Fair Value Measurement (Tables)
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9 Months Ended |
Sep. 30, 2020 |
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| Fair Value Disclosures [Abstract] |
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| Financial assets and liabilities and other 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: | | | | | | | | | | | | | | | | | | | | | | | September 30, 2020 | | | Level 1 | | Level 2 | | Level 3 | | Netting(a) | | Total | | | (millions) | | Assets: | | | | | | | | | | | Cash equivalents and restricted cash equivalents:(b) | | | | | | | | | | | NEE - equity securities | $ | 1,804 |
| | $ | — |
| | $ | — |
| | | | $ | 1,804 |
| | FPL - equity securities | $ | 191 |
| | $ | — |
| | $ | — |
| | | | $ | 191 |
| | Special use funds:(c) | | | | | | | | | | | NEE: | | | | | | | | | | | Equity securities | $ | 1,994 |
| | $ | 2,187 |
| (d) | $ | — |
| | | | $ | 4,181 |
| | U.S. Government and municipal bonds | $ | 522 |
| | $ | 157 |
| | $ | — |
| | | | $ | 679 |
| | Corporate debt securities | $ | 1 |
| | $ | 850 |
| | $ | — |
| | | | $ | 851 |
| | Mortgage-backed securities | $ | — |
| | $ | 440 |
| | $ | — |
| | | | $ | 440 |
| | Other debt securities | $ | — |
| | $ | 112 |
| | $ | — |
| | | | $ | 112 |
| | FPL: | | | | | | | | | | | Equity securities | $ | 680 |
| | $ | 1,983 |
| (d) | $ | — |
| | | | $ | 2,663 |
| | U.S. Government and municipal bonds | $ | 405 |
| | $ | 103 |
| | $ | — |
| | | | $ | 508 |
| | Corporate debt securities | $ | — |
| | $ | 600 |
| | $ | — |
| | | | $ | 600 |
| | Mortgage-backed securities | $ | — |
| | $ | 348 |
| | $ | — |
| | | | $ | 348 |
| | Other debt securities | $ | — |
| | $ | 107 |
| | $ | — |
| | | | $ | 107 |
| | Other investments:(e) | | | | | | | | | | | NEE: | | | | | | | | | | | Equity securities | $ | 61 |
| | $ | — |
| | $ | — |
| | | | $ | 61 |
| | Debt securities | $ | 93 |
| | $ | 109 |
| | $ | — |
| | | | $ | 202 |
| | Derivatives: | | | | | | | | | | | NEE: | | | | | | | | | | | Commodity contracts | $ | 1,029 |
| | $ | 1,796 |
| | $ | 1,610 |
| | $ | (2,396 | ) | | $ | 2,039 |
| (f) | Interest rate contracts | $ | — |
| | $ | 33 |
| | $ | — |
| | $ | (28 | ) | | $ | 5 |
| (f) | Foreign currency contracts | $ | — |
| | $ | 15 |
| | $ | — |
| | $ | 4 |
| | $ | 19 |
| (f) | FPL - commodity contracts | $ | — |
| | $ | 2 |
| | $ | 2 |
| | $ | (2 | ) | | $ | 2 |
| (f) | Liabilities: | | | | | | | | | | | Derivatives: | | | | | | | | | | | NEE: | | | | | | | | | | | Commodity contracts | $ | 1,027 |
| | $ | 1,328 |
| | $ | 440 |
| | $ | (2,252 | ) | | $ | 543 |
| (f) | Interest rate contracts | $ | — |
| | $ | 1,304 |
| | $ | 20 |
| | $ | (28 | ) | | $ | 1,296 |
| (f) | Foreign currency contracts | $ | — |
| | $ | 47 |
| | $ | — |
| | $ | 4 |
| | $ | 51 |
| (f) | FPL - commodity contracts | $ | — |
| | $ | 5 |
| | $ | 8 |
| | $ | (2 | ) | | $ | 11 |
| (f) |
| | (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 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) | Includes restricted cash equivalents of approximately $231 million ($73 million for FPL) in current other assets and $82 million ($41 million for FPL) in noncurrent other assets on the condensed 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) | Included in noncurrent other assets on NEE's condensed consolidated balance sheet. |
| | (f) | See Note 4 - Fair Value of Derivative Instruments for a reconciliation of net derivatives to NEE's and FPL's condensed consolidated balance sheets. |
| | | | | | | | | | | | | | | | | | | | | | | December 31, 2019 | | | Level 1 | | Level 2 | | Level 3 | | Netting(a) | | Total | | | (millions) | | Assets: | | | | | | | | | | | Cash equivalents and restricted cash equivalents:(b) | | | | | | | | | | | NEE - equity securities | $ | 363 |
| | $ | — |
| | $ | — |
| | | | $ | 363 |
| | FPL - equity securities | $ | 156 |
| | $ | — |
| | $ | — |
| | | | $ | 156 |
| | Special use funds:(c) | | | | | | | | | | | NEE: | | | | | | | | | | | Equity securities | $ | 1,875 |
| | $ | 2,088 |
| (d) | $ | — |
| | | | $ | 3,963 |
| | U.S. Government and municipal bonds | $ | 567 |
| | $ | 150 |
| | $ | — |
| | | | $ | 717 |
| | Corporate debt securities | $ | — |
| | $ | 748 |
| | $ | — |
| | | | $ | 748 |
| | Mortgage-backed securities | $ | — |
| | $ | 517 |
| | $ | — |
| | | | $ | 517 |
| | Other debt securities | $ | — |
| | $ | 117 |
| | $ | — |
| | | | $ | 117 |
| | FPL: | | | | | | | | | | | Equity securities | $ | 596 |
| | $ | 1,895 |
| (d) | $ | — |
| | | | $ | 2,491 |
| | U.S. Government and municipal bonds | $ | 429 |
| | $ | 106 |
| | $ | — |
| | | | $ | 535 |
| | Corporate debt securities | $ | — |
| | $ | 533 |
| | $ | — |
| | | | $ | 533 |
| | Mortgage-backed securities | $ | — |
| | $ | 395 |
| | $ | — |
| | | | $ | 395 |
| | Other debt securities | $ | — |
| | $ | 111 |
| | $ | — |
| | | | $ | 111 |
| | Other investments:(e) | | | | | | | | | | | NEE: | | | | | | | | | | | Equity securities | $ | 34 |
| | $ | 12 |
| | $ | — |
| | | | $ | 46 |
| | Debt securities | $ | 82 |
| | $ | 69 |
| | $ | — |
| | | | $ | 151 |
| | Derivatives: | | | | | | | | | | | NEE: | | | | | | | | | | | Commodity contracts | $ | 1,229 |
| | $ | 2,082 |
| | $ | 1,739 |
| | $ | (2,700 | ) | | $ | 2,350 |
| (f) | Interest rate contracts | $ | — |
| | $ | 24 |
| | $ | 2 |
| | $ | (17 | ) | | $ | 9 |
| (f) | Foreign currency contracts | $ | — |
| | $ | 26 |
| | $ | — |
| | $ | 1 |
| | $ | 27 |
| (f) | FPL - commodity contracts | $ | — |
| | $ | 3 |
| | $ | 1 |
| | $ | (1 | ) | | $ | 3 |
| (f) | Liabilities: | | | | | | | | | | | Derivatives: | | | | | | | | | | | NEE: | | | | | | | | | | | Commodity contracts | $ | 1,365 |
| | $ | 1,446 |
| | $ | 390 |
| | $ | (2,625 | ) | | $ | 576 |
| (f) | Interest rate contracts | $ | — |
| | $ | 598 |
| | $ | 144 |
| | $ | (17 | ) | | $ | 725 |
| (f) | Foreign currency contracts | $ | — |
| | $ | 38 |
| | $ | — |
| | $ | 1 |
| | $ | 39 |
| (f) | FPL - commodity contracts | $ | — |
| | $ | 5 |
| | $ | 9 |
| | $ | (1 | ) | | $ | 13 |
| (f) |
| | (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 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) | Includes restricted cash equivalents of approximately $60 million ($54 million for FPL) in current other assets and $64 million ($64 million for FPL) in noncurrent other assets on the condensed 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) | Included in noncurrent other assets on NEE's condensed consolidated balance sheet. |
(f) See Note 4 - Fair Value of Derivative Instruments for a reconciliation of net derivatives to NEE's and FPL's condensed consolidated balance sheets.
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| 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 September 30, 2020 are as follows: | | | | | | | | | | | | | | | | | | | | | Fair Value at | | Valuation | | Significant | | | | | Weighted- | Transaction Type | | September 30, 2020 | | Technique(s) | | Unobservable Inputs | | Range | average(a) | | | Assets | | Liabilities | | | | | | | | | | | | (millions) | | | | | | | | | | Forward contracts - power | | $ | 754 |
| | $ | 106 |
| | Discounted cash flow | | Forward price (per MWh) | | $2 | — | $157 | $28 | Forward contracts - gas | | 270 |
| | 40 |
| | Discounted cash flow | | Forward price (per MMBtu) | | $— | — | $8 | $3 | Forward contracts - congestion | | 25 |
| | 5 |
| | Discounted cash flow | | Forward price (per MWh) | | $(5) | — | $33 | $— | Options - power | | 35 |
| | 17 |
| | Option models | | Implied correlations | | 40% | — | 85% | 55% | | | | | | | | | Implied volatilities | | 5% | — | 152% | 48% | Options - primarily gas | | 198 |
| | 203 |
| | Option models | | Implied correlations | | 40% | — | 100% | 57% | | | | | | | | | Implied volatilities | | 16% | — | 270% | 42% | Full requirements and unit contingent contracts | | 301 |
| | 56 |
| | Discounted cash flow | | Forward price (per MWh) | | $6 | — | $382 | $48 | | | | | | | | | Customer migration rate(b) | | —% | — | 122% | 2% | Forward contracts - other | | 27 |
| | 13 |
| | | | | | | | | | Total | | $ | 1,610 |
| | $ | 440 |
| | | | | | | | | |
——————————————— | | (a) | Unobservable inputs were weighted by volume. |
(b) Applies only to full requirements contracts.
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| Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation |
The sensitivity of NEE's fair value measurements to increases (decreases) in the significant unobservable inputs is as follows: | | | | | | Significant Unobservable Input | | Position | | Impact on Fair Value Measurement | Forward price | | Purchase power/gas | | Increase (decrease) | | | Sell power/gas | | Decrease (increase) | Implied correlations | | Purchase option | | Decrease (increase) | | | Sell option | | Increase (decrease) | Implied volatilities | | Purchase option | | Increase (decrease) | | | Sell option | | Decrease (increase) | Customer migration rate | | Sell power(a) | | Decrease (increase) |
——————————————— | | (a) | Assumes the contract is in a gain position. |
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| Reconciliation of changes in the fair value 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 September 30, | | 2020 | | 2019 | | NEE | | FPL | | NEE | | FPL | | (millions) | Fair value of net derivatives based on significant unobservable inputs at June 30 | $ | 1,305 |
| | $ | (6 | ) | | $ | 1,231 |
| | $ | (13 | ) | Realized and unrealized gains (losses): | |
| | |
| | |
| | |
| Included in earnings(a) | (55 | ) | | — |
| | (29 | ) | | — |
| Included in other comprehensive income (loss)(b) | — |
| | — |
| | 6 |
| | — |
| Included in regulatory assets and liabilities | (1 | ) | | (1 | ) | | 2 |
| | 2 |
| Purchases | 37 |
| | — |
| | 27 |
| | — |
| Settlements | (108 | ) | | 1 |
| | (146 | ) | | 1 |
| Issuances | (26 | ) | | — |
| | (13 | ) | | — |
| Transfers out(c) | (2 | ) | | — |
| | (27 | ) | | — |
| Fair value of net derivatives based on significant unobservable inputs at September 30 | $ | 1,150 |
| | $ | (6 | ) | | $ | 1,051 |
| | $ | (10 | ) | Gains (losses) included in earnings attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date(d) | $ | (46 | ) | | $ | — |
| | $ | 53 |
| | $ | — |
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——————————————— | | (a) | For the three months ended September 30, 2020 and 2019, realized and unrealized losses of approximately $55 million and $23 million, respectively, are included in the condensed consolidated statements of income in operating revenues and the balance is included in interest expense. |
| | (b) | Included in net unrealized gains (losses) on foreign currency translation in the condensed consolidated statements of comprehensive income. |
| | (c) | Transfers from Level 3 to Level 2 were a result of increased observability of market data. |
| | (d) | For the three months ended September 30, 2020 and 2019, unrealized gains (losses) of approximately $(46) million and $61 million, respectively, are included in the condensed consolidated statements of income in operating revenues and the balance is included in interest expense. |
| | | | | | | | | | | | | | | | | | Nine Months Ended September 30, | | 2020 | | 2019 | | NEE | | FPL | | NEE | | FPL | | (millions) | Fair value of net derivatives based on significant unobservable inputs at December 31 of prior period | $ | 1,207 |
| | $ | (8 | ) | | $ | 647 |
| | $ | (36 | ) | Realized and unrealized gains (losses): | |
| | |
| | |
| | |
| Included in earnings(a) | 294 |
| | — |
| | 663 |
| | — |
| Included in other comprehensive income (loss)(b) | 1 |
| | — |
| | 7 |
| | — |
| Included in regulatory assets and liabilities | (3 | ) | | (3 | ) | | 1 |
| | 1 |
| Purchases | 157 |
| | — |
| | 94 |
| | — |
| Sales(c) | 114 |
| | — |
| | — |
| | — |
| Settlements | (490 | ) | | 5 |
| | (265 | ) | | 23 |
| Issuances | (98 | ) | | — |
| | (64 | ) | | — |
| Transfers out(d) | (32 | ) | | — |
| | (32 | ) | | 2 |
| Fair value of net derivatives based on significant unobservable inputs at September 30 | $ | 1,150 |
| | $ | (6 | ) | | $ | 1,051 |
| | $ | (10 | ) | Gains (losses) included in earnings attributable to the change in unrealized gains (losses) relating to derivatives held at the reporting date(e) | $ | 79 |
| | $ | — |
| | $ | 476 |
| | $ | — |
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——————————————— | | (a) | For the nine months ended September 30, 2020 and 2019, realized and unrealized gains of approximately $314 million and $680 million, respectively, are included in the condensed consolidated statements of income in operating revenues and the balance is included in interest expense. |
| | (b) | Included in net unrealized gains (losses) on foreign currency translation in the condensed consolidated statements of comprehensive income. |
| | (c) | See Note 11 - Disposal of Businesses. |
| | (d) | Transfers from Level 3 to Level 2 were a result of increased observability of market data. |
(e) For the nine months ended September 30, 2020 and 2019, unrealized gains of approximately $90 million and $493 million, respectively, are included in the condensed consolidated statements of income in operating revenues and the balance is included in interest expense.
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| 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: | | | | | | | | | | | | | | | | | | | September 30, 2020 | | December 31, 2019 | | | Carrying Amount | | Estimated Fair Value | | Carrying Amount | | Estimated Fair Value | | | (millions) | | NEE: | | | Special use funds(a) | $ | 912 |
| | $ | 912 |
| | $ | 892 |
| | $ | 891 |
| | Other investments(b) | $ | 25 |
| | $ | 25 |
| | $ | 30 |
| | $ | 30 |
| | Long-term debt, including current portion | $ | 47,838 |
| | $ | 52,527 |
| (c) | $ | 39,667 |
| (d) | $ | 42,928 |
| (c) (d) | FPL: | | | | | | | | | Special use funds(a) | $ | 719 |
| | $ | 718 |
| | $ | 706 |
| | $ | 705 |
| | Long-term debt, including current portion | $ | 15,809 |
| | $ | 19,415 |
| (c) | $ | 14,161 |
| | $ | 16,448 |
| (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 September 30, 2020 and December 31, 2019, substantially all is Level 2 for NEE and all is Level 2 for FPL. |
| | (d) | Excludes debt totaling approximately $463 million classified as held for sale, which is included in current other liabilities on NEE's condensed consolidated balance sheet at December 31, 2019, for which the carrying amount approximated fair value. See Note 11 - Disposal of Businesses. |
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| Unrealized Gains (Losses) Recognized On Equity Securities Still Held at The Reporting Date |
Unrealized gains (losses) recognized on equity securities held at September 30, 2020 and 2019 are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NEE | | FPL | | Three Months Ended September 30, | | Nine Months Ended September 30, | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 | | (millions) | Unrealized gains (losses) | $ | 223 |
| | $ | 21 |
| | $ | 65 |
| | $ | 500 |
| | $ | 129 |
| | $ | 18 |
| | $ | 50 |
| | $ | 327 |
|
|
| 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 September 30, | | Nine Months Ended September 30, | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 | | (millions) | Realized gains | $ | 30 |
| | $ | 21 |
| | $ | 86 |
| | $ | 47 |
| | $ | 21 |
| | $ | 15 |
| | $ | 66 |
| | $ | 30 |
| Realized losses | $ | 17 |
| | $ | 14 |
| | $ | 50 |
| | $ | 34 |
| | $ | 10 |
| | $ | 11 |
| | $ | 38 |
| | $ | 20 |
| Proceeds from sale or maturity of securities | $ | 555 |
| | $ | 612 |
| | $ | 2,046 |
| | $ | 2,087 |
| | $ | 475 |
| | $ | 489 |
| | $ | 1,747 |
| | $ | 1,717 |
|
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 | | September 30, 2020 | | December 31, 2019 | | September 30, 2020 | | December 31, 2019 | | (millions) | Unrealized gains | $ | 120 |
| | $ | 75 |
| | $ | 92 |
| | $ | 58 |
| Unrealized losses(a) | $ | 23 |
| | $ | 7 |
| | $ | 21 |
| | $ | 7 |
| Fair value | $ | 314 |
| | $ | 314 |
| | $ | 239 |
| | $ | 240 |
|
——————————————— (a) Unrealized losses on available for sale debt securities in an unrealized loss position for greater than twelve months at September 30, 2020 and December 31, 2019 were not material to NEE or FPL.
|