0000753308 2007-12-31 0000753308 2008-06-30 0000753308 2008-09-30 0000753308 2008-01-01 2008-09-30 0000753308 2008-12-31 0000753308 2009-07-01 2009-09-30 0000753308 2008-07-01 2008-09-30 0000753308 2009-01-01 2009-09-30 0000753308 2009-09-30 0000753308 2008-01-01 2008-12-31 iso4217:USD iso4217:USD xbrli:shares xbrli:shares No <div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Arial, sans-serif">9.&#160;&#160;Debt</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">As of October&#160;29, 2009, debt issuances and borrowings by subsidiaries of FPL Group during 2009 were as follows:</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div> <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; 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TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">In May 2009, FPL Group sold $350 million of equity units (initially consisting of Corporate Units).&#160;&#160;Each equity unit has a stated amount of $50 and consists of a purchase contract issued by FPL Group and, initially, a 1/20, or 5%, undivided beneficial ownership interest in $1,000 principal amount of a Series C Debenture due June&#160;1, 2014 issued by FPL Group Capital (see table above).&#160;&#160;Total annual distributions on the equity units will be at the rate of 8.375%, consisting of interest on the debentures (3.60% per year) and payments under the stock purchase contracts (4.775% per year).&#160;&#160;The interest rate on the debentures is expected to be reset on or after December&# 160;1, 2011.&#160;&#160;Each stock purchase contract will require the holder to purchase FPL Group common stock for cash, which can be satisfied from proceeds raised from remarketing the FPL Group Capital debentures, based on a price per share range of $55.67 to $66.80 no later than the settlement date of June&#160;1, 2012.&#160;&#160;The debentures are fully and unconditionally guaranteed by FPL Group.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">In 2008, FPL entered into a reclaimed water agreement with Palm Beach County, Florida (PBC) to provide FPL's West County Energy Center (WCEC) with reclaimed water for cooling purposes beginning in January 2011.&#160;&#160;Under the reclaimed water agreement, FPL is to constru ct a reclaimed water system, including modifications to an existing treatment plant and a water pipeline, that PBC will legally own and operate.&#160;&#160;The reclaimed water agreement also requires PBC to issue bonds for the purpose of paying the costs associated with the construction of the reclaimed water system, including reimbursing FPL for costs it incurred prior to issuance of the bonds.&#160;&#160;In July 2009, PBC issued approximately $68 million principal amount of Palm Beach County, Florida Water and Sewer Revenue Bonds, Series 2009 with coupon rates ranging from 4.000% to 5.250% and maturity dates ranging from 2011 to 2040.&#160;&#160;Under the reclaimed water agreement, FPL will pay PBC an operating fee for the reclaimed water delivered which will be used by PBC to, among other things, service the principal of, and interest on, the bonds.&#160;&#160;The portion of the operating fee related to PBC's servicing principal of, and interest on, the bonds w ill be paid by FPL annually as to principal and semi-annually as to interest, beginning October 2011, until final maturity of the bonds.&#160;&#160;FPL does not have a direct obligation to the bondholders; 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FONT-STYLE: italic">FPL</font> - FPL is considered the primary beneficiary of, and therefore consolidates, a variable interest entity (VIE) from which it leases nuclear fuel for its nuclear units.&#160;&#160;FPL is considered the primary beneficiary of this VIE because, in the case of default by the VIE on its de bt, FPL would be required to purchase the VIE's nuclear fuel and because FPL guarantees the VIE's debt.&#160;&#160;The VIE has issued commercial paper to fund the procurement of nuclear fuel and FPL has provided a $600 million guarantee to support the commercial paper program.&#160;&#160;Under certain lease termination circumstances, the associated debt, which consists primarily of commercial paper (approximately $392 million and $347 million at September&#160;30, 2009 and December&#160;31, 2008, respectively) would become due.&#160;&#160;The consolidated assets of the VIE consist primarily of nuclear fuel, which had a net carrying value of approximately $392 million and $338 million at September&#160;30, 2009 and December&#160;31, 2008, respectively.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="just ify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">FPL is considered the primary beneficiary of, and therefore consolidates, a VIE that is a wholly-owned bankruptcy remote special purpose subsidiary that it formed in 2007 for the sole purpose of issuing storm-recovery bonds pursuant to the securitization provisions of the Florida Statutes and a Florida Public Service Commission (FPSC) financing order.&#160;&#160;Four hurricanes in 2005 and three hurricanes in 2004 caused major damage in parts of FPL's service territory.&#160;&#160;Storm restoration costs incurred by FPL during 2005 and 2004 exceeded the amount in FPL's funded storm and property insurance reserve, resulting in a storm reserve deficiency.&#160;&#160;In 2007, the VIE issued $652 million aggregate principal amount of senior secured bonds (storm-recovery bonds), primarily for the after-tax equivalent of the total of FPL's unrecovered balance of the 2004 storm restoration costs, the 2005 storm restoration costs and approximately $200 million to reestablish FPL's storm and property insurance reserve.&#160;&#160;The storm-recovery bonds outstanding at September&#160;30, 2009 and December&#160;31, 2008 were approximately $573 million and $611 million, respectively, which are included in long-term debt and current maturities of long-term debt on FPL Group's and FPL's condensed consolidated balance sheets.&#160;&#160;In connection with this financing, net proceeds, after debt issuance costs, to the VIE (approximately $644 million) were used to acquire the storm-recovery property, which includes the right to impose, collect and receive a storm-recovery charge from all customers receiving electric transmission or distribution service from FPL under rate schedules approved by the FPSC or under special contracts, certain other rights and interests that arise under the financing order issued by the FPSC and certain other collateral pledged by the V IE that issued the bonds.&#160;&#160;The storm-recovery bonds are payable only from and secured by the storm-recovery property.&#160;&#160;The consolidated assets of the VIE were approximately $581 million and $628 million at September&#160;30, 2009 and December&#160;31, 2008, respectively, and consisted primarily of storm-recovery property, which is included in securitized storm-recovery costs on FPL Group's and FPL's balance sheets.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">FPL identified two potential VIEs, both of which are considered qualifying facilities as defined by the Public Utility Regulatory Policies Act of 1978, as amended (PURPA).&#160;&#160;PURPA requires FPL to purchase the electricity output of the projects.&#160;&#160;FPL entered into a power purchase agreement (PPA) with one of the projects in 1990 to purchase substantially all of the project's electrical output through 2024.&#160;&#160;For each mwh provided, FPL pays a per mwh price (energy payment) based upon FPL's avoided cost, which was determined at the time the PPA was executed, and was based on the cost of avoiding the construction and operation of a coal unit.&#160;&#160;The energy component is primarily based on the cost of&#160;coal at an FPL jointly-owned coal-fired facility.&#160;&#160;The project has a capacity of 250 megawatts (mw).&#160;&#160;After making exhaustive efforts, FPL was unable to obtain the information from the project necessary to determine whether the project is a VIE or whether FPL is the primary beneficiary of the project.&#160;&#160;The PPA with the project contains no provision which legally obligates the project to release this information to FPL.&a mp;#160;&#160;The energy payments paid by FPL will fluctuate as coal prices change.&#160;&#160;This fluctuation does not expose FPL to losses since the energy payments paid by FPL to the project are passed on to FPL's customers through the fuel clause as approved by the FPSC.&#160;&#160;Notwithstanding the fact that FPL's energy payments are recovered through the fuel clause, if the project was determined to be a VIE, the absorption of some of the project's fuel price variability might cause FPL to be considered the primary beneficiary.&#160;&#160;During the three months ended September&#160;30, 2009 and 2008, FPL purchased 458,727 mwh and 461,226 mwh, respectively, from the project at a total cost of approximately $47 million and $40 million, respectively.&#160;&#160;During the nine months ended September&#160;30, 2009 and 2008, FPL purchased 1,267,556 mwh and 1,311,674 mwh, respectively, from the project at a total cost of approximately $130 million a nd $118 million, respectively.&#160;&#160;FPL will continue to make exhaustive efforts to obtain the necessary information from the project in order to determine if it is a VIE and, if so, whether FPL is the primary beneficiary.&#160;&#160;FPL also entered into a PPA with a 330 mw coal-fired cogeneration facility (the Facility) in 1995 to purchase substantially all of the Facility's electrical output through 2025.&#160;&#160;During the fourth quarter of 2007, a change in ownership of the Facility occurred, triggering the need to reevaluate whether the Facility is still a VIE and, if so, whether FPL is the Facility's primary beneficiary.&#160;&#160;After making exhaustive efforts, FPL was unable to obtain the information necessary to perform this reevaluation.&#160;&#160;The PPA with the Facility contains no provisions which legally obligate the Facility to release this information to FPL.&#160;&#160;During the three months ended September&#160; 30, 2009 and 2008, FPL purchased 448,740 mwh and 682,514 mwh, respectively, from the Facility at a total cost of approximately $54 million and $56 million, respectively.&#160;&#160;During the nine months ended September&#160;30, 2009 and 2008, FPL purchased 1,275,817 mwh and 1,810,326 mwh, respectively, from the Facility at a total cost of approximately $161 million and $166 million, respectively.&#160;&#160;The PPA does not expose FPL to losses since the energy payments made by FPL to the Facility are passed on to FPL's customers through the fuel clause as approved by the FPSC.&#160;&#160;FPL will continue to make exhaustive efforts to obtain the necessary information from the Facility in order to determine if it is still a VIE and, if so, whether FPL is the Facility's primary beneficiary.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; M ARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; 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</font></td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="1%"><font style="DI SPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td colspan="2" valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td colspan="2" valign="bottom" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td colspan="2" valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width ="1%"><font style="DISPLAY: inline; 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TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">40</font></div> </td> <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">&l t;font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">-</font></div> </td> <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">-</font></div> </td> <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE : 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">-</font></div> </td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; 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TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4 %"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">555</font></div> </td> <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif">515</font&g t;</div> </td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; 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FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">In the event of a loss, the amount of insurance available might not be adequate to cover property damage and other expenses incurred.&#160;&#160;Uninsured losses and other expenses, to the extent not recovered from customers in the case of FPL, would be borne by FPL Group and FPL and could have a material adverse effect on FPL Group's and FPL's financial condition and results of operations.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-L EFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif"><font style="DISPLAY: inline; FONT-STYLE: italic">Legal Proceedings</font> - In November 1999, the Attorney General of the United States, on behalf of the U.S. Environmental Protection Agency (EPA), brought an action in the U.S. District Court for the Northern District of Georgia against Georgia Power Company and other subsidiaries of The Southern Company for certain alleged violations of the Prevention of Significant Deterioration (PSD) provisions and the New Source Performance Standards (NSPS) of the Clean Air Act.&#160;&#160;In May 2001, the EPA amended its complaint to allege, among other things, that Georgia Power Company constructed and is continuing to operate Scherer Unit No.&#160;4, in which FPL owns a 76% interest, without obtaining a PSD permit, without complying with NSPS requirements, and without applying best avai lable control technology for nitrogen oxides, sulfur dioxides and particulate matter as required by the Clean Air Act.&#160;&#160;It also alleges that unspecified major modifications have been made at Scherer Unit No.&#160;4 that require its compliance with the aforementioned Clean Air Act provisions.&#160;&#160;The EPA seeks injunctive relief requiring the installation of best available control technology and civil penalties of up to $25,000 per day for each violation from an unspecified date after June&#160;1, 1975 through January&#160;30, 1997.&#160;&#160;The EPA has made revisions to its civil penalty rule such that the maximum penalty is $27,500 per day for each violation from January&#160;31, 1997 through March&#160;15, 2004, $32,500 per day for each violation from March&#160;16, 2004 through January&#160;12, 2009 and $37,500 per day for each violation thereafter.&#160;&#160;Georgia Power Company has answered the amended complaint, asserting that it has complied with all requirements of the Clean Air Act, denying the plaintiff's allegations of liability, denying that the plaintiff is entitled to any of the relief that it seeks and raising various other defenses.&#160;&#160;In June 2001, a federal district court stayed discovery and administratively closed the case and the EPA has not yet moved to reopen the case.&#160;&#160;In April 2007, the U.S. Supreme Court in a separate unrelated case rejected an argument that a "major modification" occurs at a plant only when there is a resulting increase in the hourly rate of air emissions.&#160;&#160;Georgia Power Company has made a similar argument in defense of its case, but has other factual and legal defenses that are unaffected by the Supreme Court's decision.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0p t" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">In February 2009, Florida Municipal Power Agency (FMPA) filed a petition for review with the U.S. Court of Appeals for the District of Columbia (DC Circuit) asking the DC Circuit to reverse and remand orders of the FERC denying FMPA's request for certain credits for transmission facilities owned by FMPA members.&#160;&#160;This matter arose from a 1993 FPL filing of a comprehensive restructuring of its then-existing tariff structure.&#160;&#160;All issues in this case have been closed by the FERC.&#160;&#160;If FMPA is successful in its petition, any reduction in FPL's network service rates also would apply effective January&#160;1, 2004 to Seminole Electric Cooperative Inc. (Seminole), FPL's other network customer.&#160;&#160;FPL&#8217;s position, which was approved by the FERC, was to reduce its current network service rates by $0.04 per kilowatt (kw) per month, which resulted in FPL issuing refunds of approximately $4 million to FMPA and $2 million to Seminole in March 2008. &#160;&#160;FMPA's position is that FPL's rates should be reduced by an additional $0.20 per kw per month, which, if upheld, would result in an additional refund obligation to FMPA of approximately $26 million, and approximately $17 million to Seminole, at September&#160;30, 2009.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">In 1995 and 1996, FPL Group, through an indirect subsidiary, purchased from Adelphia Communications Corporation (Adelphia) 1,091,524 shares of Adelphia common stock and 20,000 shares of Adelphia preferred stock (convertible into 2,358,490 shares of Adelphia common stock) for an aggregate price of approximately $35,900,000.&#160;&#160;On January&#160;29, 1999, Adelphia repurchased all of these shares for $149,213,130 in cash.&#160;&#160;In June 2004, Adelphia, Adelphia Cablevision, L.L.C. and the Official Committee of Unsecured Creditors of Adelphia filed a complaint against FPL Group and its indirect subsidiary in the U.S. Bankruptcy Court, Southern District of New York.&#160;&#160;The complaint alleges that the repurchase of these shares by Adelphia was a fraudulent transfer, in that at the time of the transaction Adelphia (i) was insolvent or was rendered insolvent, (ii) did not receive reasonably equivalent value in exchange for the cash it paid, and (iii) was engaged or about to engage in a business or transaction for which any property remaining with Adelphia had unreasonably small capital.&#160;&#160;The complaint seeks the recovery for the benefit of Adelphia's bankruptcy estate of the cash paid for the repurchased shares, plus interest .&#160;&#160;FPL Group has filed an answer to the complaint.&#160;&#160;FPL Group believes that the complaint is without merit because, among other reasons, Adelphia will be unable to demonstrate that (i) Adelphia's repurchase of shares from FPL Group, which repurchase was at the market value for those shares, was not for reasonably equivalent value, (ii) Adelphia was insolvent at the time of the repurchase, or (iii) the repurchase left Adelphia with unreasonably small capital.&#160;&#160;The case is in discovery and has been scheduled for trial in June 2011.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">In October&#160;2004, TXU Portfolio Management Company (TXU) served FPL Energy Pecos Wind I, LP, FPL Energy Pecos Win d I GP, LLC, FPL Energy Pecos Wind II, LP, FPL Energy Pecos Wind II GP, LLC and Indian Mesa Wind Farm, LP (NextEra Energy Resources Affiliates) as defendants in a civil action filed in the District Court in Dallas County, Texas.&#160;&#160;FPL Energy, LLC, now known as NextEra Energy Resources, was added as a defendant in 2005.&#160;&#160;The petition alleged that the NextEra Energy Resources Affiliates had a contractual obligation to produce and sell to TXU a minimum quantity of renewable energy credits each year and that the NextEra Energy Resources Affiliates failed to meet this obligation.&#160;&#160;The plaintiff asserted claims for breach of contract and declaratory judgment and sought damages of approximately $34 million.&#160;&#160;The NextEra Energy Resources Affiliates filed their answer and counterclaim in November&#160;2004, denying the allegations.&#160;&#160;The counterclaim, as amended, asserted claims for conversion, breach of fiduciary duty, breach of warranty, conspiracy, breach of contract and fraud and sought termination of the contract and damages.&#160;&#160;Following a jury trial in June&#160;2007, among other findings, both TXU and the NextEra Energy Resources Affiliates were found to have breached the contract.&#160;&#160;In August 2008, the judge issued a final judgment pursuant to which the contract is not terminated and neither party will recover any damages.&#160;&#160;In November 2008, TXU appealed the final judgment to the Fifth District Court of Appeals in Dallas, Texas.</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">FPL Group and FPL are vigorously defending, and believe that they or their affiliates have meritorious defenses to, the l awsuits described above.&#160;&#160;In addition to the legal proceedings discussed above, FPL Group and its subsidiaries, including FPL, are involved in other legal and regulatory proceedings, actions and claims in the ordinary course of their businesses.&#160;&#160;Generating plants in which FPL Group or FPL have an ownership interest are also involved in legal and regulatory proceedings, actions and claims, the liabilities from which, if any, would be shared by FPL Group or FPL.&#160;&#160;In the event that FPL Group and FPL, or their affiliates, do not prevail in these legal and regulatory proceedings, actions and claims, there may be a material adverse effect on their financial statements.&#160;&#160;While management is unable to predict with certainty the outcome of these legal and regulatory proceedings, actions and claims, based on current knowledge it is not expected that their ultimate resolution, individually or collectively, will have a material adverse effect on the financial statements of FPL Group or FPL.</font></div> <div style="DISPLAY: block; 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TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">Total</font></div> </td> <td valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td colspan="2" valign="bottom" width="6%" style="BORDER-BOTTOM: black 2px solid"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DI SPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">Commodity</font></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">Contracts</font></div> </td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td colspan="2" valign="bottom" width="4%" style="BORDER-BOTTOM: black 2px solid"> <div style="DISPLAY: block; 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MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Aria l, sans-serif">Currency</font></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">Swap</font></div> </td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td colspan="2" valign="bottom" width="4%" style="BORDER-BOTTOM: black 2px solid"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">Total</font></div> </td> </tr><tr> <td valign="bottom" width="25%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font&g t;</td> <td colspan="23" valign="bottom" width="59%"> <div style="DISPLAY: block; 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FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </fon t></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font>< /td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> </tr><tr> <td align="left" valign="bottom" width="25%"> <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">Gains (losses) recognized in OCI</font></div> </td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> &l t;/td> <td align="right" valign="bottom" width="5%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">22</font></div> </td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">(37</font></div> </td> <td align="left" valign="bottom" width="3%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">)</font></div> </td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4%"> <div style="DISPLAY: block; 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FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> &l t;td align="right" valign="bottom" width="4%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">8</font></div> </td> <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="3%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align= "right"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">9</font></div> </td> <td align="left" valign="bottom" width="3%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(c)</font></font></div> </td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="3%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGH T: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">54</font></div> </td> <td valign="bottom" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160; </font></td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="5%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">146</font></div> </td> <td align="left" valign="bottom" width="3%"> ; <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(a)</font></font></div> </td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="3%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">(31</font></div> </td> <td align="left" valign="botto m" width="3%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">)<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(b)</font></font></div> </td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">8</font></div> </td> <td align="left " valign="bottom" width="3%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif"><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(c)</font></font></div> </td> <td align="left" valign="bottom" width="1%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="3%"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; 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FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160; </font></td> <td valign="middle" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160; </font></td> <td valign="middle" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160; </font></td> <td valign="middle" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160; </font></td> <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160 ; </font></td> <td valign="middle" width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160; </font></td> <td valign="middle" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160; </font></td> <td valign="middle" width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160; </font></td> <td valign="middle" width="1%"><font style="DISPLAY: inline; 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MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4%" style="BORDER-BOTTOM: black 4px double"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-R IGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial, sans-serif">(21</font></div> </td> <td align="left" valign="bottom" width="3%" style="PADDING-BOTTOM: 4px"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial, sans-serif">)</font></div> </td> <td align="left" valign="bottom" width="1%" style="BORDER-BOTTOM: black 4px double"> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: arial, sans-serif">$</font></div> </td> <td align="right" valign="bottom" width="4%" style="BORDER-BOTTOM: black 4px double"> <div style="DISPLAY: block; 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</font></td> </tr></table> </div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> </div> -2783000000 -1797000000 86000000 0 39000000 -173000000 11000000 -6000000 47155000000 44821000000 435000000 433000000 304000000 264000000 430000000 348000000 1248000000 1025000000 47155000000 44821000000 292000000 305000000 413347264 Large Accelerated Filer <div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Arial, sans-serif">3.&#160;&#160;Fair Value Measurements</font></div> <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br /></div> <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif">FPL Group and FPL use several different valuation techniques to measure the fair value of assets and liabilities, relying primarily on the market approach of using prices and other market information for identical and/or comparable assets and liabilities for those assets and liabilities that are measured on a recurring basis.&#160;&#160;Certain derivativ es and financial instruments are valued using option pricing models and take into consideration multiple inputs including commodity prices, volatility factors and discount rates, as well as counterparty credit ratings and credit enhancements.&#160;&#160;Additionally, when observable market data is not sufficient, valuation models are developed that incorporate FPL Group's and FPL's proprietary views of market factors and conditions.&#160;&#160;FPL Group's and FPL's assessment of the significance of any particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.</font></div> <div style="DISPLAY: block; 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