Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Financial assets and liabilities and other fair value measurements

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:

	March 31, 2013
	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Netting(a)			Total
	(millions)
Assets:
Cash equivalents:
NEE - equity securities	$	3	$	—		$	—	$	—		$	3
Special use funds:
NEE:
Equity securities	$	965	$	1,370	(b)	$	—	$	—		$	2,335
U.S. Government and municipal bonds	$	537	$	119		$	—	$	—		$	656
Corporate debt securities	$	—	$	576		$	—	$	—		$	576
Mortgage-backed securities	$	—	$	518		$	—	$	—		$	518
Other debt securities	$	19	$	29		$	—	$	—		$	48
FPL:
Equity securities	$	219	$	1,233	(b)	$	—	$	—		$	1,452
U.S. Government and municipal bonds	$	456	$	107		$	—	$	—		$	563
Corporate debt securities	$	—	$	394		$	—	$	—		$	394
Mortgage-backed securities	$	—	$	436		$	—	$	—		$	436
Other debt securities	$	19	$	19		$	—	$	—		$	38
Other investments:
NEE:
Equity securities	$	43	$	—		$	—	$	—		$	43
U.S. Government and municipal bonds	$	5	$	—		$	—	$	—		$	5
Corporate debt securities	$	—	$	60		$	—	$	—		$	60
Mortgage-backed securities	$	—	$	45		$	—	$	—		$	45
Other	$	5	$	6		$	—	$	—		$	11
Derivatives:
NEE:
Commodity contracts	$	1,083	$	2,203		$	816	$	(2,787	)	$	1,315	(c)
Interest rate swaps	$	—	$	73		$	—	$	—		$	73	(c)
FPL - commodity contracts	$	—	$	142		$	4	$	(1	)	$	145	(c)
Liabilities:
Derivatives:
NEE:
Commodity contracts	$	1,122	$	1,674		$	294	$	(2,667	)	$	423	(c)
Interest rate swaps	$	—	$	284		$	—	$	—		$	284	(c)
Foreign currency swaps	$	—	$	103		$	—	$	—		$	103	(c)
FPL - commodity contracts	$	—	$	—		$	2	$	(1	)	$	1	(c)

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(a) Includes the effect of the contractual ability to settle contracts under master netting arrangements and margin cash collateral payments and receipts. NEE also has 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) At NEE, approximately $1,350 million ($1,216 million at FPL) are invested in commingled funds whose underlying investments would be Level 1 if those investments were held directly by NEE or FPL.

(c) See Note 2 for a reconciliation of net derivatives to NEE's and FPL's condensed consolidated balance sheets.

	December 31, 2012
	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Netting(a)			Total
	(millions)
Assets:
Cash equivalents:
NEE - equity securities	$	23	$	—		$	—	$	—		$	23
FPL - equity securities	$	5	$	—		$	—	$	—		$	5
Special use funds:
NEE:
Equity securities	$	914	$	1,240	(b)	$	—	$	—		$	2,154
U.S. Government and municipal bonds	$	451	$	143		$	—	$	—		$	594
Corporate debt securities	$	—	$	572		$	—	$	—		$	572
Mortgage-backed securities	$	—	$	560		$	—	$	—		$	560
Other debt securities	$	15	$	26		$	—	$	—		$	41
FPL:
Equity securities	$	217	$	1,118	(b)	$	—	$	—		$	1,335
U.S. Government and municipal bonds	$	390	$	119		$	—	$	—		$	509
Corporate debt securities	$	—	$	397		$	—	$	—		$	397
Mortgage-backed securities	$	—	$	475		$	—	$	—		$	475
Other debt securities	$	16	$	16		$	—	$	—		$	32
Other investments:
NEE:
Equity securities	$	7	$	—		$	—	$	—		$	7
U.S. Government and municipal bonds	$	6	$	—		$	—	$	—		$	6
Corporate debt securities	$	—	$	53		$	—	$	—		$	53
Mortgage-backed securities	$	—	$	47		$	—	$	—		$	47
Other	$	5	$	6		$	—	$	—		$	11
Derivatives:
NEE:
Commodity contracts	$	1,187	$	2,251		$	794	$	(2,871	)	$	1,361	(c)
Interest rate swaps	$	—	$	76		$	—	$	—		$	76	(c)
FPL - commodity contracts	$	—	$	14		$	3	$	(12	)	$	5	(c)
Liabilities:
Derivatives:
NEE:
Commodity contracts	$	1,240	$	1,844		$	228	$	(2,748	)	$	564	(c)
Interest rate swaps	$	—	$	387		$	—	$	—		$	387	(c)
Foreign currency swaps	$	—	$	66		$	—	$	—		$	66	(c)
FPL - commodity contracts	$	—	$	31		$	1	$	(12	)	$	20	(c)

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(a) Includes the effect of the contractual ability to settle contracts under master netting arrangements and margin cash collateral payments and receipts. NEE also has 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) At NEE, approximately $1,214 million ($1,093 million at FPL) are invested in commingled funds whose underlying investments would be Level 1 if those investments were held directly by NEE or FPL.

(c) See Note 2 for a reconciliation of net derivatives to NEE's and FPL's condensed consolidated balance sheets.

Significant unobservable inputs used in valuation of contracts categorized as Level 3

The significant unobservable inputs used in the valuation of NEE's contracts categorized as Level 3 of the fair value hierarchy at March 31, 2013 are as follows:

Transaction Type	Fair Value at March 31, 2013		Valuation Technique(s)	Significant Unobservable Inputs	Range
	Assets	Liabilities
	(millions)
Forward contracts - power	$446	$78	Discounted cash flow	Forward price (per mwh)	$1	—	$179
Options - power	$104	$117	Option models	Implied correlations	12%	—	98%
				Implied volatilities	1%	—	135%
Options - gas	$33	$28	Option models	Implied correlations	12%	—	98%
				Implied volatilities	1%	—	30%
Full requirements and unit contingent contracts	$206	$60	Discounted cash flow	Forward price (per mwh)	$(2)	—	$145
				Customer migration rate(a)	—%	—	20%

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(a) Applies only to full requirements contracts.

Reconciliation of changes in the fair value of derivatives measured based on significant unobservable inputs

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

	Three Months Ended March 31,
	2013						2012
	NEE			FPL			NEE			FPL
	(millions)
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior year	$	566		$	2		$	486		$	4
Realized and unrealized gains (losses):
Included in earnings(a)	(3		)	—			231			—
Included in regulatory assets and liabilities	1			1			4			4
Purchases	49			—			158			—
Settlements	(33		)	(1		)	(124		)	(1		)
Issuances	(64		)	—			(177		)	—
Transfers in(b)	—			—			16			—
Transfers out(b)	6			—			(5		)	—
Fair value of net derivatives based on significant unobservable inputs at March 31	$	522		$	2		$	589		$	7
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(c)	$	32		$	—		$	221		$	—

————————————

(a) For the three months ended March 31, 2013 and 2012, less than $(1) million and $228 million, respectively, of realized and unrealized gains (losses) are reflected in the condensed consolidated statements of income in operating revenues and the balance is reflected in fuel, purchased power and interchange.

(b) 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.

(c) For the three months ended March 31, 2013 and 2012, $31 million and $219 million, respectively, of unrealized gains are reflected in the condensed consolidated statements of income in operating revenues and the balance is reflected in fuel, purchased power and interchange.