Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

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, 2014
	Level 1		Level 2			Level 3		Netting^(a)			Total
	(millions)
Assets:
Cash equivalents:
NEE - equity securities	$	32	$	—		$	—				$	32
Special use funds:^(b)
NEE:
Equity securities	$	1,217	$	1,417	^(c)	$	—				$	2,634
U.S. Government and municipal bonds	$	520	$	191		$	—				$	711
Corporate debt securities	$	—	$	704		$	—				$	704
Mortgage-backed securities	$	—	$	493		$	—				$	493
Other debt securities	$	25	$	32		$	—				$	57
FPL:
Equity securities	$	324	$	1,237	^(c)	$	—				$	1,561
U.S. Government and municipal bonds	$	435	$	165		$	—				$	600
Corporate debt securities	$	—	$	501		$	—				$	501
Mortgage-backed securities	$	—	$	422		$	—				$	422
Other debt securities	$	25	$	20		$	—				$	45
Other investments:
NEE:
Equity securities	$	35	$	1		$	—				$	36
Debt securities	$	5	$	170		$	—				$	175
Derivatives:
NEE:
Commodity contracts	$	1,801	$	3,177		$	1,167	$	(4,196	)	$	1,949	^(d)
Interest rate contracts	$	—	$	35		$	—	$	15		$	50	^(d)
FPL - commodity contracts	$	—	$	2		$	6	$	(1	)	$	7	^(d)
Liabilities:
Derivatives:
NEE:
Commodity contracts	$	1,720	$	3,150		$	420	$	(3,932	)	$	1,358	^(d)
Interest rate contracts	$	—	$	126		$	125	$	15		$	266	^(d)
Foreign currency swaps	$	—	$	131		$	—	$	—		$	131	^(d)
FPL - commodity contracts	$	—	$	370		$	1	$	(1	)	$	370	^(d)

______________________

(a)

Includes the effect of the contractual ability to settle contracts under master netting arrangements and 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)	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 the Carrying Amount 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)	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, 2013
	Level 1		Level 2			Level 3		Netting^(a)			Total
	(millions)
Assets:
Cash equivalents:
NEE - equity securities	$	20	$	—		$	—				$	20
Special use funds:^(b)
NEE:
Equity securities	$	1,170	$	1,336	^(c)	$	—				$	2,506
U.S. Government and municipal bonds	$	647	$	180		$	—				$	827
Corporate debt securities	$	—	$	597		$	—				$	597
Mortgage-backed securities	$	—	$	479		$	—				$	479
Other debt securities	$	16	$	44		$	—				$	60
FPL:
Equity securities	$	291	$	1,176	^(c)	$	—				$	1,467
U.S. Government and municipal bonds	$	584	$	154		$	—				$	738
Corporate debt securities	$	—	$	421		$	—				$	421
Mortgage-backed securities	$	—	$	401		$	—				$	401
Other debt securities	$	16	$	30		$	—				$	46
Other investments:
NEE:
Equity securities	$	51	$	—		$	—				$	51
Debt securities	$	11	$	107		$	—				$	118
Derivatives:
NEE:
Commodity contracts	$	1,368	$	2,106		$	1,069	$	(2,972	)	$	1,571	^(d)
Interest rate contracts	$	—	$	90		$	—	$	—		$	90	^(d)
FPL - commodity contracts	$	—	$	53		$	2	$	(7	)	$	48	^(d)
Liabilities:
Derivatives:
NEE:
Commodity contracts	$	1,285	$	1,994		$	354	$	(2,693	)	$	940	^(d)
Interest rate contracts	$	—	$	127		$	93	$	—		$	220	^(d)
Foreign currency swaps	$	—	$	151		$	—	$	—		$	151	^(d)
FPL - commodity contracts	$	—	$	7		$	2	$	(7	)	$	2	^(d)

______________________

(a)


(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 the Carrying Amount below.


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


(d)	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,
	2014						2013						2012
	NEE			FPL			NEE			FPL			NEE			FPL
	(millions)
Fair value of net derivatives based on significant unobservable inputs at December 31 of prior year	$	622		$	—		$	566		$	2		$	486		$	4
Realized and unrealized gains (losses):
Included in earnings^(a)	(77		)	—			299			—			218			—
Included in other comprehensive income	18			—			—			—			—			—
Included in regulatory assets and liabilities	7			7			—			—			5			5
Purchases	55			—			101			—			273			(7		)
Settlements	194			(2		)	(55		)	(2		)	(181		)	—
Issuances	(122		)	—			(173		)	—			(243		)	—
Transfers in^(b)	80			—			(120		)	—			20			—
Transfers out^(b)	(155		)	—			4			—			(12		)	—
Fair value of net derivatives based on significant unobservable inputs at December 31	$	622		$	5		$	622		$	—		$	566		$	2
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)	$	248		$	—		$	329		$	—		$	152		$	—

______________________

(a)

For the year ended 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. For the year December 31, 2013, $302 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 ended December 31, 2012, $220 million of realized and unrealized gains are reflected in the 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, in 2013, a significant credit valuation adjustment. 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 years ended December 31, 2014 and 2013, $328 million and $330 million of 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, 2012, $157 million of unrealized gains are reflected in the consolidated statements of income in operating revenues and the balance is reflected in fuel, purchased power and interchange.

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, 2014 are as follows:



Transaction Type	Fair Value at December 31, 2014				Valuation Technique(s)	Significant Unobservable Inputs	Range
	Assets		Liabilities
	(millions)
Forward contracts - power	$	487	$	97	Discounted cash flow	Forward price (per MWh)	$6	—	$119
Forward contracts - gas	74		55		Discounted cash flow	Forward price (per MMBtu)	$1	—	$6
Forward contracts - other commodity related	44		41		Discounted cash flow	Forward price (various)	$—	—	$13
Options - power	114		92		Option models	Implied correlations	(4)%	—	98%
						Implied volatilities	1%	—	166%
Options - gas	54		98		Option models	Implied correlations	(4)%	—	98%
						Implied volatilities	1%	—	146%
Full requirements and unit contingent contracts	394		37		Discounted cash flow	Forward price (per MWh)	$(16)	—	$184
						Customer migration rate^(a)	—%	—	20%
Total	$	1,167	$	420

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(a)	Applies only to full requirements contracts.

Fair Value, by Balance Sheet Grouping

Fair Value of Financial Instruments Recorded at the Carrying Amount - The carrying amounts of cash equivalents and commercial paper approximate their fair values. The carrying amounts and estimated fair values of other financial instruments, excluding those recorded at fair value and disclosed above in Recurring Fair Value Measurements, are as follows:



	December 31, 2014					December 31, 2013
	Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(millions)
NEE:
Special use funds^(a)	$	567	$	567		$	311	$	311
Other investments - primarily notes receivable	$	525	$	679	^(b)	$	531	$	627	^(b)
Long-term debt, including current maturities	$	27,876	$	30,337	^(c)	$	27,728	$	28,612	^(c)
FPL:
Special use funds^(a)	$	395	$	395		$	200	$	200
Long-term debt, including current maturities	$	9,473	$	11,105	^(c)	$	8,829	$	9,451	^(c)

______________________


(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 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. As of December 31, 2014 and 2013, NEE had no notes receivable reported in non-accrual status.

(c)

As of December 31, 2014 and 2013, for NEE, approximately $19,973 million and $17,921 million, respectively, is estimated using quoted market prices for the same or similar issues (Level 2); the balance is estimated using a discounted cash flow valuation technique, considering the current credit spread of the debtor (Level 3). For FPL, 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,
	2014		2013		2012		2014		2013		2012
	(millions)
Realized gains	$	211	$	246	$	252	$	120	$	182	$	98
Realized losses	$	115	$	88	$	67	$	94	$	59	$	46
Proceeds from sale or maturity of securities	$	4,092	$	4,190	$	5,028	$	3,349	$	3,342	$	3,790

The unrealized gains on available for sale securities are as follows:



	NEE				FPL
	December 31,				December 31,
	2014		2013		2014		2013
			(millions)
Equity securities	$	1,267	$	1,125	$	896	$	777
Debt securities	$	66	$	42	$	54	$	36

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,
	2014		2013		2014		2013
			(millions)
Unrealized losses^(a)	$	7	$	32	$	5	$	25
Fair value	$	542	$	1,069	$	434	$	844

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(a)	Unrealized losses on available for sale debt securities for securities in an unrealized loss position for greater than twelve months at December 31, 2014 and 2013 were not material to NEE or FPL.

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References+ Details

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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