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Non-Derivative Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

Financial assets and liabilities and other fair value measurements

NEE's and FPL's financial assets and other fair value measurements made on a recurring basis by fair value hierarchy level are as follows:


	March 31, 2022
	Level 1		Level 2			Level 3		Total
	(millions)
Assets:
Cash equivalents and restricted cash equivalents:(a)
NEE – equity securities	$	548	$	—		$	—	$	548
FPL – equity securities	$	46	$	—		$	—	$	46
Special use funds:(b)
NEE:
Equity securities	$	2,414	$	2,870	(c)	$	—	$	5,284
U.S. Government and municipal bonds	$	728	$	56		$	—	$	784
Corporate debt securities	$	1	$	857		$	—	$	858
Asset-backed securities	$	—	$	635		$	—	$	635
Other debt securities	$	2	$	35		$	—	$	37
FPL:
Equity securities	$	833	$	2,602	(c)	$	—	$	3,435
U.S. Government and municipal bonds	$	597	$	29		$	—	$	626
Corporate debt securities	$	—	$	634		$	—	$	634
Asset-backed securities	$	—	$	499		$	—	$	499
Other debt securities	$	2	$	24		$	—	$	26
Other investments:(d)
NEE:
Equity securities	$	67	$	2		$	—	$	69
Debt securities	$	105	$	186		$	37	$	328
FPL – equity securities	$	14	$	—		$	—	$	14

———————————————

(a)Includes restricted cash equivalents of approximately $52 million ($44 million for FPL) in current other assets on the condensed consolidated balance sheets.

(b)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.

(c)Primarily invested in commingled funds whose underlying securities would be Level 1 if those securities were held directly by NEE or FPL.

(d)Included in noncurrent other assets on NEE's and FPL's condensed consolidated balance sheets.


	December 31, 2021
	Level 1		Level 2			Level 3		Total
	(millions)
Assets:
Cash equivalents and restricted cash equivalents:(a)
NEE – equity securities	$	176	$	—		$	—	$	176
FPL – equity securities	$	58	$	—		$	—	$	58
Special use funds:(b)
NEE:
Equity securities	$	2,538	$	2,973	(c)	$	—	$	5,511
U.S. Government and municipal bonds	$	770	$	75		$	—	$	845
Corporate debt securities	$	7	$	955		$	—	$	962
Asset-backed securities	$	—	$	663		$	—	$	663
Other debt securities	$	2	$	33		$	—	$	35
FPL:
Equity securities	$	862	$	2,690	(c)	$	—	$	3,552
U.S. Government and municipal bonds	$	624	$	44		$	—	$	668
Corporate debt securities	$	6	$	720		$	—	$	726
Asset-backed securities	$	—	$	515		$	—	$	515
Other debt securities	$	2	$	23		$	—	$	25
Other investments:(d)
NEE:
Equity securities	$	70	$	2		$	—	$	72
Debt securities	$	111	$	162		$	12	$	285
FPL – equity securities	$	13	$	—		$	—	$	13

———————————————

(a)Includes restricted cash equivalents of approximately $56 million ($53 million for FPL) in current other assets on the condensed consolidated balance sheets.

(c)Primarily invested in commingled funds whose underlying securities would be Level 1 if those securities were held directly by NEE or FPL.

(d)Included in noncurrent other assets on 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 commodity contracts categorized as Level 3 of the fair value hierarchy at March 31, 2022 are as follows:


	Fair Value at				Valuation	Significant				Weighted-
Transaction Type	March 31, 2022				Technique(s)	Unobservable Inputs	Range			average(a)
	Assets		Liabilities
	(millions)
Forward contracts – power	$	294	$	(450)	Discounted cash flow	Forward price (per MWh)	$(4)	—	$223	$43
Forward contracts – gas	206		(180)		Discounted cash flow	Forward price (per MMBtu)	$2	—	$23	$4
Forward contracts – congestion	23		(8)		Discounted cash flow	Forward price (per MWh)	$(12)	—	$21	$—
Options – power	88		(11)		Option models	Implied correlations	37%	—	87%	53%
						Implied volatilities	18%	—	242%	61%
Options – primarily gas	1,076		(966)		Option models	Implied correlations	37%	—	87%	53%
						Implied volatilities	18%	—	242%	43%
Full requirements and unit contingent contracts	35		(1,285)		Discounted cash flow	Forward price (per MWh)	$3	—	$386	$78
						Customer migration rate(b)	—%	—	56%	2%
Forward contracts – other	246		(140)
Total	$	1,968	$	(3,040)

———————————————

(a)Unobservable inputs were weighted by volume.

(b)Applies only to full requirements contracts.

Fair Value, by Balance Sheet Grouping

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:


	March 31, 2022					December 31, 2021
	Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(millions)
NEE:
Special use funds(a)	$	894	$	894		$	906	$	907
Other investments(b)	$	180	$	180		$	102	$	102
Long-term debt, including current portion	$	56,538	$	57,304	(c)	$	52,745	$	57,290	(c)
FPL:
Special use funds(a)	$	658	$	659		$	672	$	672
Long-term debt, including current portion	$	20,993	$	22,061	(c)	$	18,510	$	21,379	(c)

———————————————

(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 condensed consolidated balance sheets.

(c)At March 31, 2022 and December 31, 2021, substantially all is Level 2 for NEE and FPL.

Unrealized Gains (Losses) Recognized On Equity Securities Still Held at The Reporting Date

Unrealized gains (losses) recognized on equity securities held at March 31, 2022 and 2021 are as follows:


		NEE					FPL
	Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2022		2021
		(millions)
Unrealized gains (losses)		$	(299)	$	247		$	(190)	$	161

Gains and Losses on Available-for-sale Debt Securities

Realized gains and losses and proceeds from the sale or maturity of available for sale debt securities are as follows:


		NEE					FPL
	Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2022		2021
		(millions)
Realized gains		$	8	$	18		$	7	$	12
Realized losses		$	27	$	14		$	19	$	13
Proceeds from sale or maturity of securities		$	721	$	548		$	418	$	390

The unrealized gains and 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
	March 31, 2022		December 31, 2021		March 31, 2022		December 31, 2021
	(millions)
Unrealized gains	$	16	$	76	$	13	$	63
Unrealized losses(a)	$	115	$	19	$	78	$	15
Fair value	$	2,039	$	1,100	$	1,394	$	857

———————————————

(a) Unrealized losses on available for sale debt securities in an unrealized loss position for greater than twelve months at March 31, 2022 and December 31, 2021 were not material to NEE or FPL.

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details