Common Shareholders' Equity

12 Months Ended

Dec. 31, 2013

Stockholders' Equity Note [Abstract]

Common Shareholders' Equity

10.Common Shareholders' Equity

Earnings Per Share - The reconciliation of NEE's basic and diluted earnings per share of common stock from continuing operations is as follows:

	Years Ended December 31,
	2013		2012		2011
	(millions, except per share amounts)
Numerator - income from continuing operations	$	1,720	$	1,911	$	1,923
Denominator:
Weighted-average number of common shares outstanding - basic	424.2		416.7		416.6
Performance share awards, options, equity units and restricted stock(a)	2.8		2.5		2.4
Weighted-average number of common shares outstanding - assuming dilution	427.0		419.2		419.0
Earnings per share of common stock from continuing operations:
Basic	$	4.06	$	4.59	$	4.62
Assuming dilution	$	4.03	$	4.56	$	4.59

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(a) 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.  Options, performance share awards, restricted stock and equity units are included in diluted weighted-average number of common shares outstanding by applying the treasury stock method.

Common shares issuable pursuant to equity units, the forward sale agreement described below, stock options and performance share awards and restricted stock which were not included in the denominator above due to their antidilutive effect were approximately 7.1 million, 11.4 million and 14.6 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Issuance of Common Stock and Forward Sale Agreement - In November 2013, NEE sold 4.5 million shares of its common stock at a price of $88.03 per share, and a forward counterparty borrowed and sold 6.6 million shares of NEE's common stock (borrowed shares) in connection with the forward sale agreement described below.

In connection with the offering and sale of the borrowed shares, NEE entered into a confirmation of forward sale transaction (forward sale agreement) with a forward counterparty for the borrowed shares, to be settled on a date or dates, to be specified at NEE's direction, no later than December 31, 2014. NEE may elect physical settlement, cash settlement or net share settlement for all or a portion of its rights or obligations under the forward sale agreement. If NEE physically settles, it will deliver the shares in exchange for cash proceeds at the then applicable forward sale price, which represents the initial forward sale price of $88.03 per share less certain adjustments as specified in the forward sale agreement.  The forward sale transaction is classified as an equity transaction because it is indexed to NEE's common stock and physical settlement is within NEE's control.  With respect to the borrowed shares, NEE will not receive any proceeds or issue any shares until the settlement of the forward sale agreement. At December 31, 2013, if NEE had settled the forward sale agreement by delivery of the 6.6 million shares of its common stock to the forward counterparty, NEE would have received net proceeds of approximately $576 million.

Prior to the settlement date, the forward sale agreement will have a dilutive effect on NEE’s earnings per share when the average market price per share of NEE’s common stock is above the adjusted forward sale price per share. As of December 31, 2013, the adjusted forward sale price per share was greater than the average market price per share; accordingly, the 6.6 million shares were antidilutive.

Common Stock Dividend Restrictions - NEE's charter does not limit the dividends that may be paid on its common stock.  FPL's mortgage securing FPL's first mortgage bonds contains provisions which, under certain conditions, restrict the payment of dividends and other distributions to NEE.  These restrictions do not currently limit FPL's ability to pay dividends to NEE.

Employee Stock Ownership Plan - The employee retirement savings plans of NEE include a leveraged ESOP feature.  Shares of common stock held by the trust for the employee retirement savings plans (Trust) are used to provide all or a portion of the employers' matching contributions.  Dividends received on all shares, along with cash contributions from the employers, are used to pay principal and interest on an ESOP loan held by a subsidiary of NEECH.  Dividends on shares allocated to employee accounts and used by the Trust for debt service are replaced with shares of common stock, at prevailing market prices, in an equivalent amount.  For purposes of computing basic and fully diluted earnings per share, ESOP shares that have been committed to be released are considered outstanding.

ESOP-related compensation expense was approximately $46 million, $44 million and $42 million in 2013, 2012 and 2011, respectively.  The related share release was based on the fair value of shares allocated to employee accounts during the period.  Interest income on the ESOP loan is eliminated in consolidation.  ESOP-related unearned compensation included as a reduction of common shareholders' equity at December 31, 2013 was approximately $26 million, representing unallocated shares at the original issue price.  The fair value of the ESOP-related unearned compensation account using the closing price of NEE common stock at December 31, 2013 was approximately $155 million.

Stock-Based Compensation - Net income for the years ended December 31, 2013, 2012 and 2011 includes approximately $67 million, $57 million and $49 million, respectively, of compensation costs and $26 million, $22 million and $19 million, respectively, of income tax benefits related to stock-based compensation arrangements.  Compensation cost capitalized for the years ended December 31, 2013, 2012 and 2011 was not material.  As of December 31, 2013, there were approximately $59 million of unrecognized compensation costs related to nonvested/nonexercisable stock-based compensation arrangements.  These costs are expected to be recognized over a weighted-average period of 1.95 years.

At December 31, 2013, approximately 18 million shares of common stock were authorized for awards to officers, employees and non-employee directors of NEE and its subsidiaries under NEE's: (a) 2011 Long Term Incentive Plan, (b) 2007 Non-Employee Directors Stock Plan and (c) earlier equity compensation plans under which shares are reserved for issuance under existing grants, but no additional shares are available for grant under the earlier plans.  NEE satisfies restricted stock and performance share awards by issuing new shares of its common stock or by purchasing shares of its common stock in the open market.  NEE satisfies stock option exercises by issuing new shares of its common stock.  NEE generally grants most of its stock-based compensation awards in the first quarter of each year.

Restricted Stock and Performance Share Awards- Restricted stock typically vests within three years after the date of grant and is subject to, among other things, restrictions on transferability prior to vesting.  The fair value of restricted stock is measured based upon the closing market price of NEE common stock as of the date of grant.  Performance share awards are typically payable at the end of a three-year performance period if the specified performance criteria are met.  The fair value of performance share awards is estimated primarily based upon the closing market price of NEE common stock as of the date of grant less the present value of expected dividends, multiplied by an estimated performance multiple which is subsequently trued up based on actual performance.  

The activity in restricted stock and performance share awards for the year ended December 31, 2013 was as follows:

	Shares		Weighted- Average Grant Date Fair Value Per Share
Restricted Stock:
Nonvested balance, January 1, 2013	863,625		$	55.26
Granted	320,555		$	74.02
Vested	(425,920	)	$	54.75
Forfeited	(44,424	)	$	61.65
Nonvested balance, December 31, 2013	713,836		$	63.59
Performance Share Awards:
Nonvested balance, January 1, 2013	1,285,089		$	46.65
Granted	681,770		$	58.53
Vested	(691,769	)	$	42.12
Forfeited	(79,173	)	$	54.36
Nonvested balance, December 31, 2013	1,195,917		$	55.55

The weighted-average grant date fair value per share of restricted stock granted for the years ended December 31, 2012 and 2011 was $60.78 and $54.77 respectively.  The weighted-average grant date fair value per share of performance share awards granted for the years ended December 31, 2012 and 2011 was $51.23 and $50.13, respectively.

The total fair value of restricted stock and performance share awards vested was $82 million, $71 million and $53 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Options - Options typically vest within three years after the date of grant and have a maximum term of ten years.  The exercise price of each option granted equals the closing market price of NEE common stock on the date of grant.  The fair value of the options is estimated on the date of the grant using the Black-Scholes option-pricing model and based on the following assumptions:

	2013	2012	2011
Expected volatility(a)	20.08 - 20.15%	21.00%	21.54%
Expected dividends	3.28 - 3.64%	3.99%	4.03%
Expected term (years)(b)	7.0	6.7	6.0
Risk-free rate	1.15 - 1.40%	1.37%	2.80%

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(a) Based on historical experience.

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

Option activity for the year ended December 31, 2013 was as follows:

	Shares Underlying Options		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (millions)
Balance, January 1, 2013	3,191,090		$	50.69
Granted	393,396		$	72.63
Exercised	(363,279	)	$	38.19
Forfeited	(28,860	)	$	64.46
Expired	(800	)	$	28.38
Balance, December 31, 2013	3,191,547		$	54.70	5.9	$	99
Exercisable, December 31, 2013	2,453,246		$	51.78	5.1	$	83

The weighted-average grant date fair value of options granted was $9.20, $7.69 and $7.78 per share for the years ended December 31, 2013, 2012 and 2011, respectively.  The total intrinsic value of stock options exercised was approximately $14 million, $57 million and $29 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Cash received from option exercises was approximately $14 million, $55 million and $31 million for the years ended December 31, 2013, 2012 and 2011, respectively.  The tax benefits realized from options exercised were approximately $5 million, $22 million and $11 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Accelerated Share Repurchase (ASR) of NEE Common Stock - In December 2011, NEE purchased approximately 6.7 million shares of its common stock at a price of $55.76 per share for an aggregate price of $375 million pursuant to an ASR agreement.  The approximately 6.7 million shares repurchased were retired, which resulted in a decrease in common stock and additional paid-in capital on NEE's consolidated statement of common stockholders' equity.  In February 2012, NEE elected to settle the ASR agreement in cash; the settlement amount was not material.

Preferred Stock - NEE's charter authorizes the issuance of 100 million shares of serial preferred stock, $0.01 par value, none of which are outstanding.  FPL's charter authorizes the issuance of 10,414,100 shares of preferred stock, $100 par value; 5 million shares of subordinated preferred stock, no par value and 5 million shares of preferred stock, no par value, none of which are outstanding.

Accumulated Other Comprehensive Income (Loss) - The components of AOCI are as follows:

	Accumulated Other Comprehensive Income (Loss)
	Net Unrealized Gains (Losses) on Cash Flow Hedges				Net Unrealized Gains (Losses) on Available for Sale Securities				Defined Benefit Pension and Other Benefits Plans			Net Unrealized Gains (Losses) on Foreign Currency Translation			Other Comprehensive Income (Loss) Related to Equity Method Investee			Total
	(millions)
Balances, December 31, 2010	$	24			$	133			$	(1	)	$	10		$	—		$	166
Other comprehensive loss	(228		)		(30		)		(45		)	(5		)	(12		)	(320		)
Balances, December 31, 2011	(204		)		103				(46		)	5			(12		)	(154		)
Other comprehensive income (loss)	(62		)		(7		)		(28		)	7			(11		)	(101		)
Balances, December 31, 2012	(266		)		96				(74		)	12			(23		)	(255		)
Other comprehensive income (loss) before reclassifications	84				118				95			(45		)	7			259
Amounts reclassified from AOCI	67			(a)	(17		)	(b)	2			—			—			52
Net other comprehensive income (loss)	151				101				97			(45		)	7			311
Balances, December 31, 2013	$	(115	)		$	197			$	23		$	(33	)	$	(16	)	$	56

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(a) Reclassified to interest expense and other - net in NEE's consolidated statements of income. See Note 3 - Income Statement Impact of Derivative Instruments.

(b) Reclassified to gains on disposal of assets - net in NEE's consolidated statements of income.