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Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2016
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:
 
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 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 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 3 - Fair Value of Derivative Instruments for a reconciliation of net derivatives to NEE's and FPL's consolidated balance sheets.

 
December 31, 2015
 
 
Level 1
 
Level 2
 
Level 3
 
Netting(a)
 
Total
 
 
(millions)
 
Assets:
 
 
 
 
 
 
 
 
 
 
Cash equivalents and restricted cash:(b)
 
 
 
 
 
 
 
 
 
 
NEE - equity securities
$
312

 
$
—

 
$
—

 
 
 
$
312

 
FPL - equity securities
$
36

 
$
—

 
$
—

 
 
 
$
36

 
Special use funds:(c)
 
 
 
 
 
 
 
 
 
 
NEE:
 
 
 
 
 
 
 
 
 
 
Equity securities
$
1,320

 
$
1,354

(d) 
$
—

 
 
 
$
2,674

 
U.S. Government and municipal bonds
$
446

 
$
166

 
$
—

 
 
 
$
612

 
Corporate debt securities
$
—

 
$
713

 
$
—

 
 
 
$
713

 
Mortgage-backed securities
$
—

 
$
412

 
$
—

 
 
 
$
412

 
Other debt securities
$
—

 
$
52

 
$
—

 
 
 
$
52

 
FPL:
 
 
 
 
 
 
 
 
 
 
Equity securities
$
364

 
$
1,234

(d) 
$
—

 
 
 
$
1,598

 
U.S. Government and municipal bonds
$
335

 
$
145

 
$
—

 
 
 
$
480

 
Corporate debt securities
$
—

 
$
531

 
$
—

 
 
 
$
531

 
Mortgage-backed securities
$
—

 
$
327

 
$
—

 
 
 
$
327

 
Other debt securities
$
—

 
$
40

 
$
—

 
 
 
$
40

 
Other investments:
 
 
 
 
 
 
 
 
 
 
NEE:
 
 
 
 
 
 
 
 
 
 
Equity securities
$
30

 
$
10

 
$
—

 
 
 
$
40

 
Debt securities
$
39

 
$
132

 
$
—

 
 
 
$
171

 
Derivatives:
 
 
 
 
 
 
 
 
 
 
NEE:
 
 
 
 
 
 
 
 
 
 
Commodity contracts
$
2,187

 
$
2,540

 
$
1,179

 
$
(3,969
)
 
$
1,937

(e) 
Interest rate contracts
$
—

 
$
35

 
$
—

 
$
(1
)
 
$
34

(e) 
FPL - commodity contracts
$
—

 
$
1

 
$
6

 
$
(3
)
 
$
4

(e) 
Liabilities:
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
NEE:
 
 
 
 
 
 
 
 
 
 
Commodity contracts
$
2,153

 
$
1,887

 
$
540

 
$
(3,598
)
 
$
982

(e) 
Interest rate contracts
$
—

 
$
214

 
$
101

 
$
4

 
$
319

(e) 
Foreign currency contracts
$
—

 
$
132

 
$
—

 
$
(5
)
 
$
127

(e) 
FPL - commodity contracts
$
—

 
$
219

 
$
6

 
$
(3
)
 
$
222

(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 consolidated balance sheets and are recorded in customer receivables - net and accounts payable, respectively.
(b)
Includes restricted cash of approximately $61 million ($36 million for FPL) in other current 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)
See Note 3 - Fair Value of Derivative Instruments for a reconciliation of net derivatives to NEE's and FPL's consolidated balance sheets.
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:
 
Years Ended December 31,
 
2016
 
2015
 
2014
 
NEE
 
FPL
 
NEE
 
FPL
 
NEE
 
FPL
 
(millions)
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior year
$
538

 
$
—

 
$
622

 
$
5

 
$
622

 
$
—

Realized and unrealized gains (losses):
 

 
 

 
 

 
 

 
 

 
 

Included in earnings(a)
333

 
—

 
451

 
—

 
(77
)
 
—

Included in other comprehensive income
8

 
—

 
11

 
—

 
18

 
—

Included in regulatory assets and liabilities
1

 
1

 
3

 
3

 
7

 
7

Purchases
261

 
—

 
180

 
—

 
55

 
—

Settlements
(390
)
 
—

 
(473
)
 
(8
)
 
194

 
(2
)
Issuances
(195
)
 
—

 
(202
)
 
—

 
(122
)
 
—

Transfers in(b)
19

 
—

 
(13
)
 
—

 
80

 
—

Transfers out(b)
3

 
—

 
(41
)
 
—

 
(155
)
 
—

Fair value of net derivatives based on significant unobservable inputs at December 31
$
578

 
$
1

 
$
538

 
$
—

 
$
622

 
$
5

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)
$
219

 
$
—

 
$
277

 
$
—

 
$
248

 
$
—

______________________
(a)
For the year ended December 31, 2016, $397 million of realized and unrealized gains are reflected in the consolidated statements of income in operating revenues and the balance is reflected in interest expense. For the year ended December 31, 2015, $462 million of realized and unrealized gains are reflected in the consolidated statements of income in operating revenues and the balance is primarily reflected in interest expense. For the year December 31, 2014, $79 million of realized and unrealized losses are reflected in the consolidated statements of income in interest expense and the balance is primarily reflected in operating revenues.
(b)
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 and, in 2016, a favorable change to a credit valuation adjustment. NEE's and FPL's policy is to recognize all transfers at the beginning of the reporting period.
(c)
For the years ended December 31, 2016, 2015 and 2014, $283 million, $289 million, and $328 million of unrealized gains are reflected in the consolidated statements of income in operating revenues and the balance is reflected in interest expense.
Fair Value Inputs, Assets, Quantitative Information
The significant unobservable inputs used in the valuation of NEE's commodity contracts categorized as Level 3 of the fair value hierarchy at December 31, 2016 are as follows:
Transaction Type
 
Fair Value at
December 31, 2016
 
Valuation
Technique(s)
 
Significant
Unobservable Inputs
 
Range
 
 
Assets
 
Liabilities
 
 
 
 
 
 
 
 
 
 
(millions)
 
 
 
 
 
 
 
 
Forward contracts - power
 
$
621

 
$
206

 
Discounted cash flow
 
Forward price (per MWh)
 
$—
—
$91
Forward contracts - gas
 
27

 
10

 
Discounted cash flow
 
Forward price (per MMBtu)
 
$2
—
$11
Forward contracts - other commodity related
 
7

 
1

 
Discounted cash flow
 
Forward price (various)
 
$(17)
—
$57
Options - power
 
43

 
10

 
Option models
 
Implied correlations
 
1%
—
100%
 
 
 
 
 
 
 
 
Implied volatilities
 
9%
—
296%
Options - primarily gas
 
223

 
230

 
Option models
 
Implied correlations
 
1%
—
100%
 
 
 
 
 
 
 
 
Implied volatilities
 
1%
—
260%
Full requirements and unit contingent contracts
 
279

 
55

 
Discounted cash flow
 
Forward price (per MWh)
 
$(20)
—
$220
 
 
 
 
 
 
 
 
Customer migration rate(a)
 
—%
—
20%
Total
 
$
1,200

 
$
512

 
 
 
 
 
 
 
 
______________________
(a)
Applies only to full requirements contracts.
Fair Value, by Balance Sheet Grouping
Fair Value of Financial Instruments Recorded at Other than Fair Value - The carrying amounts of cash equivalents, 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:
 
December 31, 2016
 
December 31, 2015
 
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
 
 
(millions)
 
NEE:
 
 
Special use funds(a)
$
712

 
$
712

 
$
675

 
$
675

 
Other investments - primarily notes receivable
$
526

 
$
668

(b) 
$
512

 
$
722

(b) 
Long-term debt, including current maturities(c)
$
30,418

 
$
31,623

(d) 
$
28,897

 
$
30,412

(d) 
FPL:
 
 
 
 
 
 
 
 
Special use funds(a)
$
557

 
$
557

 
$
528

 
$
528

 
Long-term debt, including current maturities
$
10,072

 
$
11,211

(d) 
$
10,020

 
$
11,028

(d) 
______________________
(a)
Primarily represents investments accounted for under the equity method and loans not measured at fair value on a recurring basis.
(b)
Primarily classified as held to maturity. Fair values are primarily 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). Notes receivable bear interest primarily at fixed rates and mature by 2029. Notes receivable are considered impaired and placed in non-accrual status when it becomes probable that all amounts due cannot be collected in accordance with the contractual terms of the agreement. The assessment to place notes receivable in non-accrual status considers various credit indicators, such as credit ratings and market-related information.
(c)
Excludes debt totaling $373 million and $938 million, respectively, reflected in liabilities associated with assets held for sale on NEE's consolidated balance sheets for which the carrying amount approximates fair value. See Note 1 - Assets and Liabilities Associated with Assets Held for Sale.
(d)
As of December 31, 2016 and 2015, for NEE, approximately $29,804 million and $18,031 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).
Available-for-sale Securities
Realized gains and losses and proceeds from the sale or maturity of available for sale securities are as follows:
 
NEE
 
FPL
 
Years Ended December 31,
 
Years Ended December 31,
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
 
(millions)
Realized gains
$
116

 
$
194

 
$
211

 
$
53

 
$
70

 
$
120

Realized losses
$
76

 
$
87

 
$
115

 
$
44

 
$
43

 
$
94

Proceeds from sale or maturity of securities
$
3,400

 
$
4,643

 
$
4,092

 
$
2,442

 
$
3,724

 
$
3,349


The unrealized gains on available for sale securities are as follows:
 
NEE
 
FPL
 
December 31,
 
December 31,
 
2016
 
2015
 
2016
 
2015
 
 
 
(millions)
 
 
Equity securities
$
1,396

 
$
1,166

 
$
1,007

 
$
863

Debt securities
$
22

 
$
17

 
$
17

 
$
14


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
 
December 31,
 
December 31,
 
2016
 
2015
 
2016
 
2015
 
 
 
(millions)
 
 
Unrealized losses(a)
$
34

 
$
51

 
$
28

 
$
45

Fair value
$
959

 
$
1,129

 
$
722

 
$
861

______________________
(a)
Unrealized losses on available for sale debt securities in an unrealized loss position for greater than twelve months at December 31, 2016 and 2015 were not material to NEE or FPL.