NEXTERA ENERGY INC - Annual Report: 2019 (Form 10-K)

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•	FPL has firm transportation contracts with seven different transportation suppliers for natural gas pipeline capacity for an aggregate maximum quantity of 2,769,000 MMBtu/day currently, of which 1,969,000 MMBtu/day have expiration dates ranging from 2020 to 2036. The remaining 800,000 MMBtu/day increases to 1,200,000 MMBtu/day starting in mid-2020 through 2042. See Note 15 - Contracts.

•	FPL has several contracts for the supply of uranium and the conversion, enrichment and fabrication of nuclear fuel with expiration dates ranging from March 2020 through 2032.

•	Additionally, FPL enters into short- and medium-term natural gas supply contracts to provide a portion of FPL's anticipated needs for natural gas. The remainder of FPL's natural gas requirements is purchased in the spot market.

(a)	Excludes 147 MW operated by FPL but owned by non-affiliates.

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•	the FPSC, which has jurisdiction over retail rates, service territory, issuances of securities, planning, siting and construction of facilities, among other things;

•	the FERC, which oversees the acquisition and disposition of generation, transmission and other facilities, transmission of electricity and natural gas in interstate commerce, proposals to build and operate interstate natural gas pipelines and storage facilities, and wholesale purchases and sales of electric energy, among other things;

•	the NERC, which, through its regional entities, establishes and enforces mandatory reliability standards, subject to approval by the FERC, to ensure the reliability of the U.S. electric transmission and generation system and to prevent major system blackouts;

•	the NRC, which has jurisdiction over the operation of nuclear power plants through the issuance of operating licenses, rules, regulations and orders; and

•	the EPA, which has the responsibility to maintain and enforce national standards under a variety of environmental laws, in some cases delegating authority to state agencies. The EPA also works with industries and all levels of government, including federal and state governments, in a wide variety of voluntary pollution prevention programs and energy conservation efforts.

•	New retail base rates and charges were established resulting in the following increases in annualized retail base revenues:

◦	$400 million beginning January 1, 2017;

◦	$211 million beginning January 1, 2018; and

◦	$200 million beginning April 1, 2019 for a new approximately 1,720 MW natural gas-fired combined-cycle unit in Okeechobee County, Florida (Okeechobee Clean Energy Center) that achieved commercial operation on March 31, 2019.

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In addition, FPL is eligible to receive base rate increases associated with the addition of up to 300 MW annually of new solar generation in each of 2017 through 2020 with an installed cost cap of $1,750 per kW. Approximately 900 MW of new solar generating capacity has become operational, 600 MW in the first quarter of 2018 and 300 MW in the first quarter of 2019. An additional 300 MW is expected to be operational in the second quarter of 2020.

•	FPL's allowed regulatory ROE is 10.55%, with a range of 9.60% to 11.60%. If FPL's earned regulatory ROE falls below 9.60%, FPL may seek retail base rate relief. If the earned regulatory ROE rises above 11.60%, any party other than FPL may seek a review of FPL's retail base rates.

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Subject to certain conditions, FPL may amortize, over the term of the 2016 rate agreement, up to $1.0 billion of depreciation reserve surplus plus the reserve amount that remained under FPL's previous rate agreement (approximately $250 million), provided that in any year of the 2016 rate agreement FPL must amortize at least enough reserve to maintain a 9.60% earned regulatory ROE but may not amortize any reserve that would result in an earned regulatory ROE in excess of 11.60%.

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Future storm restoration costs would be recoverable on an interim basis beginning 60 days from the filing of a cost recovery petition, but capped at an amount that could produce a surcharge of no more than $4 for every 1,000 kWh of usage on residential bills during the first 12 months of cost recovery. Any additional costs would be eligible for recovery in subsequent years. If storm restoration costs exceed $800 million in any given calendar year, FPL may request an increase to the $4 surcharge to recover amounts above $400 million. See Note 1 - Storm Fund, Storm Reserve and Storm Cost Recovery regarding several hurricanes that impacted FPL's service territory from 2016 - 2019.

•	Fuel - primarily fuel costs, the most significant of the cost recovery clauses in terms of operating revenues (see Note 1 - Rate Regulation);

•	Capacity - primarily certain costs associated with the acquisition of several electric generation facilities (see Note 1 - Rate Regulation);

•	Energy Conservation - costs associated with implementing energy conservation programs; and

•	Environmental - certain costs of complying with federal, state and local environmental regulations enacted after April 1993 and costs associated with three of FPL's solar facilities placed in service prior to 2016.

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•	represented approximately 19,796 MW of total net generating capacity;

•	weighted-average remaining contract term of the power sales agreements and the remaining life of the PTCs associated with repowered wind facilities of approximately 16 years, based on forecasted contributions to earnings and forecasted amounts of electricity produced by the repowered wind facilities; and

•	contracts for the supply of uranium and the conversion, enrichment and fabrication of nuclear fuel have expiration dates ranging from March 2020 through 2033 (see Note 15 - Contracts).

(a)	A NEP portfolio of seven natural gas pipelines, of which a third party owns a 10% interest in a 120-mile pipeline with a daily capacity of approximately 2.3 Bcf. Approximately 1.82 Bcf per day of net capacity is contracted with firm ship-or-pay contracts that have expiration dates ranging from 2020 to 2035.

(b)	Ownership percentage based on NextEra Energy Resources limited partnership interest in NEP OpCo common units.

(c)	See Note 15 - Contracts for a discussion of transportation contracts with FPL.

(d)	NEP has an indirect equity method investment in the Central Penn Line (CPL) which represents an approximately 39% aggregate ownership interest in the CPL.

(e)	Completion of construction of the natural gas pipeline is subject to final permitting. Also, see Note 15 - Contracts for a discussion of a transportation contract with a NextEra Energy Resources subsidiary.

(a)	Direct current

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•	manages risk associated with fluctuating commodity prices and optimizes the value of NEER's power generation and gas infrastructure production assets through the use of swaps, options, futures and forwards;

•	sells output from NEER's plants that is not sold under long-term contracts and procures fossil fuel for use by NEER's generation fleet;

•	provides full energy and capacity requirements to customers; and

•	markets and trades energy-related commodity products and provides a wide range of electricity and fuel commodity products as well as marketing and trading services to customers.

•	located in 19 states in the U.S. and 4 provinces in Canada;

•	operated a total generating capacity of 15,955 MW at December 31, 2019;

•	ownership interests in a total net generating capacity of 14,111 MW at December 31, 2019;

◦	all MW are from contracted wind assets located primarily throughout Texas and the West and Midwest regions of the U.S. and Canada;

◦	added approximately 1,125 MW of new generating capacity and repowered wind generating capacity totaling 1,091 MW in the U.S. in 2019 (see Note 1 - Disposal of Businesses/Assets for asset sales to NEP).

•	located in 26 states in the U.S.;

•	operated PV and solar thermal facilities with a total generating capacity of 2,684 MW at December 31, 2019;

•	ownership interests in PV and solar thermal facilities with a total net generating capacity of 2,662 MW at December 31, 2019;

◦	essentially all MW are from contracted solar facilities located primarily throughout the West and South regions of the U.S.;

◦	added approximately 512 MW of generating capacity in the U.S. in 2019 (see Note 1 - Disposal of Businesses/Assets for asset sales to NEP).

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•	operated natural gas generation facilities with a total generating capacity of 2,110 MW at December 31, 2019;

•	ownership interests in natural gas generation facilities with a total net generating capacity of 1,565 MW at December 31, 2019;

◦	approximately 1,407 MW are contracted and 158 MW are merchant;

◦	located in 2 states in the Northeast region of the U.S. and in Florida; and

•	operated oil-fired peak generation facilities with a total generating capacity of 878 MW with an ownership or undivided interests in total net generating capacity of 805 MW at December 31, 2019 primarily located in Maine.

(a)	Excludes 147 MW operated by NEER but owned by non-affiliates.

(b)	Excludes 184 MW operated by NEER but owned by non-affiliates.

(c)	NEER sells all of its share of the output of Duane Arnold under an amended long-term contract expiring in December 2020. Operations of Duane Arnold are expected to cease in late 2020. See Note 5 - Nonrecurring Fair Value Measurements.

(d)	NEER sells all of the output of Point Beach Units Nos. 1 and 2 under long-term contracts through their current operating license expiration dates.

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(a)	Project must be placed in service no more than four years after the year in which construction of the project began to qualify for the PTC or ITC.

(b)	Percentage of the full PTC available for wind projects that begin construction during the applicable year.

(c)	Percentage of eligible project costs that can be claimed as ITC by wind projects that begin construction during the applicable year.

(d)	Percentage of eligible project costs that can be claimed as ITC by solar projects that begin construction during the applicable year. ITC is limited to 10% for solar projects not placed in service before January 1, 2024.

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(a)

Information is as of February 14, 2020. Executive officers are elected annually by, and serve at the pleasure of, their respective boards of directors. Except as noted below, each officer has held his/her present position for five years or more and his/her employment history is continuous. Mr. Ketchum served as Executive Vice President, Finance and Chief Financial Officer of NEE and FPL from March 2016 to February 2019 and NEE’s Senior Vice President, Finance from February 2015 to March 2016. Ms. Kujawa served as Vice President, Business Management of NextEra Energy Resources from March 2012 to February 2019. Mr. May served as Controller of NextEra Energy Resources from April 2015 to February 2019 and was Director of Accounting of NextEra Energy Resources from July 2013 to April 2015. Mr. Moul served as Vice President and Chief Nuclear Officer of NEE from May 2019 to December 2019. He previously held various roles at several subsidiaries of FirstEnergy Corp., which are energy suppliers involved in the generation, transmission and distribution of electricity. Mr. Moul was Executive on Special Assignment of FirstEnergy Solutions Corp. from March 2019 to May 2019, President and Chief Nuclear Officer of FirstEnergy Generation Companies from March 2018 to March 2019, President of FirstEnergy Generation LLC from April 2017 to March 2018, Senior Vice President, Fossil Operations and Environmental of FirstEnergy Solutions from August 2015 to April 2017, and Vice President, Commodity Operations of FirstEnergy Solutions from October 2012 to August 2015. Mr. Reagan served as Vice President, Engineering and Construction of NEE from November 2018 to December 2019 and Vice President, Integrated Supply Chain of NEE from October 2012 to November 2018.

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•	create substantial additional costs in the form of taxes or emission allowances;

•	make some of NEE's and FPL's electric generation units uneconomical to operate in the long term;

•	require significant capital investment in carbon capture and storage technology, fuel switching, or the replacement of high-emitting generation facilities with lower-emitting generation facilities; or

•	affect the availability or cost of fossil fuels.

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•	risks associated with facility start-up operations, such as whether the facility will achieve projected operating performance on schedule and otherwise as planned;

•	failures in the availability, acquisition or transportation of fuel or other necessary supplies;

•	the impact of unusual or adverse weather conditions and natural disasters, including, but not limited to, hurricanes, tornadoes, icing events, floods, earthquakes and droughts;

•	performance below expected or contracted levels of output or efficiency;

•	breakdown or failure, including, but not limited to, explosions, fires, leaks or other major events, of equipment, transmission or distribution systems or pipelines;

•	availability of replacement equipment;

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•	risks of property damage, human injury or loss of life from energized equipment, hazardous substances or explosions, fires, leaks or other events, especially where facilities are located near populated areas;

•	potential environmental impacts of gas infrastructure operations;

•	availability of adequate water resources and ability to satisfy water intake and discharge requirements;

•	inability to identify, manage properly or mitigate equipment defects in NEE's and FPL's facilities;

•	use of new or unproven technology;

•	risks associated with dependence on a specific type of fuel or fuel source, such as commodity price risk, availability of adequate fuel supply and transportation, and lack of available alternative fuel sources;

•	increased competition due to, among other factors, new facilities, excess supply, shifting demand and regulatory changes; and

•	insufficient insurance, warranties or performance guarantees to cover any or all lost revenues or increased expenses from the foregoing.

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(a)

Includes: (1) in November 2019, shares of common stock withheld from employees to pay certain withholding taxes upon the vesting of stock awards granted to such employees under the NextEra Energy, Inc. Amended and Restated 2011 Long Term Incentive Plan; and (2) in December 2019, shares of common stock purchased as a reinvestment of dividends by the trustee of a grantor trust in connection with NEE's obligation under a February 2006 grant under the NextEra Energy, Inc. Amended and Restated Long-Term Incentive Plan (former LTIP) to an executive officer of deferred retirement share awards.

(b)	In May 2017, NEE's Board of Directors authorized repurchases of up to 45 million shares of common stock over an unspecified period.

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(a)	See Note 8 for a discussion of 2019 acquisitions and Note 1 - NextEra Energy Partners, LP for a discussion of the deconsolidation of NEP in January 2018.

(b)

2018 includes an after-tax gain of approximately $3.0 billion related to the deconsolidation of NEP (see Note 1 - NextEra Energy Partners, LP). 2017 includes approximately $1.8 billion ($1.9 billion attributable to NEE) of net favorable tax reform impacts (see Note 6). 2017 and 2016 include after-tax gains on the sale of the fiber-optic telecommunications business of $685 million (see Note 1 - Disposal of Businesses/Assets) and natural gas generation facilities of $219 million. Also, on an after-tax basis, 2017 includes an impairment charge of $258 million related to Duane Arnold (see Note 5 - Nonrecurring Fair Value Measurements).

(c)	2018 reflects approximately $497 million relating to a reduction of differential membership interests as a result of a change in the federal corporate income tax rate effective January 1, 2018 (see Note 1 - Sales of Differential Membership Interests).

(d)	Includes assets held for sale of approximately $440 million in 2019 related to two solar generation facilities and $452 million in 2016 related to a fiber-optic telecommunications business (see Note 1 - Disposal of Businesses/Assets) and $1,009 million in 2015 related to merchant natural gas generation facilities.

(e)	Prior year amounts have been adjusted as discussed in Note 16.

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(a)	Gulf Power was acquired in January 2019. See Note 8 - Gulf Power Company.

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

(c)	NEP was deconsolidated from NEER in January 2018. See Note 1 - NextEra Energy Partners, LP.

(d)	NEER's and Corporate and Other's results for 2018 and 2017 were retrospectively adjusted to reflect a segment change. See Note 16.

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(a)

For 2019, 2018 and 2017, approximately $63 million of losses, $41 million of gains, and $46 million of gains, respectively, are included in NEER's net income; the balance is included in Corporate and Other. The change in non-qualifying hedge activity is primarily attributable to changes in forward power and natural gas prices, interest rates and foreign currency exchange rates, as well as the reversal of previously recognized unrealized mark-to-market gains or losses as the underlying transactions were realized. In 2017, net losses associated with non-qualifying hedge activity were partly offset by approximately $95 million of tax reform impacts.

(b)

For 2019, approximately $89 million related to the impact of tax rate change on differential membership interests relates to NEER. For 2018, approximately $421 million of favorable tax reform-related impacts, including the impact of tax rate change on differential membership interests, relates to NEER and the balance relates to Corporate and Other. For 2017, approximately $1,929 million of net favorable tax reform impacts and $50 million of net unfavorable tax reform impacts relate to NEER and FPL, respectively; the balance relates to Corporate and Other. See Note 1 - Storm Fund, Storm Reserve and Storm Cost Recovery and - Sales of Differential Membership Interests and Note 6.

(c)	For 2019 and 2018, approximately $96 million and $2,885 million, respectively, relates to NEER; the 2018 balance relates to Corporate and Other. See Note 1 - NextEra Energy Partners, LP and - Disposal of Businesses/Assets.

(d)	For 2019, 2018 and 2017, approximately $176 million of gains, $127 million of losses, and $2 million of gains, respectively, are included in NEER's net income; the balance for 2018 is included in Corporate and Other.

(e)	For 2019, approximately $44 million, $20 million and $6 million of costs are included in Corporate and Other's, Gulf Power's and NEER's net income, respectively. For 2018, $9 million of costs are included in Corporate and Other's net income; the balance is included in NEER. For 2017, the costs relate to Corporate and Other. See Note 1 - Acquisition-Related.

(f)	See Note 1 - Disposal of Businesses/Assets for a discussion of the sale of the fiber-optic telecommunications business.

(g)	Approximately $246 million of the impairment charge is included in NEER's net income; the balance is included in Corporate and Other. See Note 5 - Nonrecurring Fair Value Measurements.

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(a)

Reflects after-tax project contributions, including the net effect of deferred income taxes and other benefits associated with PTCs and ITCs for wind and solar projects, as applicable (see Note 1 - Income Taxes and - Sales of Differential Membership Interests and Note 6), but excludes allocation of interest expense or corporate general and administrative expenses. Results from projects and pipelines are included in new investments during the first twelve months of operation or ownership. Project results are included in existing assets and pipeline results are included in gas infrastructure beginning with the thirteenth month of operation or ownership.

(b)	Excludes allocation of interest expense and corporate general and administrative expenses.

(c)	Includes differential membership interest costs. Excludes unrealized mark-to-market gains and losses related to interest rate derivative contracts, which are included in change in non-qualifying hedge activity.

(d)	See Overview - Adjusted Earnings for additional information.

•	favorable unrealized mark-to-market activity of $295 million from non-qualifying hedges,

•	revenues from new investments of $232 million,

•	higher revenues of $198 million from the customer supply and proprietary power and gas trading business, and

•	higher revenues of $122 million from the gas infrastructure business,

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•	lower revenues from existing assets of $226 million primarily related to the absence of revenues of certain wind and solar facilities sold to NEP in December 2018 and June 2019 and lower wind resource as compared to 2018.

•	higher fuel and depreciation expense of $150 million primarily related to the customer supply and proprietary power and gas trading and gas infrastructure businesses,

•	higher operating expenses associated with new investments of approximately $137 million, and

•	an impairment charge of approximately $72 million in 2019 related to the decision to no longer move forward with the construction of a wind facility (see Note 1 - Construction Activity),

•	higher net gains on the disposal of businesses/assets of $320 million, primarily related to the gain recognized on the sale of ownership interests in wind and solar projects to NEP (see Note 1 - Disposal of Businesses/Assets).

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(a)	2019 and 2018 amounts relate to the acquisition of Gulf Power. See Note 8 - Gulf Power Company.

(a)	Amounts for 2018 and 2017 were retrospectively adjusted to reflect a segment change. See Note 16.

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(a)

Provide for the funding of loans up to the amount of the credit facility and the issuance of letters of credit up to $2,525 million ($575 million for FPL, $75 million for Gulf Power and $1,875 million for NEECH). The entire amount of the credit facilities is available for general corporate purposes and to provide additional liquidity in the event of a loss to the companies’ or their subsidiaries’ operating facilities (including, in the case of FPL, a transmission and distribution property loss). FPL’s syndicated revolving credit facilities are also available to support the purchase of $948 million of pollution control, solid waste disposal and industrial development revenue bonds (tax exempt bonds) in the event they are tendered by individual bondholders and not remarketed prior to maturity, as well as, the repayment of approximately $236 million of floating rate notes in the event an individual noteholder requires repayment prior to maturity. Gulf Power's syndicated revolving credit facilities are also available to support the purchase of approximately $269 million of its tax exempt bonds in the event they are tendered by individual bondholders and not remarketed prior to maturity. Approximately $2,314 million of FPL's and $4,109 million of NEECH's syndicated revolving credit facilities expire in 2024.

(b)	Only available for the issuance of letters of credit.

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(a)	Includes principal, interest, interest rate contracts and payments by NEE under stock purchase contracts. Variable rate interest was computed using December 31, 2019 rates. See Note 12.

(b)

Includes tax exempt bonds at FPL of approximately $9 million in 2020, $46 million in 2021, $96 million in 2022, $15 million in 2023, $146 in 2024 and $636 million thereafter and at Gulf Power of approximately $41 million in 2022 and $228 million after 2024 that permit individual bondholders to tender the bonds for purchase at any time prior to maturity. In the event bonds are tendered for purchase, they would be remarketed by a designated remarketing agent in accordance with the related indenture. If the remarketing is unsuccessful, FPL and Gulf Power, as the case may be, would be required to purchase the tax exempt bonds. As of December 31, 2019, all of FPL's and Gulf Power's tax exempt bonds tendered for purchase had been successfully remarketed. Also includes at FPL floating rate notes of approximately $236 million maturing after 2024 that permit individual noteholders to require repayment prior to maturity. FPL’s syndicated revolving credit facilities are available to support the purchase of tax exempt bonds and the repayment of floating rate notes. Gulf Power's syndicated revolving credit facilities are available to support the purchase of Gulf Power's tax exempt bonds.

(c)	Represents projected capital expenditures through 2024, as well as, for FPL, required minimum payments primarily under long-term fuel transportation contracts (see Note 15 - Commitments and - Contracts).

(d)	See Note 15 - Contracts.

(e)	Represents expected cash payments adjusted for inflation for estimated costs to perform asset retirement activities.

(f)	At December 31, 2019, FPL had approximately $4,697 million in restricted funds (included in NEE’s and FPL’s special use funds) for the payment of its portion of future expenditures to decommission the Turkey Point and St. Lucie nuclear units. See Note 13.

(g)	At December 31, 2019, NEER had approximately $2,183 million in restricted funds (included in NEE’s special use funds) for the payment of its portion of future expenditures to decommission Seabrook, Duane Arnold and Point Beach nuclear units. See Note 13.

(h)	Includes lease payment obligations. See Note 14.

(i)	Includes payments related to the acquisition of certain development rights.

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(a)	A security rating is not a recommendation to buy, sell or hold securities and should be evaluated independently of any other rating. The rating is subject to revision or withdrawal at any time by the assigning rating organization.

(b)	The outlook indicated by each of Moody's, S&P and Fitch is stable.

(c)	Short-term ratings are presented as all bonds outstanding are currently paying a short-term interest rate. At FPL's election, a portion or all of the bonds may be adjusted to a long-term interest rate.

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(a)	Included in noncurrent regulatory liabilities on NEE’s and FPL’s consolidated balance sheets. See Note 1 - Rate Regulation.

(b)	Represents total amount accrued for ratemaking purposes.

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

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(a)	See Note 5.

•	Operations are primarily concentrated in the energy industry.

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

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

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

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

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•	We tested the effectiveness of controls, including those relating to commodity valuation models, and market data validation.

•	We selected a sample of transactions, obtained an understanding of the business rationale of transactions and read the underlying contractual agreements.

•	We used personnel in our firm who specialize in energy transacting to assist in auditing NEE’s energy transactions, including testing certain inputs in managements fair value models.

•	We used personnel in our firm who specialize in the valuation of energy products to independently value Level 3 transactions to provide us with a benchmark for comparison to NEE valuations.

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(a)	Dividends per share were $5.00, $4.44 and $3.93 for the years ended December 31, 2019, 2018 and 2017, respectively.

(b)	See Note 1 - NextEra Energy Partners, LP.

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

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•	New retail base rates and charges were established resulting in the following increases in annualized retail base revenues:

◦	$400 million beginning January 1, 2017;

◦	$211 million beginning January 1, 2018; and

◦	$200 million beginning April 1, 2019 for a new approximately 1,720 megawatts (MW) natural gas-fired combined-cycle unit in Okeechobee County, Florida that achieved commercial operation on March 31, 2019.

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In addition, FPL is eligible to receive base rate increases associated with the addition of up to 300 MW annually of new solar generation in each of 2017 through 2020 with an installed cost cap of $1,750 per kilowatt (kW). Approximately 900 MW of new solar generating capacity has become operational, 600 MW in the first quarter of 2018 and 300 MW in the first quarter of 2019. An additional 300 MW is expected to be operational in the second quarter of 2020.

•	FPL's allowed regulatory return on common equity (ROE) is 10.55%, with a range of 9.60% to 11.60%. If FPL's earned regulatory ROE falls below 9.60%, FPL may seek retail base rate relief. If the earned regulatory ROE rises above 11.60%, any party other than FPL may seek a review of FPL's retail base rates.

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Subject to certain conditions, FPL may amortize, over the term of the 2016 rate agreement, up to $1.0 billion of depreciation reserve surplus plus the reserve amount that remained under FPL's previous rate agreement (approximately $250 million), provided that in any year of the 2016 rate agreement FPL must amortize at least enough reserve to maintain a 9.60% earned regulatory ROE but may not amortize any reserve that would result in an earned regulatory ROE in excess of 11.60%.

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Future storm restoration costs would be recoverable on an interim basis beginning 60 days from the filing of a cost recovery petition, but capped at an amount that could produce a surcharge of no more than $4 for every 1,000 kilowatt-hour (kWh) of usage on residential bills during the first 12 months of cost recovery. Any additional costs would be eligible for recovery in subsequent years. If storm restoration costs exceed $800 million in any given calendar year, FPL may request an increase to the $4 surcharge to recover amounts above $400 million. See Storm Fund, Storm Reserve and Storm Cost Recovery below.

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(a)	Relates to substantially funded pension obligations in connection with the acquisitions of Gulf Power and Florida City Gas, see Note 8.

(b)	Reflects enhanced early retirement programs.

(c)	NEE's accumulated pension benefit obligation, which includes no assumption about future salary levels, at December 31, 2019 and 2018 was approximately $3,281 million and $2,479 million, respectively.

(d)	Reflects FPL's allocated benefits under NEE's pension plan.

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(a)	The method of estimating the interest cost component of net periodic benefit costs uses a full yield curve approach by applying a specific spot rate along the yield curve.

(a)	See Note 5 for discussion of fair value measurement techniques and inputs.

(b)	Includes foreign investments of $741 million.

(c)	Includes foreign investments of $141 million.

(d)	Includes foreign investments of $76 million.

(e)	Includes foreign investments of $5 million.

(f)	Includes foreign investments of $20 million.

(g)	Includes foreign investments of $190 million.

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(a)	See Note 5 for discussion of fair value measurement techniques and inputs.

(b)	Includes foreign investments of $459 million.

(c)	Includes foreign investments of $193 million.

(d)	Includes foreign investments of $77 million.

(e)	Includes foreign investments of $30 million.

(f)	Includes foreign investments of $214 million.

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(a)

In developing the expected long-term rate of return on assets assumption for its pension plan, NEE evaluated input, including other qualitative and quantitative factors, from its actuaries and consultants, as well as information available in the marketplace. NEE considered different models, capital market return assumptions and historical returns for a portfolio with an equity/bond asset mix similar to its pension fund. NEE also considered its pension fund's historical compounded returns.

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(a)	Reflects the netting of approximately $2 million in margin cash collateral received from counterparties.

(b)	Reflects the netting of approximately $139 million in margin cash collateral received from counterparties.

(c)	Reflects the netting of approximately $66 million in margin cash collateral paid to counterparties.

(d)	See Note 1 - Disposal of Businesses/Assets.

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(a)	Reflects the netting of approximately $124 million in margin cash collateral received from counterparties.

(b)	Reflects the netting of approximately $65 million in margin cash collateral received from counterparties.

(a)	For the years ended December 31, 2019, 2018 and 2017, FPL recorded gains (losses) of approximately $9 million, $(31) million and $(169) million, respectively, related to commodity contracts as regulatory liabilities (assets) on its consolidated balance sheets.

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(a)	Megawatt-hours

(b)	One million British thermal units

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(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 consolidated balance sheets and are recorded in customer receivables - net and accounts payable, respectively.

(b)	Includes restricted cash equivalents of approximately $60 million ($54 million for FPL) in current other assets and $64 million ($64 million for FPL) in noncurrent other assets on the 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)	Included in noncurrent other assets in the consolidated balance sheets.

(f)	See Note 4 - Fair Value of Derivative Instruments for a reconciliation of net derivatives to NEE's and FPL's consolidated balance sheets.

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(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 consolidated balance sheets and are recorded in customer receivables - net and accounts payable, respectively.

(b)	Includes restricted cash equivalents of approximately $85 million ($81 million for FPL) in current other assets on the 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)	Included in noncurrent other assets in the consolidated balance sheets.

(f)	See Note 4 - Fair Value of Derivative Instruments for a reconciliation of net derivatives to NEE's and FPL's consolidated balance sheets.

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(a)	Applies only to full requirements contracts.

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

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(a)	For the years ended December 31, 2019, 2018 and 2017, approximately $956 million, $48 million and $379 million of realized and unrealized gains are included in the consolidated statements of income in operating revenues and the balance is included in interest expense.

(b)	Included in net unrealized gains (losses) on foreign currency translation in the consolidated statements of comprehensive income.

(c)	Transfers into Level 3 were a result of decreased observability of market data. Transfers from Level 3 to Level 2 were a result of increased observability of market data. NEE's and FPL's policy is to recognize all transfers at the beginning of the reporting period.

(d)	For the years ended December 31, 2019, 2018 and 2017, approximately $638 million, $112 million and $281 million of unrealized gains are included in the consolidated statements of income in operating revenues and the balance is included in interest expense.

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

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

(c)	Excludes debt totaling approximately $463 million classified as held for sale, which is included in current other liabilities on NEE's consolidated balance sheets, for which the carrying amount approximates fair value. See Note 1 - Disposal of Businesses/Assets.

(d)	At December 31, 2019 and 2018, substantially all is Level 2 for NEE and all is Level 2 for FPL.

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(a)	Unrealized losses on available for sale debt securities in an unrealized loss position for greater than twelve months at December 31, 2019 and 2018 were not material to NEE or FPL.

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(a)

2019 reflects an adjustment of approximately $83 million recorded by FPL to reduce income tax expense for the cumulative amortization of excess deferred income taxes from January 1, 2018 as a result of a FPSC order in connection with its review of impacts associated with tax reform. One of the provisions of the order requires FPL to amortize approximately $870 million of its excess deferred income taxes over a period not to exceed ten years.

(a)	Reflects a valuation allowance related to the solar projects in Spain that completely offsets the related deferred taxes, as well as deferred state tax credits and state operating loss carryforwards.

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(a)	Includes $58 million of net operating loss carryforwards with an indefinite expiration period.

(b)	Includes $188 million of ITC carryforwards with an indefinite expiration period.

(a)	Excludes nuclear fuel.

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(a)	Reflects NEE's interest, as well as third-party interests, in NEP OpCo.

(b)	Primarily associated with NEP OpCo; approximately 70% of the difference between the investment carrying amount and the underlying equity in net assets relates to goodwill and is not being amortized; the remaining balance is being amortized primarily over a period of 20 to 28 years.

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(a)	The 2018 adjustment is related to both the NEP Series A convertible preferred units and the NEP senior unsecured convertible notes (see Potentially Dilutive Securities at NEP below).

(b)	Calculated using the treasury stock method. Performance share awards are included in diluted weighted-average number of common shares outstanding based

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(a)	Based on historical experience.

(b)	Based on historical exercise and post-vesting cancellation experience adjusted for outstanding awards.

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(a)	Reclassified to interest expense in NEE's consolidated statements of income. See Note 4 - Income Statement Impact of Derivative Instruments.

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

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

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(a)

Includes variable rate tax exempt bonds that permit individual bondholders to tender the bonds for purchase at any time prior to maturity. In the event these variable rate tax exempt bonds are tendered for purchase, they would be remarketed by a designated remarketing agent in accordance with the related indenture. If the remarketing is unsuccessful, FPL or Gulf Power, as the case may be, would be required to purchase the variable rate tax exempt bonds. At December 31, 2019, variable rate tax exempt bonds totaled approximately $948 million at FPL and $269 million at Gulf Power. All variable rate tax exempt bonds tendered for purchase have been successfully remarketed. FPL's and Gulf Power's syndicated revolving credit facilities, as the case may be, are available to support the purchase of the variable rate tax exempt bonds. Variable interest rate is established at various intervals by the remarketing agent. Gulf Power's remaining debt is primarily variable which is based on an underlying index plus a margin.

(b)	Includes approximately $236 million of floating rate notes that permit individual noteholders to require repayment prior to maturity. FPL’s syndicated revolving credit facilities are available to support the purchase of the senior unsecured notes.

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

(d)	Interest rate contracts, primarily swaps, have been entered into with respect to certain of these debt issuances. See Note 4.

(e)	Excludes approximately $463 million classified as held for sale, which is included in current other liabilities on NEE's consolidated balance sheets. See Note 1 - Disposal of Businesses/Assets.

(f)	Foreign currency contracts have been entered into with respect to these debt issuances. See Note 4.

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(a)	Primarily reflects sales of ownership interests to subsidiaries of NEP. See Note 1 - Disposal of Businesses/Assets.

(b)	See Note 1 - NextEra Energy Partners, LP.

(c)	Includes an increase of approximately $75 million for additional estimated ash pond closure costs at Scherer, partly offset by a decrease of approximately $71 million due to the approval of Turkey Point Units Nos. 3 and 4 license renewals for an additional 20 years.

(d)	See Note 8 for 2019 acquisitions.

(e)	Includes the current portion of AROs of approximately $49 million, which is included in other current liabilities on NEE's consolidated balance sheets.

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(a)	Includes AFUDC of approximately $45 million, $70 million, $40 million, and $20 million for 2020 through 2023, respectively.

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

(c)	Includes AFUDC of approximately $40 million, $50 million, $40 million, $25 million and $20 million for 2020 through 2024, respectively.

(d)	Consists of capital expenditures for new wind projects, repowering of existing wind projects and related transmission totaling approximately 4,400 MW.

(e)	Includes capital expenditures for new solar projects and related transmission totaling approximately 1,180 MW.

(f)	Construction of two natural gas pipelines are subject to certain conditions, including applicable regulatory approvals. In addition, completion of another natural gas pipeline is subject to final permitting.

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(a)

Includes approximately $385 million, $415 million, $415 million, $410 million, $410 million and $6,765 million in 2020 through 2024 and thereafter, respectively, of firm commitments related to the natural gas transportation agreements with Sabal Trail and Florida Southeast Connection, LLC. The charges associated with these agreements are recoverable through the fuel clause and totaled approximately $316 million and $303 million for the years ended December 31, 2019 and 2018, respectively, of which $108 million and $95 million, respectively, were eliminated in consolidation at NEE.

(b)

Includes approximately $70 million, $70 million, $70 million, $70 million and $1,110 million for 2021 through 2024 and thereafter, respectively, of firm commitments related to a natural gas transportation agreement with a joint venture, in which NEER has a 31% equity investment, that is constructing a natural gas pipeline. These firm commitments are subject to the completion of construction of the pipeline which is expected in 2020.

(c)	Includes an approximately $110 million commitment to invest in technology investments through 2029.

(d)	Includes approximately $60 million, $20 million, $20 million, $20 million, $10 million and $15 million for 2020 through 2024 and thereafter, respectively, of joint obligations of NEECH and NEER.

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(a)	See Note 8 - Gulf Power Company.

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

(c)	NEER includes PTCs that were recognized based on its tax sharing agreement with NEE. See Note 1 - Income Taxes.

(d)	NEP was deconsolidated from NEER in January 2018. See Note 1 - NextEra Energy Partners, LP.

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(a)	Represents primarily FPL and consolidating adjustments.

(a)	Represents primarily FPL and consolidating adjustments.

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(a)	Represents primarily FPL and consolidating adjustments.

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(a)	Represents primarily FPL and consolidating adjustments.

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(a)	In the opinion of NEE and FPL management, all adjustments, which consist of normal recurring accruals necessary to present a fair statement of the amounts shown for such periods, have been made. Results of operations for an interim period generally will not give a true indication of results for the year.

(b)	The sum of the quarterly amounts may not equal the total for the year due to rounding.

(c)	The sum of the quarterly amounts may not equal the total for the year due to rounding and changes in weighted-average number of common shares outstanding.

(d)	First quarter of 2018 includes gain on the deconsolidation of NEP (see Note 1 - NextEra Energy Partners, LP).

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(a)	Management's Annual Report on Internal Control Over Financial Reporting

(b)	Attestation Report of the Independent Registered Public Accounting Firm

(c)	Changes in Internal Control Over Financial Reporting

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(a)

Includes an aggregate of 2,416,688 outstanding options, 1,422,352 unvested performance share awards (at maximum payout), 22,446 deferred fully vested performance shares and 117,936 deferred stock awards (including future reinvested dividends) under the NextEra Energy, Inc. Amended and Restated 2011 Long Term Incentive Plan and former LTIP, and 31,932 fully vested shares deferred by directors under the NextEra Energy, Inc. 2007 Non-Employee Directors Stock Plan and its predecessor, the FPL Group, Inc. Amended and Restated Non-Employee Directors Stock Plan.

(b)	Relates to outstanding options only.

(c)	Includes 5,939,880 shares under the NextEra Energy, Inc. Amended and Restated 2011 Long Term Incentive Plan and 474,608 shares under the NextEra Energy, Inc. 2017 Non-Employee Directors Stock Plan.

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(a)	Audit fees consist of fees billed for professional services rendered for the audit of FPL's and NEE's annual consolidated financial statements for the fiscal year, the reviews of the financial statements included in FPL's and NEE's Quarterly Reports on Form 10-Q during the fiscal year and the audit of the effectiveness of internal control over financial reporting, comfort letters, and consents.

(b)	Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of FPL's and NEE's consolidated financial statements and are not reported under audit fees. These fees primarily relate to audits of subsidiary financial statements and attestation services.

(c)

Tax fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning. In 2019 and 2018, approximately $2,069,000 and $36,000, respectively, was paid related to tax compliance services. In 2019, these fees primarily related to research and development tax credit compliance services. All other tax fees in 2019 and in 2018 related to tax advice and planning services.

(d)	All other fees consist of fees for products and services other than the services reported under the other named categories. In 2019 and 2018, these fees related to training.

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