
|
Net change in commercial paper
|
—
|
|
|
1,115
|
|
|
732
|
|
|
1,847
|
|
|
—
|
|
|
701
|
|
|
307
|
|
|
1,008
|
|
Proceeds from other short-term debt
|
—
|
|
|
—
|
|
|
200
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
500
|
|
Issuances of common stock - net
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
43
|
|
Dividends on common stock
|
(920
|
)
|
|
—
|
|
|
—
|
|
|
(920
|
)
|
|
(803
|
)
|
|
—
|
|
|
—
|
|
|
(803
|
)
|
Contributions from (dividends to) NEE
|
—
|
|
|
(637
|
)
|
|
637
|
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
33
|
|
|
—
|
|
Other - net
|
(56
|
)
|
|
(302
|
)
|
|
14
|
|
|
(344
|
)
|
|
(36
|
)
|
|
91
|
|
|
10
|
|
|
65
|
|
Net cash provided by (used in) financing activities
|
(951
|
)
|
|
898
|
|
|
1,747
|
|
|
1,694
|
|
|
(796
|
)
|
|
2,305
|
|
|
817
|
|
|
2,326
|
|
Net increase (decrease) in cash and cash equivalents
|
—
|
|
|
(651
|
)
|
|
1
|
|
|
(650
|
)
|
|
—
|
|
|
168
|
|
|
(9
|
)
|
|
159
|
|
Cash and cash equivalents at beginning of period
|
1
|
|
|
1,258
|
|
|
33
|
|
|
1,292
|
|
|
—
|
|
|
546
|
|
|
25
|
|
|
571
|
|
Cash and cash equivalents at end of period
|
$
|
1
|
|
|
$
|
607
|
|
|
$
|
34
|
|
|
$
|
642
|
|
|
$
|
—
|
|
|
$
|
714
|
|
|
$
|
16
|
|
|
$
|
730
|
|
———————————————
|
|
(a)
|
Represents primarily FPL and consolidating adjustments.
|