UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017



Commission File Number	Exact name of registrants as specified in their charters, address of principal executive offices and registrants' telephone number	IRS Employer Identification Number
1-8841	NEXTERA ENERGY, INC.	59-2449419
2-27612	FLORIDA POWER & LIGHT COMPANY	59-0247775
	700 Universe Boulevard Juno Beach, Florida 33408 (561) 694-4000

State or other jurisdiction of incorporation or organization: Florida

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) have been subject to such filing requirements for the past 90 days.

NextEra Energy, Inc. Yes þ No ¨ Florida Power & Light Company Yes þ No ¨

Indicate by check mark whether the registrants have submitted electronically and posted on their corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months.

NextEra Energy, Inc. Yes þ No ¨ Florida Power & Light Company Yes þ No ¨

Indicate by check mark whether the registrants are a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Securities Exchange Act of 1934.



NextEra Energy, Inc.	Large Accelerated Filer þ	Accelerated Filer ¨	Non-Accelerated Filer ¨	Smaller Reporting Company ¨	Emerging Growth Company ¨
Florida Power & Light Company	Large Accelerated Filer ¨	Accelerated Filer ¨	Non-Accelerated Filer þ	Smaller Reporting Company ¨	Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Exchange Act of 1934. o

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ¨ No þ

Number of shares of NextEra Energy, Inc. common stock, $0.01 par value, outstanding as of September 30, 2017: 1,000

Number of shares of Florida Power & Light Company common stock, without par value, outstanding as of September 30, 2017, all of which were held, beneficially and of record, by NextEra Energy, Inc.: 1,000

This combined Form 10-Q represents separate filings by NextEra Energy, Inc. and Florida Power & Light Company. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Florida Power & Light Company makes no representations as to the information relating to NextEra Energy, Inc.'s other operations.

Florida Power & Light Company meets the conditions set forth in General Instruction H.(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.

DEFINITIONS

Acronyms and defined terms used in the text include the following:



Term	Meaning
AFUDC	allowance for funds used during construction
AFUDC - equity	equity component of AFUDC
AOCI	accumulated other comprehensive income
capacity clause	capacity cost recovery clause, as established by the FPSC
Duane Arnold	Duane Arnold Energy Center
EPA	U.S. Environmental Protection Agency
FASB	Financial Accounting Standards Board
FERC	U.S. Federal Energy Regulatory Commission
Florida Southeast Connection	Florida Southeast Connection, LLC, a wholly owned NEER subsidiary
FPL	Florida Power & Light Company
FPSC	Florida Public Service Commission
fuel clause	fuel and purchased power cost recovery clause, as established by the FPSC
GAAP	generally accepted accounting principles in the U.S.
ITC	investment tax credit
kWh	kilowatt-hour(s)
Management's Discussion	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
MMBtu	One million British thermal units
MW	megawatt(s)
MWh	megawatt-hour(s)
NEE	NextEra Energy, Inc.
NEECH	NextEra Energy Capital Holdings, Inc.
NEER	NextEra Energy Resources, LLC
NEET	NextEra Energy Transmission, LLC
NEP	NextEra Energy Partners, LP
NEP OpCo	NextEra Energy Operating Partners, LP
Note __	Note __ to condensed consolidated financial statements
NRC	U.S. Nuclear Regulatory Commission
O&M expenses	other operations and maintenance expenses in the condensed consolidated statements of income
OCI	other comprehensive income
OTC	over-the-counter
OTTI	other than temporary impairment
PTC	production tax credit
PV	photovoltaic
Recovery Act	American Recovery and Reinvestment Act of 2009, as amended
regulatory ROE	return on common equity as determined for regulatory purposes
Sabal Trail	Sabal Trail Transmission, LLC, an entity in which a wholly owned NEER subsidiary has a 42.5% ownership interest
Seabrook	Seabrook Station
SEC	U.S. Securities and Exchange Commission
U.S.	United States of America

NEE, FPL, NEECH and NEER each has subsidiaries and affiliates with names that may include NextEra Energy, FPL, NextEra Energy Resources, NextEra, FPL Group, FPL Group Capital, FPL Energy, FPLE and similar references. For convenience and simplicity, in this report the terms NEE, FPL, NEECH and NEER are sometimes used as abbreviated references to specific subsidiaries, affiliates or groups of subsidiaries or affiliates. The precise meaning depends on the context.

TABLE OF CONTENTS



		Page No.

Definitions		2
Forward-Looking Statements		4

	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4.	Controls and Procedures	52

	PART II - OTHER INFORMATION

Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 6.	Exhibits	54

Signatures		55

FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, strategies, future events or performance (often, but not always, through the use of words or phrases such as may result, are expected to, will continue, is anticipated, aim, believe, will, could, should, would, estimated, may, plan, potential, future, projection, goals, target, outlook, predict and intend or words of similar meaning) are not statements of historical facts and may be forward looking. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could have a significant impact on NEE's and/or FPL's operations and financial results, and could cause NEE's and/or FPL's actual results to differ materially from those contained or implied in forward-looking statements made by or on behalf of NEE and/or FPL in this combined Form 10-Q, in presentations, on their respective websites, in response to questions or otherwise.

Regulatory, Legislative and Legal Risks


•	NEE's and FPL's business, financial condition, results of operations and prospects may be materially adversely affected by the extensive regulation of their business.


•	NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected if they are unable to recover in a timely manner any significant amount of costs, a return on certain assets or a reasonable return on invested capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise.


•	Regulatory decisions that are important to NEE and FPL may be materially adversely affected by political, regulatory and economic factors.


•	FPL's use of derivative instruments could be subject to prudence challenges and, if found imprudent, could result in disallowances of cost recovery for such use by the FPSC.

•

Any reductions or modifications to, or the elimination of, governmental incentives or policies that support utility scale renewable energy, including, but not limited to, tax laws, policies and incentives, renewable portfolio standards, feed-in tariffs or the EPA's final rule under Section 111(d) of the Clean Air Act, or the imposition of additional taxes or other assessments on renewable energy, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, NEER abandoning the development of renewable energy projects, a loss of NEER's investments in renewable energy projects and reduced project returns, any of which could have a material adverse effect on NEE's business, financial condition, results of operations and prospects.


•	NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected as a result of new or revised laws, regulations, interpretations or other regulatory initiatives.


•	NEE and FPL are subject to numerous environmental laws, regulations and other standards that may result in capital expenditures, increased operating costs and various liabilities, and may require NEE and FPL to limit or eliminate certain operations.


•	NEE's and FPL's business could be negatively affected by federal or state laws or regulations mandating new or additional limits on the production of greenhouse gas emissions.


•	Extensive federal regulation of the operations and businesses of NEE and FPL exposes NEE and FPL to significant and increasing compliance costs and may also expose them to substantial monetary penalties and other sanctions for compliance failures.


•	Changes in tax laws, guidance or policies, including but not limited to changes in corporate income tax rates, as well as judgments and estimates used in the determination of tax-related asset and liability amounts, could materially adversely affect NEE's and FPL's business, financial condition, results of operations and prospects.


•	NEE's and FPL's business, financial condition, results of operations and prospects may be materially adversely affected due to adverse results of litigation.

Operational Risks


•	NEE's and FPL's business, financial condition, results of operations and prospects could suffer if NEE and FPL do not proceed with projects under development or are unable to complete the construction of, or capital improvements to, electric generation, transmission and distribution facilities, gas infrastructure facilities or other facilities on schedule or within budget.


•	NEE and FPL may face risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements that may impede their development and operating activities.


•	The operation and maintenance of NEE's and FPL's electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities are subject to many operational risks, the consequences of which could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.


•	NEE's and FPL's business, financial condition, results of operations and prospects may be negatively affected by a lack of growth or slower growth in the number of customers or in customer usage.


•	NEE's and FPL's business, financial condition, results of operations and prospects can be materially adversely affected by weather conditions, including, but not limited to, the impact of severe weather.


•	Threats of terrorism and catastrophic events that could result from terrorism, cyber attacks, or individuals and/or groups attempting to disrupt NEE's and FPL's business, or the businesses of third parties, may materially adversely affect NEE's and FPL's business, financial condition, results of operations and prospects.


•	The ability of NEE and FPL to obtain insurance and the terms of any available insurance coverage could be materially adversely affected by international, national, state or local events and company-specific events, as well as the financial condition of insurers. NEE's and FPL's insurance coverage does not provide protection against all significant losses.

•

NEE invests in gas and oil producing and transmission assets through NEER’s gas infrastructure business. The gas infrastructure business is exposed to fluctuating market prices of natural gas, natural gas liquids, oil and other energy commodities. A prolonged period of low gas and oil prices could impact NEER’s gas infrastructure business and cause NEER to delay or cancel certain gas infrastructure projects and for certain existing projects to be impaired, which could materially adversely affect NEE's results of operations.


•	If supply costs necessary to provide NEER's full energy and capacity requirement services are not favorable, operating costs could increase and materially adversely affect NEE's business, financial condition, results of operations and prospects.


•	Due to the potential for significant volatility in market prices for fuel, electricity and renewable and other energy commodities, NEER's inability or failure to manage properly or hedge effectively the commodity risks within its portfolios could materially adversely affect NEE's business, financial condition, results of operations and prospects.


•	Reductions in the liquidity of energy markets may restrict the ability of NEE to manage its operational risks, which, in turn, could negatively affect NEE's results of operations.


•	NEE's and FPL's hedging and trading procedures and associated risk management tools may not protect against significant losses.


•	If price movements significantly or persistently deviate from historical behavior, NEE's and FPL's risk management tools associated with their hedging and trading procedures may not protect against significant losses.


•	If power transmission or natural gas, nuclear fuel or other commodity transportation facilities are unavailable or disrupted, FPL's and NEER's ability to sell and deliver power or natural gas may be limited.


•	NEE and FPL are subject to credit and performance risk from customers, hedging counterparties and vendors.


•	NEE and FPL could recognize financial losses or a reduction in operating cash flows if a counterparty fails to perform or make payments in accordance with the terms of derivative contracts or if NEE or FPL is required to post margin cash collateral under derivative contracts.


•	NEE and FPL are highly dependent on sensitive and complex information technology systems, and any failure or breach of those systems could have a material adverse effect on their business, financial condition, results of operations and prospects.


•	NEE's and FPL's retail businesses are subject to the risk that sensitive customer data may be compromised, which could result in a material adverse impact to their reputation and/or have a material adverse effect on the business, financial condition, results of operations and prospects of NEE and FPL.


•	NEE and FPL could recognize financial losses as a result of volatility in the market values of derivative instruments and limited liquidity in OTC markets.


•	NEE and FPL may be materially adversely affected by negative publicity.


•	NEE's and FPL's business, financial condition, results of operations and prospects may be materially adversely affected if FPL is unable to maintain, negotiate or renegotiate franchise agreements on acceptable terms with municipalities and counties in Florida.


•	NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected by work strikes or stoppages and increasing personnel costs.


•	NEE's ability to successfully identify, complete and integrate acquisitions is subject to significant risks, including, but not limited to, the effect of increased competition for acquisitions resulting from the consolidation of the power industry.


•	NEP’s acquisitions may not be completed and, even if completed, NEE may not realize the anticipated benefits of any acquisitions, which could materially adversely affect NEE’s business, financial condition, results of operations and prospects.

Nuclear Generation Risks


•	The operation and maintenance of NEE's and FPL's nuclear generation facilities involve environmental, health and financial risks that could result in fines or the closure of the facilities and in increased costs and capital expenditures.


•	In the event of an incident at any nuclear generation facility in the U.S. or at certain nuclear generation facilities in Europe, NEE and FPL could be assessed significant retrospective assessments and/or retrospective insurance premiums as a result of their participation in a secondary financial protection system and nuclear insurance mutual companies.


•	NRC orders or new regulations related to increased security measures and any future safety requirements promulgated by the NRC could require NEE and FPL to incur substantial operating and capital expenditures at their nuclear generation facilities and/or result in reduced revenues.


•	The inability to operate any of NEE's or FPL's nuclear generation units through the end of their respective operating licenses could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.


•	NEE's and FPL's nuclear units are periodically removed from service to accommodate planned refueling and maintenance outages, and for other purposes. If planned outages last longer than anticipated or if there are unplanned outages, NEE's and FPL's results of operations and financial condition could be materially adversely affected.

Liquidity, Capital Requirements and Common Stock Risks


•	Disruptions, uncertainty or volatility in the credit and capital markets may negatively affect NEE's and FPL's ability to fund their liquidity and capital needs and to meet their growth objectives, and can also materially adversely affect the results of operations and financial condition of NEE and FPL.


•	NEE's, NEECH's and FPL's inability to maintain their current credit ratings may materially adversely affect NEE's and FPL's liquidity and results of operations, limit the ability of NEE and FPL to grow their business, and increase interest costs.


•	NEE's and FPL's liquidity may be impaired if their credit providers are unable to fund their credit commitments to the companies or to maintain their current credit ratings.


•	Poor market performance and other economic factors could affect NEE's defined benefit pension plan's funded status, which may materially adversely affect NEE's and FPL's business, financial condition, liquidity and results of operations and prospects.


•	Poor market performance and other economic factors could adversely affect the asset values of NEE's and FPL's nuclear decommissioning funds, which may materially adversely affect NEE's and FPL's liquidity, financial condition and results of operations.


•	Certain of NEE's investments are subject to changes in market value and other risks, which may materially adversely affect NEE's liquidity, financial condition and results of operations.


•	NEE may be unable to meet its ongoing and future financial obligations and to pay dividends on its common stock if its subsidiaries are unable to pay upstream dividends or repay funds to NEE.


•	NEE may be unable to meet its ongoing and future financial obligations and to pay dividends on its common stock if NEE is required to perform under guarantees of obligations of its subsidiaries.


•	NEP may not be able to access sources of capital on commercially reasonable terms, which would have a material adverse effect on its ability to consummate future acquisitions and on the value of NEE’s limited partner interest in NEP OpCo.


•	Disruptions, uncertainty or volatility in the credit and capital markets may exert downward pressure on the market price of NEE's common stock.

These factors should be read together with the risk factors included in Part I, Item 1A. Risk Factors in NEE's and FPL's Annual Report on Form 10-K for the year ended December 31, 2016 (2016 Form 10-K), and investors should refer to that section of the 2016 Form 10-K. Any forward-looking statement speaks only as of the date on which such statement is made, and NEE and FPL undertake no obligation to update any forward-looking statement to reflect events or circumstances, including, but not limited to, unanticipated events, after the date on which such statement is made, unless otherwise required by law. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement.

Website Access to SEC Filings. NEE and FPL make their SEC filings, including the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, available free of charge on NEE's internet website, www.nexteraenergy.com, as soon as reasonably practicable after those documents are electronically filed with or furnished to the SEC. The information and materials available on NEE's website (or any of its subsidiaries' websites) are not incorporated by reference into this combined Form 10-Q. The SEC maintains an internet website that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC at www.sec.gov.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(millions, except per share amounts)

(unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
OPERATING REVENUES	$	4,808		$	4,805		$	13,185		$	12,457
OPERATING EXPENSES (INCOME)
Fuel, purchased power and interchange	1,176			1,217			3,093			3,105
Other operations and maintenance	769			833			2,400			2,474
Merger	2			123			17			129
Depreciation and amortization	1,070			983			2,576			2,262
Gains on disposal of a business/assets - net	(5		)	(4		)	(1,106		)	(257		)
Taxes other than income taxes and other - net	397			374			1,115			1,062
Total operating expenses - net	3,409			3,526			8,095			8,775
OPERATING INCOME	1,399			1,279			5,090			3,682
OTHER INCOME (DEDUCTIONS)
Interest expense	(381		)	(369		)	(1,171		)	(1,480		)
Benefits associated with differential membership interests - net	67			59			311			220
Equity in earnings of equity method investees	56			70			153			147
Allowance for equity funds used during construction	21			20			68			62
Interest income	20			23			59			61
Gains on disposal of investments and other property - net	15			9			64			36
Revaluation of contingent consideration	—			101			—			118
Other - net	23			15			7			21
Total other deductions - net	(179		)	(72		)	(509		)	(815		)
INCOME BEFORE INCOME TAXES	1,220			1,207			4,581			2,867
INCOME TAXES	364			418			1,329			879
NET INCOME	856			789			3,252			1,988
LESS NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	9			36			29			42
NET INCOME ATTRIBUTABLE TO NEE	$	847		$	753		$	3,223		$	1,946
Earnings per share attributable to NEE:
Basic	$	1.80		$	1.63		$	6.88		$	4.21
Assuming dilution	$	1.79		$	1.62		$	6.83		$	4.19
Dividends per share of common stock	$	0.9825		$	0.87		$	2.9475		$	2.61
Weighted-average number of common shares outstanding:
Basic	469.4			463.3			468.3			461.7
Assuming dilution	473.5			466.0			472.0			464.7

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2016 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(millions)

(unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
NET INCOME	$	856		$	789		$	3,252		$	1,988
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Reclassification of unrealized losses on cash flow hedges from accumulated other comprehensive income (loss) to net income (net of $4, $3, $9 and $26 tax expense, respectively)	10			17			24			53
Net unrealized gains (losses) on available for sale securities:
Net unrealized gains on securities still held (net of $23, $23, $68 and $42 tax expense, respectively)	31			31			91			56
Reclassification from accumulated other comprehensive income (loss) to net income (net of $4, $2, $15 and $6 tax benefit, respectively)	(6		)	(2		)	(23		)	(8		)
Defined benefit pension and other benefits plans (net of less than $1 tax benefit, $4 tax expense and $4 tax benefit, respectively)	(1		)	—			6			(7		)
Net unrealized gains (losses) on foreign currency translation (net of less than $1, $1 and $1 tax expense and $2 tax benefit, respectively)	10			(9		)	30			19
Other comprehensive income (loss) related to equity method investee (net of less than $1 tax expense, $0, less than $1 tax expense and $3 tax benefit, respectively)	1			3			1			(1		)
Total other comprehensive income, net of tax	45			40			129			112
COMPREHENSIVE INCOME	901			829			3,381			2,100
LESS COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	9			30			40			22
COMPREHENSIVE INCOME ATTRIBUTABLE TO NEE	$	892		$	799		$	3,341		$	2,078

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2016 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions, except par value)

(unaudited)



	September 30, 2017			December 31, 2016
PROPERTY, PLANT AND EQUIPMENT
Electric plant in service and other property	$	84,045		$	80,150
Nuclear fuel	2,011			2,131
Construction work in progress	6,492			4,732
Accumulated depreciation and amortization	(21,460		)	(20,101		)
Total property, plant and equipment - net ($14,186 and $14,632 related to VIEs, respectively)	71,088			66,912
CURRENT ASSETS
Cash and cash equivalents	1,381			1,292
Customer receivables, net of allowances of $9 and $5, respectively	2,147			1,784
Other receivables	603			655
Materials, supplies and fossil fuel inventory	1,352			1,289
Regulatory assets	551			524
Derivatives	442			885
Assets held for sale	—			452
Other	551			528
Total current assets	7,027			7,409
OTHER ASSETS
Special use funds	5,894			5,434
Other investments ($474 and $479 related to a VIE, respectively)	2,983			2,482
Prepaid benefit costs	1,217			1,177
Regulatory assets ($53 and $107 related to a VIE, respectively)	3,290			1,894
Derivatives	1,546			1,350
Other	3,736			3,335
Total other assets	18,666			15,672
TOTAL ASSETS	$	96,781		$	89,993
CAPITALIZATION
Common stock ($0.01 par value, authorized shares - 800; outstanding shares - 470 and 468, respectively)	$	5		$	5
Additional paid-in capital	9,046			8,948
Retained earnings	17,299			15,458
Accumulated other comprehensive income (loss)	48			(70		)
Total common shareholders' equity	26,398			24,341
Noncontrolling interests	923			990
Total equity	27,321			25,331
Long-term debt ($5,909 and $5,080 related to VIEs, respectively)	30,345			27,818
Total capitalization	57,666			53,149
CURRENT LIABILITIES
Commercial paper	2,074			268
Other short-term debt	255			150
Current maturities of long-term debt	2,285			2,604
Accounts payable	2,256			3,447
Customer deposits	449			470
Accrued interest and taxes	873			480
Derivatives	257			404
Accrued construction-related expenditures	921			1,120
Regulatory liabilities	157			299
Liabilities associated with assets held for sale	—			451
Other	2,077			1,226
Total current liabilities	11,604			10,919
OTHER LIABILITIES AND DEFERRED CREDITS
Asset retirement obligations	2,882			2,736
Deferred income taxes	12,563			11,101
Regulatory liabilities	4,895			4,906
Derivatives	514			477
Deferral related to differential membership interests - VIEs	4,542			4,656
Other	2,115			2,049
Total other liabilities and deferred credits	27,511			25,925
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES	$	96,781		$	89,993

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2016 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions)

(unaudited)



	Nine Months Ended September 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	3,252		$	1,988
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	2,576			2,262
Nuclear fuel and other amortization	210			275
Unrealized losses on marked to market derivative contracts - net	45			369
Foreign currency transaction losses (gains)	(23		)	99
Deferred income taxes	1,316			766
Cost recovery clauses and franchise fees	61			111
Acquisition of purchased power agreement	(258		)	—
Benefits associated with differential membership interests - net	(311		)	(220		)
Gains on disposal of a business/assets - net	(1,170		)	(291		)
Recoverable storm-related costs	(334		)	(17		)
Other - net	106			(161		)
Changes in operating assets and liabilities:
Current assets	(544		)	(204		)
Noncurrent assets	(77		)	(17		)
Current liabilities	299			362
Noncurrent liabilities	12			(28		)
Net cash provided by operating activities	5,160			5,294
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures of FPL	(3,676		)	(2,976		)
Independent power and other investments of NEER	(4,678		)	(4,610		)
Nuclear fuel purchases	(175		)	(194		)
Other capital expenditures and other investments	(58		)	(149		)
Proceeds from sale of the fiber-optic telecommunications business	1,482			—
Sale of independent power and other investments of NEER	159			395
Proceeds from sale or maturity of securities in special use funds and other investments	2,059			2,635
Purchases of securities in special use funds and other investments	(2,146		)	(2,711		)
Proceeds from sales of noncontrolling interests in NEP	—			645
Other - net	198			(18		)
Net cash used in investing activities	(6,835		)	(6,983		)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of long-term debt	5,196			4,644
Retirements of long-term debt	(3,892		)	(2,654		)
Proceeds from differential membership investors	340			328
Net change in commercial paper	1,806			254
Proceeds from other short-term debt	200			500
Repayments of other short-term debt	(2		)	(362		)
Issuances of common stock - net	36			528
Dividends on common stock	(1,382		)	(1,205		)
Other - net	(538		)	(234		)
Net cash provided by financing activities	1,764			1,799
Net increase in cash and cash equivalents	89			110
Cash and cash equivalents at beginning of period	1,292			571
Cash and cash equivalents at end of period	$	1,381		$	681
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued property additions	$	2,036		$	2,655
Decrease (increase) in property, plant and equipment - net as a result of cash grants primarily under the Recovery Act	$	(145	)	$	403
Increase in property, plant and equipment - net as a result of a settlement/noncash exchange	$	(92	)	$	(70	)
Proceeds from differential membership investors used to reduce debt	$	—		$	100

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2016 Form 10-K.

NEXTERA ENERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(millions)

(unaudited)



	Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Common Shareholders' Equity			Non- controlling Interests			Total Equity
	Shares	Aggregate Par Value		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Common Shareholders' Equity			Non- controlling Interests			Total Equity
Balances, December 31, 2016	468	$	5	$	8,948		$	(70	)	$	15,458		$	24,341		$	990		$	25,331
Net income	—	—		—			—			3,223			3,223			29
Issuances of common stock, net of issuance cost of less than $1	2	—		24			—			—			24			—
Share-based payment activity	—	—		77			—			—			77			—
Dividends on common stock	—	—		—			—			(1,382		)	(1,382		)	—
Other comprehensive income	—	—		—			118			—			118			11
Sale of NEER assets to NEP	—	—		—			—			—			—			(17		)
Distributions to noncontrolling interests	—	—		—			—			—			—			(64		)
Other	—	—		(3		)	—			—			(3		)	(26		)
Balances, September 30, 2017	470	$	5	$	9,046		$	48		$	17,299		$	26,398		$	923		$	27,321



	Common Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Common Shareholders' Equity			Non- controlling Interests			Total Equity
	Shares	Aggregate Par Value		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Common Shareholders' Equity			Non- controlling Interests			Total Equity
Balances, December 31, 2015	461	$	5	$	8,596		$	(167	)	$	14,140		$	22,574		$	538		$	23,112
Net income	—	—		—			—			1,946			1,946			42
Issuances of common stock, net of issuance cost of less than $1	5	—		523			—			—			523			—
Share-based payment activity	1	—		96			—			—			96			—
Dividends on common stock	—	—		—			—			(1,205		)	(1,205		)	—
Premium on equity units	—	—		(200		)	—			—			(200		)	—
Other comprehensive income (loss)	—	—		—			131			—			131			(19		)
Sale of NEER assets to NEP	—	—		49			—			—			49			440
Distributions to noncontrolling interests	—	—		—			—			—			—			(37		)
Other	—	—		(25		)	—			18			(7		)	(2		)
Balances, September 30, 2016	467	$	5	$	9,039		$	(36	)	$	14,899		$	23,907		$	962		$	24,869

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2016 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(millions)

(unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
OPERATING REVENUES	$	3,477		$	3,283		$	9,095		$	8,337
OPERATING EXPENSES (INCOME)
Fuel, purchased power and interchange	1,036			1,045			2,696			2,556
Other operations and maintenance	362			403			1,137			1,203
Depreciation and amortization	704			587			1,514			1,207
Taxes other than income taxes and other - net	353			327			975			908
Total operating expenses - net	2,455			2,362			6,322			5,874
OPERATING INCOME	1,022			921			2,773			2,463
OTHER INCOME (DEDUCTIONS)
Interest expense	(121		)	(114		)	(360		)	(342		)
Allowance for equity funds used during construction	20			17			55			55
Other - net	1			—			2			3
Total other deductions - net	(100		)	(97		)	(303		)	(284		)
INCOME BEFORE INCOME TAXES	922			824			2,470			2,179
INCOME TAXES	356			309			933			823
NET INCOME^(a)	$	566		$	515		$	1,537		$	1,356

_______________________


(a)	FPL's comprehensive income is the same as reported net income.

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2016 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions, except share amount)

(unaudited)



	September 30, 2017			December 31, 2016
ELECTRIC UTILITY PLANT AND OTHER PROPERTY
Plant in service and other property	$	46,394		$	44,966
Nuclear fuel	1,260			1,308
Construction work in progress	3,341			2,039
Accumulated depreciation and amortization	(12,730		)	(12,304		)
Total electric utility plant and other property - net	38,265			36,009
CURRENT ASSETS
Cash and cash equivalents	8			33
Customer receivables, net of allowances of $5 and $2, respectively	1,212			768
Other receivables	225			148
Materials, supplies and fossil fuel inventory	903			851
Regulatory assets	551			524
Derivatives	7			209
Other	176			213
Total current assets	3,082			2,746
OTHER ASSETS
Special use funds	3,963			3,665
Prepaid benefit costs	1,332			1,301
Regulatory assets ($53 and $107 related to a VIE, respectively)	2,971			1,573
Other	302			207
Total other assets	8,568			6,746
TOTAL ASSETS	$	49,915		$	45,501
CAPITALIZATION
Common stock (no par value, 1,000 shares authorized, issued and outstanding)	$	1,373		$	1,373
Additional paid-in capital	8,291			8,332
Retained earnings	7,682			6,875
Total common shareholder's equity	17,346			16,580
Long-term debt ($74 and $144 related to a VIE, respectively)	10,055			9,705
Total capitalization	27,401			26,285
CURRENT LIABILITIES
Commercial paper	1,079			268
Other short-term debt	250			150
Current maturities of long-term debt	463			367
Accounts payable	764			837
Customer deposits	446			466
Accrued interest and taxes	637			240
Accrued construction-related expenditures	218			262
Regulatory liabilities	145			294
Other	1,576			497
Total current liabilities	5,578			3,381
OTHER LIABILITIES AND DEFERRED CREDITS
Asset retirement obligations	2,001			1,919
Deferred income taxes	9,554			8,541
Regulatory liabilities	4,855			4,893
Other	526			482
Total other liabilities and deferred credits	16,936			15,835
COMMITMENTS AND CONTINGENCIES
TOTAL CAPITALIZATION AND LIABILITIES	$	49,915		$	45,501

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2016 Form 10-K.

FLORIDA POWER & LIGHT COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions)

(unaudited)



	Nine Months Ended September 30,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,537		$	1,356
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	1,514			1,207
Nuclear fuel and other amortization	153			167
Deferred income taxes	987			569
Cost recovery clauses and franchise fees	61			111
Acquisition of purchased power agreement	(258		)	—
Recoverable storm-related costs	(334		)	(17		)
Other - net	(63		)	(15		)
Changes in operating assets and liabilities:
Current assets	(578		)	(185		)
Noncurrent assets	(45		)	12
Current liabilities	507			679
Noncurrent liabilities	(13		)	(94		)
Net cash provided by operating activities	3,468			3,790
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(3,676		)	(2,976		)
Nuclear fuel purchases	(104		)	(121		)
Proceeds from sale or maturity of securities in special use funds	1,241			1,775
Purchases of securities in special use funds	(1,320		)	(1,836		)
Other - net	29			32
Net cash used in investing activities	(3,830		)	(3,126		)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of long-term debt	200			150
Retirements of long-term debt	(73		)	(262		)
Net change in commercial paper	811			408
Proceeds from other short-term debt	200			500
Repayments of other short-term debt	(2		)	(150		)
Dividends to NEE	(800		)	(1,300		)
Other - net	1			13
Net cash provided by (used in) financing activities	337			(641		)
Net increase (decrease) in cash and cash equivalents	(25		)	23
Cash and cash equivalents at beginning of period	33			23
Cash and cash equivalents at end of period	$	8		$	46
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued property additions	$	400		$	475
Increase in electric utility plant and other property - net as a result of a noncash exchange	$	(96	)	$	—

This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2016 Form 10-K.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The accompanying condensed consolidated financial statements should be read in conjunction with the 2016 Form 10-K. In the opinion of NEE and FPL management, all adjustments (consisting of normal recurring accruals) considered necessary for fair financial statement presentation have been made. Certain amounts included in the prior year's condensed consolidated financial statements have been reclassified to conform to the current year's presentation. The results of operations for an interim period generally will not give a true indication of results for the year.

1. Employee Retirement Benefits

NEE sponsors a qualified noncontributory defined benefit pension plan for substantially all employees of NEE and its subsidiaries and sponsors a contributory postretirement plan for other benefits for retirees of NEE and its subsidiaries meeting certain eligibility requirements.

The components of net periodic (income) cost for the plans are as follows:



	Pension Benefits						Postretirement Benefits					Pension Benefits						Postretirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,					Nine Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016		2017			2016			2017			2016
	(millions)
Service cost	$	16		$	16		$	—		$	—	$	49		$	47		$	1		$	1
Interest cost	21			26			2			3		63			78			6			10
Expected return on plan assets	(67		)	(65		)	—			—		(202		)	(195		)	—			—
Amortization of prior service cost (benefit)	—			—			(4		)	—		(1		)	1			(6		)	(2		)
Special termination benefits	—			—			—			—		38			—			—			—
Postretirement benefits settlement	—			—			—			—		—			—			1			—
Net periodic (income) cost at NEE	$	(30	)	$	(23	)	$	(2	)	$	3	$	(53	)	$	(69	)	$	2		$	9
Net periodic (income) cost at FPL	$	(20	)	$	(15	)	$	(2	)	$	2	$	(32	)	$	(44	)	$	1		$	7

Amendments to Presentation of Retirement Benefits - In March 2017, the FASB issued an accounting standards update that requires certain changes in classification of components of net periodic pension and postretirement benefit costs within the income statement and allows only the service cost component to be eligible for capitalization. This standards update will be applied using the retrospective approach for presentation of the components of net periodic pension and postretirement benefit costs and the prospective approach for capitalization of service cost. NEE and FPL will apply this standards update on January 1, 2018, and are currently evaluating the impact the adoption will have on their consolidated financial statements.

2. Derivative Instruments

NEE and FPL use derivative instruments (primarily swaps, options, futures and forwards) to manage the physical and financial risks inherent in the purchase and sale of fuel and electricity, as well as interest rate and foreign currency exchange rate risk associated primarily with outstanding and expected future debt issuances and borrowings, and to optimize the value of NEER's power generation and gas infrastructure assets. NEE and FPL do not utilize hedge accounting for their cash flow and fair value hedges.

With respect to commodities related to NEE's competitive energy business, NEER employs risk management procedures to conduct its activities related to optimizing the value of its power generation and gas infrastructure assets, providing full energy and capacity requirements services primarily to distribution utilities, and engaging in power and gas marketing and trading activities to take advantage of expected future favorable price movements and changes in the expected volatility of prices in the energy markets. These risk management activities involve the use of derivative instruments executed within prescribed limits to manage the risk associated with fluctuating commodity prices. Transactions in derivative instruments are executed on recognized exchanges or via the OTC markets, depending on the most favorable credit terms and market execution factors. For NEER's power generation and gas infrastructure assets, derivative instruments are used to hedge all or a portion of the expected output of these assets. These hedges are designed to reduce the effect of adverse changes in the wholesale forward commodity markets associated with NEER's power generation and gas infrastructure assets. With regard to full energy and capacity requirements services, NEER is required to vary the quantity of energy and related services based on the load demands of the customers served. For this type of transaction, derivative instruments are used to hedge the anticipated electricity quantities required to serve these customers and reduce the effect of unfavorable changes in the forward energy markets. Additionally, NEER takes positions in energy markets based on differences between actual forward market levels and management's view of fundamental market conditions, including supply/demand imbalances, changes in traditional flows of energy, changes in short- and long-term weather patterns and anticipated regulatory and legislative outcomes. NEER uses derivative instruments to realize value from these market dislocations, subject to strict risk management limits around market, operational and credit exposure.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Derivative instruments, when required to be marked to market, are recorded on NEE's and FPL's condensed consolidated balance sheets as either an asset or liability measured at fair value. At FPL, substantially all changes in the derivatives' fair value are deferred as a regulatory asset or liability until the contracts are settled, and, upon settlement, any gains or losses are passed through the fuel clause. For NEE's non-rate regulated operations, predominantly NEER, essentially all changes in the derivatives' fair value for power purchases and sales, fuel sales and trading activities are recognized on a net basis in operating revenues; fuel purchases used in the production of electricity are recognized in fuel, purchased power and interchange expense; and the equity method investees' related activity is recognized in equity in earnings of equity method investees in NEE's condensed consolidated statements of income. Settlement gains and losses are included within the line items in the condensed consolidated statements of income to which they relate. Transactions for which physical delivery is deemed not to have occurred are presented on a net basis in the condensed consolidated statements of income. For commodity derivatives, NEE believes that, where offsetting positions exist at the same location for the same time, the transactions are considered to have been netted and therefore physical delivery has been deemed not to have occurred for financial reporting purposes. Settlements related to derivative instruments are primarily recognized in net cash provided by operating activities in NEE's and FPL's condensed consolidated statements of cash flows.

For interest rate and foreign currency derivative instruments, all changes in the derivatives' fair value, as well as the transaction gain or loss on foreign denominated debt, are recognized in interest expense in NEE's condensed consolidated statements of income. In addition, for the nine months ended September 30, 2017 and 2016, NEE reclassified approximately $2 million ($1 million after-tax) and $17 million ($10 million after tax), respectively, from AOCI to interest expense primarily because it became probable that related future transactions being hedged would not occur. At September 30, 2017, NEE's AOCI included amounts related to discontinued interest rate cash flow hedges with expiration dates through March 2035 and foreign currency cash flow hedges with expiration dates through September 2030. Approximately $27 million of net losses included in AOCI at September 30, 2017 is expected to be reclassified into earnings within the next 12 months as the principal and/or interest payments are made. Such amounts assume no change in scheduled principal payments.

Fair Value of Derivative Instruments - The tables below present NEE's and FPL's gross derivative positions at September 30, 2017 and December 31, 2016, as required by disclosure rules. However, the majority of the underlying contracts are subject to master netting agreements and generally would not be contractually settled on a gross basis. Therefore, the tables below also present the derivative positions on a net basis, which reflect the offsetting of positions of certain transactions within the portfolio, the contractual ability to settle contracts under master netting arrangements and the netting of margin cash collateral (see Note 3 - Recurring Fair Value Measurements for netting information), as well as the location of the net derivative position on the condensed consolidated balance sheets.



	September 30, 2017
	Gross Basis				Net Basis
	Assets		Liabilities		Assets		Liabilities
	(millions)
NEE:
Commodity contracts	$	4,081	$	2,546	$	1,885	$	403
Interest rate contracts	76		299		92		315
Foreign currency contracts	—		42		11		53
Total fair values	$	4,157	$	2,887	$	1,988	$	771

FPL:
Commodity contracts	$	11	$	7	$	7	$	3

Net fair value by NEE balance sheet line item:
Current derivative assets^(a)					$	442
Noncurrent derivative assets^(b)					1,546
Current derivative liabilities							$	257
Noncurrent derivative liabilities^(c)							514
Total derivatives					$	1,988	$	771

Net fair value by FPL balance sheet line item:
Current derivative assets					$	7
Current other liabilities							$	3
Total derivatives					$	7	$	3

———————————————


(a)	Reflects the netting of approximately $74 million in margin cash collateral received from counterparties.


(b)	Reflects the netting of approximately $12 million in margin cash collateral received from counterparties.


(c)	Reflects the netting of approximately $33 million in margin cash collateral paid to counterparties.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)



	December 31, 2016
	Gross Basis				Net Basis
	Assets		Liabilities		Assets		Liabilities
	(millions)
NEE:
Commodity contracts	$	4,590	$	2,968	$	1,938	$	483
Interest rate contracts	288		284		296		292
Foreign currency contracts	1		106		1		106
Total fair values	$	4,879	$	3,358	$	2,235	$	881

FPL:
Commodity contracts	$	212	$	4	$	209	$	1

Net fair value by NEE balance sheet line item:
Current derivative assets^(a)					$	885
Noncurrent derivative assets^(b)					1,350
Current derivative liabilities							$	404
Noncurrent derivative liabilities							477
Total derivatives					$	2,235	$	881

Net fair value by FPL balance sheet line item:
Current derivative assets					$	209
Current other liabilities							$	1
Total derivatives					$	209	$	1

———————————————


(a)	Reflects the netting of approximately $96 million in margin cash collateral received from counterparties.


(b)	Reflects the netting of approximately $71 million in margin cash collateral received from counterparties.

At September 30, 2017 and December 31, 2016, NEE had approximately $13 million and $5 million (none at FPL), respectively, in margin cash collateral received from counterparties that was not offset against derivative assets in the above presentation. These amounts are included in current other liabilities on NEE's condensed consolidated balance sheets. Additionally, at September 30, 2017 and December 31, 2016, NEE had approximately $177 million and $129 million (none at FPL), respectively, in margin cash collateral paid to counterparties that was not offset against derivative assets or liabilities in the above presentation. These amounts are included in current other assets on NEE's condensed consolidated balance sheets.

Income Statement Impact of Derivative Instruments - Gains (losses) related to NEE's derivatives are recorded in NEE's condensed consolidated statements of income as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(millions)
Commodity contracts:^(a)
Operating revenues	$	114		$	264		$	538		$	502
Fuel, purchased power and interchange	—			1			—			(1		)
Foreign currency contracts - interest expense	(4		)	15			53			96
Foreign currency contracts - other - net	(2		)	1			(5		)	(2		)
Interest rate contracts - interest expense	(41		)	(58		)	(232		)	(515		)
Losses reclassified from AOCI to interest expense:
Interest rate contracts	(13		)	(18		)	(36		)	(71		)
Foreign currency contracts	(1		)	(3		)	(80		)	(9		)
Total	$	53		$	202		$	238		$	—

———————————————

(a)

For the three and nine months ended September 30, 2017, FPL recorded losses of approximately $12 million and $164 million, respectively, related to commodity contracts as regulatory assets on its condensed consolidated balance sheets. For the three and nine months ended September 30, 2016, FPL recorded approximately $35 million of losses and $35 million of gains, respectively, related to commodity contracts as regulatory assets and regulatory liabilities on its condensed consolidated balance sheets.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Notional Volumes of Derivative Instruments - The following table represents net notional volumes associated with derivative instruments that are required to be reported at fair value in NEE's and FPL's condensed consolidated financial statements. The table includes significant volumes of transactions that have minimal exposure to commodity price changes because they are variably priced agreements. These volumes are only an indication of the commodity exposure that is managed through the use of derivatives. They do not represent net physical asset positions or non-derivative positions and their hedges, nor do they represent NEE’s and FPL’s net economic exposure, but only the net notional derivative positions that fully or partially hedge the related asset positions. NEE and FPL had derivative commodity contracts for the following net notional volumes:



	September 30, 2017					December 31, 2016
Commodity Type	NEE			FPL		NEE			FPL
	(millions)
Power	(107	)	MWh	—		(84	)	MWh	—
Natural gas	312		MMBtu	255	MMBtu	1,002		MMBtu	618	MMBtu
Oil	(3	)	barrels	—		(7	)	barrels	—

At September 30, 2017 and December 31, 2016, NEE had interest rate contracts with notional amounts totaling approximately $13.6 billion and $15.1 billion, respectively, and foreign currency contracts with notional amounts totaling approximately $714 million and $705 million, respectively.

Credit-Risk-Related Contingent Features - Certain derivative instruments contain credit-risk-related contingent features including, among other things, the requirement to maintain an investment grade credit rating from specified credit rating agencies and certain financial ratios, as well as credit-related cross-default and material adverse change triggers. At September 30, 2017 and December 31, 2016, the aggregate fair value of NEE's derivative instruments with credit-risk-related contingent features that were in a liability position was approximately $1.1 billion ($7 million for FPL) and $1.3 billion ($5 million for FPL), respectively.

If the credit-risk-related contingent features underlying these derivative agreements were triggered, certain subsidiaries of NEE, including FPL, could be required to post collateral or settle contracts according to contractual terms which generally allow netting of contracts in offsetting positions. Certain derivative contracts contain multiple types of credit-related triggers. To the extent these contracts contain a credit ratings downgrade trigger, the maximum exposure is included in the following credit ratings collateral posting requirements. If FPL's and NEECH's credit ratings were downgraded to BBB/Baa2 (a two level downgrade for FPL and a one level downgrade for NEECH from the current lowest applicable rating), applicable NEE subsidiaries would be required to post collateral such that the total posted collateral would be approximately $130 million (none at FPL) as of September 30, 2017 and $110 million (none at FPL) as of December 31, 2016. If FPL's and NEECH's credit ratings were downgraded to below investment grade, applicable NEE subsidiaries would be required to post additional collateral such that the total posted collateral would be approximately $1.1 billion ($40 million at FPL) as of September 30, 2017 and $990 million ($10 million at FPL) as of December 31, 2016. Some derivative contracts do not contain credit ratings downgrade triggers, but do contain provisions that require certain financial measures be maintained and/or have credit-related cross-default triggers. In the event these provisions were triggered, applicable NEE subsidiaries could be required to post additional collateral of up to approximately $220 million ($140 million at FPL) as of September 30, 2017 and $225 million ($115 million at FPL) as of December 31, 2016.

Collateral related to derivatives may be posted in the form of cash or credit support in the normal course of business. At September 30, 2017 and December 31, 2016, applicable NEE subsidiaries have posted approximately $2 million (none at FPL) and $1 million (none at FPL), respectively, in cash and $26 million (none at FPL) and $30 million (none at FPL), respectively, in the form of letters of credit each of which could be applied toward the collateral requirements described above. FPL and NEECH have credit facilities generally in excess of the collateral requirements described above that would be available to support, among other things, derivative activities. Under the terms of the credit facilities, maintenance of a specific credit rating is not a condition to drawing on these credit facilities, although there are other conditions to drawing on these credit facilities.

Additionally, some contracts contain certain adequate assurance provisions where a counterparty may demand additional collateral based on subjective events and/or conditions. Due to the subjective nature of these provisions, NEE and FPL are unable to determine an exact value for these items and they are not included in any of the quantitative disclosures above.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

3. Fair Value Measurements

The fair value of assets and liabilities are determined using either unadjusted quoted prices in active markets (Level 1) or pricing inputs that are observable (Level 2) whenever that information is available and using unobservable inputs (Level 3) to estimate fair value only when relevant observable inputs are not available. NEE 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 at fair value on a recurring basis. NEE's and FPL's assessment of the significance of any particular input to the fair value measurement requires judgment and may affect placement within the fair value hierarchy levels. Non-performance risk, including the consideration of a credit valuation adjustment, is also considered in the determination of fair value for all assets and liabilities measured at fair value.

Cash Equivalents and Restricted Cash - NEE and FPL hold investments in money market funds. The fair value of these funds is estimated using a market approach based on current observable market prices.

Special Use Funds and Other Investments - NEE and FPL hold primarily debt and equity securities directly, as well as indirectly through commingled funds. Substantially all directly held equity securities are valued at their quoted market prices. For directly held debt securities, multiple prices and price types are obtained from pricing vendors whenever possible, which enables cross-provider validations. A primary price source is identified based on asset type, class or issue of each security. Commingled funds, which are similar to mutual funds, are maintained by banks or investment companies and hold certain investments in accordance with a stated set of objectives. The fair value of commingled funds is primarily derived from the quoted prices in active markets of the underlying securities. Because the fund shares are offered to a limited group of investors, they are not considered to be traded in an active market.

Derivative Instruments - NEE and FPL measure the fair value of commodity contracts using a combination of market and income approaches utilizing prices observed on commodities exchanges and in the OTC markets, or through the use of industry-standard valuation techniques, such as option modeling or discounted cash flows techniques, incorporating both observable and unobservable valuation inputs. The resulting measurements are the best estimate of fair value as represented by the transfer of the asset or liability through an orderly transaction in the marketplace at the measurement date.

Most exchange-traded derivative assets and liabilities are valued directly using unadjusted quoted prices. For exchange-traded derivative assets and liabilities where the principal market is deemed to be inactive based on average daily volumes and open interest, the measurement is established using settlement prices from the exchanges, and therefore considered to be valued using other observable inputs.

NEE, through its subsidiaries, including FPL, also enters into OTC commodity contract derivatives. The majority of these contracts are transacted at liquid trading points, and the prices for these contracts are verified using quoted prices in active markets from exchanges, brokers or pricing services for similar contracts.

NEE, through NEER, also enters into full requirements contracts, which, in most cases, meet the definition of derivatives and are measured at fair value. These contracts typically have one or more inputs that are not observable and are significant to the valuation of the contract. In addition, certain exchange and non-exchange traded derivative options at NEE have one or more significant inputs that are not observable, and are valued using industry-standard option models.

In all cases where NEE and FPL use significant unobservable inputs for the valuation of a commodity contract, consideration is given to the assumptions that market participants would use in valuing the asset or liability. The primary input to the valuation models for commodity contracts is the forward commodity curve for the respective instruments. Other inputs include, but are not limited to, assumptions about market liquidity, volatility, correlation and contract duration as more fully described below in Significant Unobservable Inputs Used in Recurring Fair Value Measurements. In instances where the reference markets are deemed to be inactive or do not have transactions for a similar contract, the derivative assets and liabilities may be valued using significant other observable inputs and potentially significant unobservable inputs. In such instances, the valuation for these contracts is established using techniques including extrapolation from or interpolation between actively traded contracts, or estimated basis adjustments from liquid trading points. NEE and FPL regularly evaluate and validate the inputs used to determine fair value by a number of methods, consisting of various market price verification procedures, including the use of pricing services and multiple broker quotes to support the market price of the various commodities. In all cases where there are assumptions and models used to generate inputs for valuing derivative assets and liabilities, the review and verification of the assumptions, models and changes to the models are undertaken by individuals that are independent of those responsible for estimating fair value.

NEE uses interest rate contracts and foreign currency contracts to mitigate and adjust interest rate and foreign currency exchange exposure related primarily to certain outstanding and expected future debt issuances and borrowings when deemed appropriate based on market conditions or when required by financing agreements. NEE estimates the fair value of these derivatives using an income approach based on a discounted cash flows valuation technique utilizing the net amount of estimated future cash inflows and outflows related to the agreements.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

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:



	September 30, 2017
	Level 1		Level 2			Level 3		Netting^(a)			Total
	(millions)
Assets:
Cash equivalents and restricted cash:^(b)
NEE - equity securities	$	999	$	—		$	—				$	999
FPL - equity securities	$	112	$	—		$	—				$	112
Special use funds:^(c)
NEE:
Equity securities	$	1,590	$	1,695	^(d)	$	—				$	3,285
U.S. Government and municipal bonds	$	404	$	138		$	—				$	542
Corporate debt securities	$	1	$	772		$	—				$	773
Mortgage-backed securities	$	—	$	452		$	—				$	452
Other debt securities	$	—	$	126		$	—				$	126
FPL:
Equity securities	$	442	$	1,545	^(d)	$	—				$	1,987
U.S. Government and municipal bonds	$	301	$	115		$	—				$	416
Corporate debt securities	$	—	$	542		$	—				$	542
Mortgage-backed securities	$	—	$	343		$	—				$	343
Other debt securities	$	—	$	114		$	—				$	114
Other investments:
NEE:
Equity securities	$	25	$	10		$	—				$	35
Debt securities	$	32	$	109		$	—				$	141
Derivatives:
NEE:
Commodity contracts	$	1,168	$	1,503		$	1,410	$	(2,196	)	$	1,885	^(e)
Interest rate contracts	$	—	$	76		$	—	$	16		$	92	^(e)
Foreign currency contracts	$	—	$	—		$	—	$	11		$	11	^(e)
FPL - commodity contracts	$	—	$	10		$	1	$	(4	)	$	7	^(e)
Liabilities:
Derivatives:
NEE:
Commodity contracts	$	1,144	$	900		$	502	$	(2,143	)	$	403	^(e)
Interest rate contracts	$	—	$	171		$	128	$	16		$	315	^(e)
Foreign currency contracts	$	—	$	42		$	—	$	11		$	53	^(e)
FPL - commodity contracts	$	—	$	5		$	2	$	(4	)	$	3	^(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 condensed consolidated balance sheets and are recorded in customer receivables - net and accounts payable, respectively.


(b)	Includes restricted cash of approximately $137 million ($99 million for FPL) in other current 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)	See Note 2 - Fair Value of Derivative Instruments for a reconciliation of net derivatives to NEE's and FPL's condensed consolidated balance sheets.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)



	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)


(b)	Includes restricted cash of approximately $164 million ($120 million for FPL) in other current 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)	See Note 2 - Fair Value of Derivative Instruments for a reconciliation of net derivatives to NEE's and FPL's condensed consolidated balance sheets.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Significant Unobservable Inputs Used in Recurring Fair Value Measurements - The valuation of certain commodity contracts requires the use of significant unobservable inputs. All forward price, implied volatility, implied correlation and interest rate inputs used in the valuation of such contracts are directly based on third-party market data, such as broker quotes and exchange settlements, when that data is available. If third-party market data is not available, then industry standard methodologies are used to develop inputs that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Observable inputs, including some forward prices, implied volatilities and interest rates used for determining fair value are updated daily to reflect the best available market information. Unobservable inputs which are related to observable inputs, such as illiquid portions of forward price or volatility curves, are updated daily as well, using industry standard techniques such as interpolation and extrapolation, combining observable forward inputs supplemented by historical market and other relevant data. Other unobservable inputs, such as implied correlations, customer migration rates from full requirements contracts and some implied volatility curves, are modeled using proprietary models based on historical data and industry standard techniques.

All price, volatility, correlation and customer migration inputs used in valuation are subject to validation by the Trading Risk Management group. The Trading Risk Management group performs a risk management function responsible for assessing credit, market and operational risk impact, reviewing valuation methodology and modeling, confirming transactions, monitoring approval processes and developing and monitoring trading limits. The Trading Risk Management group is separate from the transacting group. For markets where independent third-party data is readily available, validation is conducted daily by directly reviewing this market data against inputs utilized by the transacting group, and indirectly by reviewing daily risk reports. For markets where independent third-party data is not readily available, additional analytical reviews are performed on at least a quarterly basis. These analytical reviews are designed to ensure that all price and volatility curves used for fair valuing transactions are adequately validated each quarter, and are reviewed and approved by the Trading Risk Management group. In addition, other valuation assumptions such as implied correlations and customer migration rates are reviewed and approved by the Trading Risk Management group on a periodic basis. Newly created models used in the valuation process are also subject to testing and approval by the Trading Risk Management group prior to use and established models are reviewed annually, or more often as needed, by the Trading Risk Management group.

On a monthly basis, the Exposure Management Committee (EMC), which is comprised of certain members of senior management, meets with representatives from the Trading Risk Management group and the transacting group to discuss NEE's and FPL's energy risk profile and operations, to review risk reports and to discuss fair value issues as necessary. The EMC develops guidelines required for an appropriate risk management control infrastructure, which includes implementation and monitoring of compliance with Trading Risk Management policy. The EMC executes its risk management responsibilities through direct oversight and delegation of its responsibilities to the Trading Risk Management group, as well as to other corporate and business unit personnel.

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, 2017 are as follows:



	Fair Value at				Valuation	Significant
Transaction Type	September 30, 2017				Technique(s)	Unobservable Inputs	Range
	Assets		Liabilities
	(millions)
Forward contracts - power	$	860	$	263	Discounted cash flow	Forward price (per MWh)	$—	—	$87
Forward contracts - gas	28		14		Discounted cash flow	Forward price (per MMBtu)	$1	—	$6
Options - power	48		19		Option models	Implied correlations	1%	—	100%
						Implied volatilities	8%	—	227%
Options - primarily gas	149		195		Option models	Implied correlations	1%	—	100%
						Implied volatilities	1%	—	104%
Full requirements and unit contingent contracts	325		11		Discounted cash flow	Forward price (per MWh)	$(19)	—	$206
						Customer migration rate^(a)	—%	—	20%
Total	$	1,410	$	502

———————————————


(a)	Applies only to full requirements contracts.

NEXTERA ENERGY, INC. AND FLORIDA POWER & LIGHT COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

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.

FLORIDA POWER & LIGHT CO 10-Q