NEE 10-K & 10-Q changes, risk factors and insider trading

The operations of NEE and FPL are subject to complex and comprehensive federal, state and other regulation. This extensive regulatory framework, portions of which are more specifically identified in the following risk factors, regulates, among other things and to varying degrees, NEE's and FPL's industry, businesses, operations, and rates and cost structures, including: siting, permitting, planning, construction and operation of electric generation, storage, transmission and distribution facilities and natural gas, oil and other fuel production, transportation, processing and storage facilities; acquisitions, disposals, depreciation and amortization of facilities and other assets; decommissioning costs and funding; service reliability; wholesale and retail competition; and commodities trading and derivatives transactions. In their business planning and in the management of their operations, NEE and FPL must address the effects of regulation on their business and any inability or failure to do so adequately could have a material adverse effect on their business, financial condition, results of operations and prospects.

FPL operates as an electric utility and is subject to the jurisdiction of the FPSC over a wide range of business activities, including, among other items, the retail rates charged to its customers through base rates and cost recovery clauses, the terms and conditions of its services, procurement of electricity for its customers and fuel for its plant operations, issuances of securities, and aspects of the siting, permitting, planning, construction and operation of its generationgeneration, plants andstorage, transmission and distribution systemsfacilities for the sale of electric energy. The FPSC has the authority to disallow recovery by FPL of costs that it considers excessive or imprudently incurred, including those incurred to transition to lower carbon emission technology, and to determine the level of return that FPL is permitted to earn on invested capital. The regulatory process, which may be adversely affected by the geopolitical, political, regulatory, operational and economic environment in Florida and elsewhere, limits or could otherwise adversely impact NEE's and FPL's earnings. The regulatory process also does not provide any assurance as to achievement of authorized or other earnings levels, or that FPL will be permitted to earn an acceptable return on capital investments it wishes to make. NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected if any material amount of costs, a return on certain assets or a reasonable return on invested capital cannot be recovered through base rates, cost recovery clauses, other regulatory mechanisms or otherwise. Certain other subsidiaries of NEENEE, such as subsidiaries of NEET, are utilities subject to the ratemaking jurisdiction of theirFERC, regulatorsthe PUCT or the OEB and are subject to similar risks.

Any reductions or modifications to, or the elimination of, governmental incentives or policies that support clean energy, including, but not limited to, tax laws, policies and incentives, RPS and feed-in-tariffs, or changes in or the imposition of additional taxes, tariffs, duties or other costs or assessments on clean energy or the equipment necessary to generate, store or deliver it, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new clean energy projects, NEE and FPL abandoning the development of clean energy projects, a loss of investments in clean energy projects and reduced project returns, any of which could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.

NEE depends heavily on government policies that support clean energy and enhance the economic feasibility of developing and operating clean energy projects in regions in which NEER and FPL operate or plan to develop and operate such facilities. The federal government, a majority of state governments in the U.S. and portions of Canada provide incentives, such as tax incentives, RPS or feed-in-tariffs, that support or are designed to support the sale of energy from clean energy facilities, such as wind and solar energy facilities and energy storage facilities. The development of clean energy projects at acceptable prices has not historically been burdened by actions taken by the U.S. government. However, as a result of budgetary constraints, geopolitical factors, political factors or otherwise, governments from time to time may review their laws and policies that support, or do not overly burden, the development and operation of clean energy facilities and, instead, consider actionsor take actions, such as the OBBBA and related governmental actions, that make or would make the laws and policies less conducive to the development and operation of such projects. Any reductions or modifications to, or the elimination of, governmental incentives or policies that support clean energy, such as PTCsenergy or ITCs,changes in or the imposition of additional taxes, tariffs, duties or other costs or assessments on clean energy or the equipment necessary to generate, store or deliver it, such as policies in place that limit certain imports from China and other Southeast Asian countries, could result in, among other items, higher equipment costs, scarcity of equipment, the lack of a satisfactory market for the development and/or financing of new clean energy projects, NEE and FPL abandoning the development of clean energy projects, a loss of investments in the projects and reduced project returns, any 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 could be materially adversely affected by a variety of legal activity, such as: 1) the adoption of new or revised laws, such as international trade laws, regulations and interpretations; 2) constitutional ballot or regulatory initiatives, such as those seeking deregulation or restructuring of the energy industry; 3) new or revised regulations, such as those affecting the commodities trading and derivatives markets, emissions, water consumption, water discharges, wetlands, gas and oil infrastructure operations, and environmental and other permitting requirements for energy infrastructure projects; 4) actions taken, or not taken, by government agencies as a result of executive orders, such as failing to issue, delaying the issuance of, or increasing the requirements necessary to obtain approvals, rights-of-way, permits, determinations, leases or loans related to wind or other clean energy projects; and 5) changes in the way government interprets or applies laws, regulations and orders. Changes in the nature of the regulation of NEE's and FPL's business through this type or other types of legal activityactivity, such as the repeal, revocation or reversal of existing laws, regulations or actions, could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects. NEE and FPL are unable to predict future legislative, regulatory or executive action or inaction, including through constitutional ballot initiatives or changed government interpretations or applications, although any such changes may increase costs, the challenges associated with developing and operating clean and other energy infrastructure projects, and competitive pressures on NEE and FPL, which could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.

FPL has limited, but growing, competition in the Florida market for retail electricity customers and is not subject to aan RPS. Any changes in Florida law or regulation, whether through newnew, modified, repealed or modifiedoverturned legislation, regulation or executive action or through citizen-approved state constitutional ballot initiatives, which increase competition in the Florida retail electricity market, such as government incentives that would further facilitate the installation of solar generation facilities on residential or other rooftops,rooftops or would permit third-party sales of electricity or would mandate the transition to renewable energy at FPL,electricity, could have a material adverse effect on FPL's business, financial condition, results of operations and prospects. FPL and NEER are also regulated by FERC as transmission providers and sellers of wholesale power. FERC regulation of transmission and wholesale power transactions, including the ability of new energy infrastructure projects to interconnect to the transmission grid and sell the power they produce under power purchase agreements,produce, evolves over time as a result of rulemaking proceedings and new legislative directives from Congress. There can be no assurance that FPL or NEER would be able to respond adequately to the aforementioned state and federal regulatory changes, which could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.

FPL and NEER are also subject to FERC rules related to transmission that are designed to facilitate competition in the wholesale market on practically a nationwide basis and that evolve over time. NEE cannot predict the impact of changing FERC rules or policies of the RTOs and ISOs, such as existing or potential future rules governing economic dispatch, generator and load interconnection procedures andprocedures, transmission planning requirementsrequirements, cost allocation methodologies and cost allocationrecovery methodologies,policies, or the effect of changes in levels of wholesale supply and demand, which are typically driven by factors beyond NEE's control. There can be no assurance that FPL or NEER will be able to respond adequately or sufficiently quickly to such rules and developments, which may impact the ability, timeline and cost ofto interconnectinginterconnect new or repowered energy projects to the transmission system and the availability of transmission system capacity to deliver energy products to market, or to any changes that reverse or restrict the competitive restructuring of the energy industry in those jurisdictions in which such restructuring has occurred. Any of these events could have a material adverse effect on NEE's business, financial condition, results of operations and prospects.

The structure of the energy industry and regulation in the U.S. is currently, and may continue to be, subject to challenges and restructuring proposals. Additional regulatory approvals may be required due to changes in law or for other reasons. NEE expects the laws and regulationregulations applicable to its business and the energy industry, including laws and regulations generally supportive of clean energy project development, generally to be in a state of transition for the foreseeable future. Changes in the structure of the industry or in such laws and regulations could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.

NEE and FPL are subject to domestic environmental laws, regulations and other standards, including, but not limited to, extensive federal, state and local environmental statutes, rules and regulations relating to air quality, water quality and usage, soil quality, climate change, greenhouse gas emissions, waste management, hazardous wastes, marine, avian, bat and other wildlife mortality and habitat protection, historical artifact preservation, natural resources, health (including, but not limited to, electric and magnetic fields from power lines and substations), safetysafety, fire prevention and RPS, that could, among other things, prevent or delay the development of powerelectric generation, storagestorage, transmission and transmission,distribution facilities, gas transportation, or other development projects, restrict or enjoin the output of some existing facilities, limit the availability and use of some fuels required for the production of electricity, require additional pollution control and fire prevention equipment, and otherwise increase costs, increase capital expenditures and limit or eliminate certain operations. Certain subsidiaries of NEE are also subject to foreign environmental laws, regulations and other standards and, as such, are subject to similar risks.

There can be no assurance that NEE or FPL would be able to completely recover any such costs or investments, which could have a material adverse effect on theirits business, financial condition, results of operations and prospects.

NEE's and FPL's operations and businesses are subject to extensive federal, state and local government regulation, which generally imposes significant and increasing compliance costs on their operations and businesses.costs. Additionally, any actual or alleged compliance failures could result in significant costs and other potentially adverse effects of regulatory investigations, proceedings, settlements, decisions and claims, including, among other items, potentially significant monetary penalties. As an example, under the Energy Policy Act of 2005, NEE and FPL, as owners and operators of bulk-power transmission systems and/or electric generation facilities, are subject to mandatory reliability standards. Compliance with these mandatory reliability standards may subject NEE and FPL to higher operating costs and may result in increased capital expenditures. If FPL or NEE is found not to be in compliance with these standards, they may incur substantial monetary penalties and other sanctions. In addition, certain of NEE's and FPL's sales to retail customers are subject to consumer protection laws and other regulations related to consumer activities that are implemented and enforced by a number of federal, state and local government entities. Both the costs of regulatory compliance and the costs that may be imposed as a result of any actual or alleged compliance failures could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.

Changes in tax laws, guidance or policies, including but not limited toto, changes in corporate income tax rates,rates and the qualifications for clean energy tax credits, 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 provision for income taxes and reporting of tax-related assets and liabilities require significant judgments and the use of estimates. Amounts of tax-related assets and liabilities involve judgments and estimates of the timing and probability of recognition of income, deductions and tax credits, including, but not limited to, estimates for potential adverse outcomes regarding tax positions that have been taken and the ability to utilize tax benefit carryforwards, such as net operating loss and tax credit carryforwards. Actual income taxes could vary significantly from estimated amounts due to the future impacts of, among other things, changes in tax laws, guidance or policies, including, but not limited to, changes in corporate income tax rates, renewableclean energy tax credits and transferability of renewableclean energy tax credits, the issuance of guidance related to the qualification for renewableclean energy tax credits and bonus credits, the financial condition and results of operations of NEE and FPL and the resolution of audit issues raised by taxing authorities. These factors, including the ultimate resolution of income tax matters, may result in material adjustments to tax-related assets and liabilities, which 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.

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, storage, transmission and distribution facilities, natural gas and oil production and transportation facilities orand other facilities on schedule or within budget.

NEE's and FPL's ability to proceed with projects under development and to complete construction of, and capital improvement projects for, their electric generation, storage, transmission and distribution facilities, natural gas and oil production and transportation facilities and other facilities on schedule and within budget have been, from time to time, and in the future may be, adversely affected by timely availability of equipment and labor, escalating costs for materials andmaterials, labor and regulatory compliance, inability to obtainobtain, maintain or renew necessary licenses, rights-of-way, permits or other approvals on acceptable terms or on schedule, disputes involving contractors, labor organizations, land owners, governmental entities, environmental groups, Native American and aboriginal groups, lessors, joint venture partners, suppliers and other third parties, negative publicity, transmission interconnection issues, geopolitical factors, supply chain disruptions, inflation, rising interest rates and other factors. For example, the ability of NEE and FPL to develop solarcertain generation and battery storage facilities is dependent on the international supply chain for solargeneration panels,equipment, batteries and other associated equipment, and governmental or regulatory actions have caused minor, and could in the future cause material, disruptions in the ability of NEE and FPL to acquire solarcertain panelsgeneration equipment and batteries on time and at acceptable costs. If any development project or construction or capital improvement project is not completed, is delayed or is subject to cost overruns, certain associated costs may not be approved for recovery or otherwise be recoverable through regulatory mechanisms that may be available, and NEE and FPL could become obligated to make delay or termination payments or become obligated for other damages under contracts, could experience the loss, or reduction, of tax credits, bonus credits or tax incentives, the inability to transfer tax credits, or delayed or diminished returns, and could be required to write off all or a portion of their investment in the project. Any of these events could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.

NEE and FPL 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.

NEE and FPL own, develop, construct, manage and operate electric generation, storagestorage, transmission and transmissiondistribution facilities and natural gas pipelines. A key component of NEE's and FPL's growth is their ability to site, permit, construct and operate generation, storage, transmission and distribution facilities and natural gas pipelines to meet customer needs. As part of these operations, NEE and FPL must periodically apply for licenses and permitspermits, including those related to project siting, from various local, state, federal and other regulatory authorities and abide by their respective conditions. Should NEE or FPL be unsuccessful in obtaining or maintaining necessary licenses or permits on acceptable terms or resolving third-party challenges to such licenses or permits, should there be any delay in obtaining or renewing necessary licenses or permits or should regulatory authorities initiate any associated investigations or enforcement actions or impose related penalties or disallowances on NEE or FPL, NEE's and FPL's business, financial condition, results of operations and prospects could be materially adversely affected. Any failure to negotiate successful project development agreements for new facilities with third parties could have similar consequences.

NEE's and FPL's electric generation, storage, transmission and distribution facilities, natural gas and oil production and transportation facilities and other facilities are subject to many operational uncertainties and risks. Operational uncertainties and risks could result in, among other things, lost revenues due to prolonged outages, increased expenses due to monetary penalties or fines for compliance failures or legal claims, liability to third parties for property and personal injury damage or loss of life, unsatisfied customers, a failure to perform under applicable power sales agreements or other agreements and associated loss of revenues from terminated agreements or liability for liquidated damages under continuing agreements, and replacement equipment costs or an obligation to purchase or generate replacement power at higher prices.

Uncertainties and risks inherent in operating and maintaining NEE's and FPL's facilities that could cause these results include, but are not limited to:

•breakdown or failure, including, but not limited to, explosions, fires, leaks or other major events,failure of equipment, transmission or distribution systems or pipelines whether as a result of explosions, fires, leaks, other events or otherwise;

•lack of availability of replacement equipment;

•risks of property damage, human injury or loss of life from energized equipment, hazardous substances or explosions, fires, leaks or other events, especiallyincluding where facilities are located near populated areas;

•lack of availability of adequate water resources and ability to satisfy water intake and discharge requirements;

Growth in customer accounts and growth of customer usage each directly influence the demand for electricity and the need for additional power generation and power delivery facilities, as well as the need for energy-related commodities, such as natural gas. Customer growth and customer usage are affected by a number of factors outside the control of NEE and FPL, such as mandated energy efficiency measures, demand side management requirements, installation of distributed generation technologies and economic and demographic conditions, such as population changes, job and income growth, housing starts, new business formation, expanded use of data centers, inflation and the overall level of economic activity. A lack of growth, or a decline, in the number of customers or in customer demand for electricity or natural gas and other fuels may cause NEE and FPL to fail to fully realize the anticipated benefits from significantpending and planned future investments and expenditures and could have a material adverse effect on NEE's and FPL's growth, business, financial condition, results of operations and prospects.

Weather conditions directly influence the demand for electricity and natural gas and other fuels and affect the price of energy and energy-related commodities. In addition, severe weather and natural disasters, such as hurricanes, floods, tornadoes, droughts, extreme temperatures, icing events, wildfires, severe convective storms and earthquakes, can be destructive and cause power outages, personal injury and property damage, reduce revenue, affect the availability of fuel and water, and require NEE and FPL to incur additional costs, for example, to restore service and repair damaged facilities, to obtain replacement power, to access available financing sources, to obtain insurance, to pay for any associated injuries and damages and to fund any associated legal matters and compliance penalties. Furthermore, NEE's and FPL's physical plants could be placed at greater risk of damage should changesthere in the global climate producebe unusual variations in temperature and weather patterns, resulting in more intense, frequent and extreme weather events, abnormal levels of precipitation and, particularly relevant to FPL, a change in sea level. For example, FPL operates in the east and lower west coasts of Florida and in northwest Florida, areas that historically have been prone to severe weather events, such as hurricanes. A disruption or failure of electric generation, storage, transmission or distribution systems or natural gas production, transmission, storage or distribution systems in the event of a hurricane, tornado or other severe weather event, or otherwise, could prevent NEE and FPL from operating their business in the normal course and could result in any of the adverse consequences described above. Additionally, the actions taken to address the potential for severe weather such as additional winterizing of critical equipment and infrastructure, modifying or alternating plant operations and expanding load shedding options could result in significant increases in costs. Any of the foregoing could have a material adverse effect on NEE's and FPL's business, financial condition, results of operations and prospects.

NEE and FPL are subject to the potentially adverse operating and financial effects of geopolitical factors, terrorist acts and threats, as well as cyberattacks and other disruptive activities of individuals or groups. There have been cyberattacks and other physical attacks within the energy industry on energy infrastructure such as substations, gas pipelines and related assets in the past and there may be such attacks in the future. In addition, the advancement of artificial intelligence has given rise to added vulnerabilities and potential entry points for cyberattacks. NEE's and FPL's electric generation, transmission,storage, storagetransmission and distribution facilities, information technology systems and other infrastructure facilities and systems could be direct targets of, or otherwise be materially adversely affected by, such activities.

Geopolitical factors, terrorist acts, cyberattacks or other similar events affecting NEE's and FPL's systems and facilities, or those of third parties on which NEE and FPL rely, could harm NEE's and FPL's businesses by, for example, limiting their ability to generate, purchase, store or transmit power, natural gas or other energy-related commodities, limiting their ability to bill customers and collect and process payments, and delaying their development and construction of new electric generation, distribution,storage, storagedistribution or transmission facilitiesassets or capital improvements to existing facilities. These events, and governmental actions in response, could result in a material decrease in revenues, significant additional costs (for example, to repair assets, implement additional security requirements or maintain or acquire insurance), significant fines and penalties, and reputational damage, could materially adversely affect NEE's and FPL's operations (for example, by contributing to disruption of supplies and markets for natural gas, oil and other fuels), and could impair NEE's and FPL's ability to raise capital (for example, by contributing to financial instability and lower economic activity). In addition, the implementation of security guidelines and measures has resulted in, and is expected to continue to result in, increased costs. Such events or actions may materially adversely affect NEE's and FPL's business, financial condition, results of operations and prospects.

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

NEER provides full energy and capacity requirements services primarily to distribution utilities, which include load-following services and various ancillary services, to satisfy all or a portion of such utilities' power supply obligations to their customers. The supply costs for these transactions may be affected by a number of factors, including, but not limited to, events that may occur after such utilities have committed to supply power, such as weather conditions, transmission constraints, fluctuating prices for, and locational disconnects in, energy and ancillary services, and the ability of the distribution utilities' customers to elect to receive service from competing suppliers. If any of these factors materialize, NEERcosts to supply services may notexceed revenues generated or be ablebelow toexpected recoverreturn all of its increased supply costs,levels, which could have a material adverse effect on NEE's business, financial condition, results of operations and prospects.

Due to the potential for significant volatility in market prices for fuel, electricityelectricity, transmission rights and environmental and other energy-related commodities, NEE's inability or failure to manage properly or hedge effectively the commodity risks within its portfolio could materially adversely affect NEE's business, financial condition, results of operations and prospects.

There can be significant volatility in market prices for fuel, electricityelectricity, transmission rights and environmental and other energy-related commodities, both in general and across geographies. NEE's inability or failure to manage properly or hedge effectively its assets or positions against changes in commodity prices, volumes, interest rates, counterparty credit risk or other risk measures, based on factors that are either within, or wholly or partially outside of, NEE's control, may materially adversely affect NEE's business, financial condition, results of operations and prospects.

Subsidiaries of NEE, including FPL, depend upon power transmission and natural gas, nuclear fuel and other commodity transportation operations, many of which they do not own or control. Occurrences affecting these operations that may or may not be beyond the control of subsidiaries of NEE, including FPL, (such as geopolitical factors, cyber incidents, physical attacks, severe weather or a generation or transmission facilityasset outage, pipeline rupture, or sudden and significant increase or decrease in wind or solar generation) may limit or halt their ability to sell and deliver power and natural gas, or to purchase necessary fuels and other commodities, which could materially adversely impactaffect NEE's and FPL's business, financial condition, results of operations and prospects.

If any customer, vendor or hedging or other counterparty fails to fulfill its contractual obligations, NEE and FPL may need to make arrangements with other counterpartiescounterparties, customers or vendors, which could result in material financial losses, higher costs, untimely completion of powerelectric generation or storage facilities and other projects, or a disruption of their operations. If a defaulting counterparty is in poor financial condition, NEE and FPL may not be able to recover damages for any contract breach.

NEE and FPL use derivative instruments, such as swaps, options, futures and forwards, some of which are traded in the OTC markets or on exchanges, to manage their commodity and financial market risks, and for NEE to engage in commodity trading and marketing activities. Any failures by their counterparties to perform or make payments in accordance with the terms of those transactions could have a material adverse effect on NEE's or FPL's business, financial condition, results of operations and prospects. Similarly, any requirement for FPLNEE or NEEFPL to post margin cash collateral under its derivative contracts could have a material adverse effect on its business, financial condition, results of operations and prospects. These risks may be increased during periods of adverse market or economic conditions such as inflation affecting the industry in which NEE and FPL participate.

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

NEE and FPL operate in a highly regulated industry that requires the continuous functioning of sophisticated information technology systems and network infrastructure. Despite NEE's and FPL's implementation of security measures, all of their technology systems are vulnerable to disability, failures or unauthorized access. If NEE's or FPL's information technology systems were to fail or be breached, sensitivesensitive, confidential and other data could be compromised and NEE and FPL could be unable to fulfill critical business functions.

NEE and FPL add, modify and replace information systems on a regular basis. Modifying existing information systems or implementing new or replacement information systems is costly and involves risks, including, but not limited to, integrating the modified, new or replacement system with existing systems and processes, implementing associated changes in accounting procedures and controls, and ensuring that data conversion is accurate and consistent. Any disruptions or deficiencies in existing information systems, or disruptions, delays or deficiencies in the modification or implementation of new information systems, could result in increased costs, the inability to track or collect revenues and the diversion of management's and employees' attention and resources, and could negatively impact the effectiveness of theNEE's companies'and FPL's control environment, and/or the companies'their ability to timely file required regulatory reports.reports which could materially adversely affect their business, financial condition, results of operations and prospects.

NEE's and FPL's nuclear generation facilities are subject to environmental, health and financial risks, including, but not limited to, those relating to site storage of spent nuclear fuel, the disposition of spent nuclear fuel, leakage and emissions of tritium and other radioactive elements in the event of a nuclear accident or otherwise, the threat of a terrorist attack or cyber incident and other potential liabilities arising out of the ownership or operation of the facilities. NEE and FPL maintain decommissioning funds and external insurance coverage which are intended to reduce the financial exposure to some of these risks; however, the cost of decommissioning nuclear generation facilities could exceed the amount available in NEE's and FPL's decommissioning funds, and the exposure to liability and property damages could exceed the amount of insurance coverage. If NEE or FPL is unable to recover the additional costs incurred through insurance or, in the case of FPL, through regulatory mechanisms, theirits business, financial condition, results of operations and prospects could be materially adversely affected.

If any of NEE's or FPL's nuclear generation facilities are not operated for any reason through the life of their respective operating licenses or planned license extensions, NEE or FPL may be required to increase depreciation rates, incur impairment charges and accelerate future decommissioning expenditures, any of which could materially adversely affect theirits business, financial condition, results of operations and prospects.

NEE and FPL rely on access to capital and credit markets as significant sources of liquidity for capital requirements, refinancing activities to support existing debt maturities and other requirements that are not satisfied by operating cash flows. Disruptions, uncertainty or volatility in those capital and credit markets related to,to amongor others,caused by inflation, rising or sustained higher interest rates andrates, political, regulatory and geopolitical events,events or other factors could increase NEE's and FPL's cost of capital and affectlimit or eliminate their ability to fund their liquidity and capital needs, to refinance existing indebtedness and to meet their growth objectives. If NEE or FPL is unable to access regularly the capital and credit markets on terms that are reasonable,as expected, it may have to delay raising capital, issue shorter-term securities andsecurities, incur an unfavorable cost of capital,capital or reduce or eliminate planned investments, which, in turn, could adversely affect its ability to maintain and grow its business, could contribute to lower earnings andor result in losses or reduced financial flexibility,flexibility and could have a material adverse effect on its business, financial condition, liquidity, results of operations and prospects.

Although certain NEE subsidiaries have used non-recourse or limited-recourse, project-specific or other financing structures or arrangements in the past, market conditions, changes to regulatory capital requirements, credit ratings requirements and other factors could adversely affect the future availability of such financing.financing, structures or arrangements. The inability of NEE's subsidiaries, including, without limitation, NEECH and its subsidiaries, to access the capital and credit markets to provide project-specific or other financing for electric generation or other facilities or acquisitions on favorable terms, whether because of disruptions or volatility in those markets or otherwise, could necessitate additional capital raising or borrowings by NEE and/or NEECH in the future and there can be no assurance that NEE or NEECH will have the ability to complete such financings.

NEE's consolidated and unconsolidated subsidiaries finance a number of their assets with project-specific, limited-recourse financings. The inability of subsidiaries that have existing project-specific or other financing arrangements to meet the requirements of various agreements relating to those financings, as well as actions by third parties or lenders, could give rise to a project-specific financing default which, if not cured or waived, might result in the specific project, and potentially in some limited instances its parent companies, being required to repay the associated debt or other borrowings earlier than otherwise anticipated. If such repaymentrepayments were not made, the lenders or security holders would generally have rights to foreclose against the project assets and related collateral. Such an occurrence also could result in NEE expending additional funds or incurring additional obligations over the shorter term to ensure continuing compliance with project-specific financing arrangements based upon the expectation of improvement in the project's performance or financial returns over the longer term. Any of these actions could materially adversely affect NEE's business, financial condition, liquidity, results of operations and prospects, as well as the availability or terms of future financings for NEE or its subsidiaries.

The inability of NEE, NEECH and FPL to maintain their current credit ratings could materially adversely affect their ability to raise capital or obtain credit on favorable terms, which, in turn, would likely increase their interest costs and could impact NEE's and FPL's ability to raise capital to grow and otherwise fund their businessesbusinesses, andincluding, without limitation, to service indebtedness and refinance or repay borrowings, and would likely increase their interest costs.borrowings. In addition, certain agreements and guarantee arrangements would require posting of additional collateral in the event of a ratings downgrade. Some of the factors that can affect credit ratings are cash flows, liquidity, the amount of debt as a component of total capitalization including rating agencies' treatment of certain indebtedness, NEE's overall business mix and political, legislative and regulatory actions. There can be no assurance that one or more of the ratings of NEE, NEECH and FPL will not be lowered or withdrawn entirely by a rating agency.

NEE's and FPL's liquidity may be impairedreduced if their credit providers are unable to fund their credit commitments to theNEE, companiesNEECH or FPL or to maintain their current credit ratings.

NEE has invested in various joint ventures and equity method investments where it does not have full control over operations, management or decision-making. In many cases, NEE shares control rights with its partners, but may lack influence or be dependent on their business priorities. This situation can lead to decisions that differ from NEE's preferences, potentially impacting the profitability and value of these investments. Furthermore, if a joint venture partner becomes insolvent or bankrupt or is otherwise unable to meet its obligations, NEE may be responsible for meeting certain obligations of the joint ventures as stipulated in its governing documents or applicable law. NEE's reliance on the joint venture partners, whopartners may not always share NEE's business priorities,priorities which may have a material adverse effect on 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 dividendsdividends, make distributions or repay funds to NEE.

NEE is a holding company and, as such, has no material operations of its own. Substantially all of NEE's consolidated assets are held by its subsidiaries. NEE's ability to meet its financial obligations, including, but not limited to, its guarantees, and to pay dividends on its common stock is primarily dependent on its subsidiaries' net income and cash flows, which are subject to the risks of their respective businesses, and their ability to pay upstream dividendsdividends, make distributions or to repay funds to NEE.

NEE's subsidiaries are separate legal entities and have no independent obligation to provide NEE with funds for its payment obligations. The subsidiaries have financial obligations,obligations themselves, including, but not limited to, payment of debt service, which they must satisfy before they can provide NEE with funds.funds or make other payments to NEE. In addition, in the event of a subsidiary's liquidation or reorganization, NEE's right to participate as an equity holder in a distribution of assets is subject to the prior claims of the subsidiary's creditors.

The dividend-paying ability of some of the subsidiaries to pay dividends or make certain other payments is limited by contractual restrictions which are contained in outstanding financing agreements and which may be included in future financing agreements. The future enactment of laws or regulations also may prohibit or restrict the ability of NEE's subsidiaries to pay upstream dividendsdividends, make distributions or to repay funds.

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 financial obligations of its subsidiaries.

NEE guarantees many of the financial obligations of its consolidated subsidiaries, other than FPL, through guarantee agreements with NEECH. These guarantees may require NEE to provide substantial funds to its subsidiaries or their creditors or counterparties at a time when NEE is in need of liquidity to meet its own financial obligations. Funding such guarantees may materially adversely affect NEE's ability to meet its financial obligations or to pay dividends.

NEE’s operating performance is driven primarily by the operations of its two principal businesses, FPL, which serves more than six million customer accounts in Florida and is one of the largest electric utilitiesutility in the U.S., and NEER, which together with affiliated entities is one of the world's largest generator of renewable energy frominfrastructure developers in the wind and sun based on 2024 MWh produced on a net generation basis, as well as a world leader in battery storage capacity.U.S. The table below presents net income (loss) attributable to NEE and earnings (loss) per share attributable to NEE, assuming dilution, by reportable segment, FPL and NEER. Corporate and Other is primarily comprised of the operating results of other business activities, as well as other income and expense items, including interest expense, and eliminating entries, and may include the net effect of rounding. See Note 16 for additional segment information. The following discussion should be read in conjunction with the Notes to Consolidated Financial Statements contained herein and all comparisons are with the corresponding items in the prior year.

(a)For 2024,2025, 20232024 and 2022,2023, approximately $28 million of gains, $36 million of losses,losses and $1,729 million of gains and $1,257 million of losses,gains, respectively, are included in NEER's net income; the remaining balance is included in Corporate and Other. The change in non-qualifying hedge activity is primarily attributable to changes in forward power and natural gas prices, interest rates and foreign currency exchange rates, as well as the reversal of previously recognized unrealized mark-to-market gains or losses as the underlying transactions were realized.

(b)See Note 4 – Nonrecurring Fair Value Measurements for a discussion of impairment charges related to the investment in XPLR in 2025, 2024 and 2023.

(c)For 2023, approximately $300 million of gains are included in FPL's net income; the remaining balance is included in NEER. See Note 1 – Disposal of Businesses/Assets for a discussion of the sale of FPL's ownership interest in its Florida City Gas business (FCG).business.

Net income attributable to NEE for 20242025 was lower than 20232024 by $364$111 million, or $0.23$0.07 per share, assuming dilution, due to lower results at NEERCorporate and FPL,Other, partly offset by higher results at CorporateFPL and Other.NEER.

FPL's net income decreased by $9 millionincreased in 20242025 primarily driven by the absence of the gain on sale of FPL's ownership interest in the FCG business in 2023 and a lower earned regulatory ROE in 2024, partly offset by continued investments in plant in service and other property.property and a higher earned regulatory ROE in 2025.

NEER's results decreasedincreased in 20242025 primarily drivenreflecting byhigher unfavorableearnings non-qualifyingfrom hedgenew activity compared to 2023,investments, partly offset by higher earningsfinancing from new investments.costs. In 2024,2025, NEER added approximately 1,3651,604 MW of new wind generating capacity, 2,5072,859 MW of solar generating capacity and 7551,799 MW of battery storage capacity and increased its backlog of contracted renewable development projects.

Corporate and Other's results in 20242025 increaseddecreased primarily related to higher interest expense due to favorableunfavorable non-qualifying hedge activity.activity compared to 2024 as well as higher average debt balances.

Net income attributable to NEE for 20242025 was $6.95$6.84 billion compared to $7.31$6.95 billion in 2023.2024. In 2024,2025, net income attributable to NEE decreased primarily due to lower results at NEERCorporate and FPL,Other, partly offset by higher results at CorporateFPL and Other.NEER. The comparison of the results of operations for the years ended December 31, 20232024 and 20222023 are included in Management's Discussion in NEE's and FPL's Annual Report on Form 10-K for the year ended December 31, 2023.2024.

NEE's effective income tax rate for 20242025 and 20232024 was approximately 6%(18)% and 14%,6%, respectively. The rates for both years reflect the composition of pretax income in 2025 and 2024 as well as the impact of renewableclean energy tax credits. See Note 5.

FPL obtains its operating revenues primarily from the sale of electricity to retail customers at rates established by the FPSC through base rates and cost recovery clause mechanisms. FPL’s net income for 20242025 and 20232024 was $4,543$5,012 million and $4,552$4,543 million, respectively, representing aan decreaseincrease of $9$469 million. The decreaseincrease was primarily driven by the absence of the gain on sale of FPL's ownership interest in the FCG business in 2023 and a lower earned regulatory ROE in 2024, partly offset by higher earnings from investments in plant in service and other property. Such investments grew FPL's average rate base by approximately $6.1$5.5 billion in 20242025 and reflect, among other things, solar generation additions and ongoing transmission and distribution additions. The increase was also due to a higher earned regulatory ROE in 2025.

InDuring December2025, 2024,FPL the FPSC approved FPL's request to begincompleted a twelve-month interim storm restoration surcharge tothat recoverbegan in January 2025 for eligible storm restoration costs and replenishthe replenishment of the storm reserve totalingof approximately $1.2 billion for twelve months beginning in January 2025,billion, related to Hurricanes Debby, Helene and Milton which impacted FPL's service area in 2024. The amount collected is subject to refund based on an FPSC prudence review. During 2024, FPL completed a twelve-month interim storm restoration surcharge that began in April 2023 for eligible storm restoration costs and the replenishment of the storm reserve of approximately $1.3 billion, primarily related to Hurricanes Ian and Nicole which impacted FPL's service area in 2022. See Note 1 – Storm Funds, Storm Reserves and Storm Cost Recovery.

The use of reserve amortization iswas permitted by the 2021 rate agreement. See Item 1. Business – FPL – FPL Regulation – FPL Electric Rate Regulation – Base Rates – Base Rates Effective January 2022 through December 2025 for additional information on the 2021 rate agreement. In order to earn a targeted regulatory ROE, subject to limitations associated with the 2021 rate agreement, reserve amortization iswas calculated using a trailing thirteen-month average of retail rate base and capital structure in conjunction with the trailing twelve months regulatory retail base net operating income, which primarily includes the retail base portion of base and other revenues, net of O&M, depreciation and amortization, interest and tax expenses. In general, the net impact of these income statement line items must be adjusted, in part, by reserve amortization to earn the targeted regulatory ROE. In certain periods, reserve amortization iswas reversed so as not to exceed the targeted regulatory ROE. The drivers of FPL's net income not reflected in the reserve amortization calculation typically includeincluded wholesale and transmission service revenues and expenses, cost recovery clause revenues and expenses, AFUDC – equity and revenue and costs not recoverable from retail customers. In 20242025 and 2023,2024, FPL recorded reserve amortization of approximately $328$593 million and $227$328 million, respectively. See Depreciation and Amortization Expense below. FPL's earned regulatory ROE for 20242025 and 20232024 was approximately 11.40%11.70% and 11.80%,11.40%, respectively.

During 2024,2025, operating revenues decreasedincreased $1,346$1,243 million primarily relateddue to lowerhigher storm cost recoveryrecovery, revenuesretail base and lowerstorm fuelprotection plan cost recovery revenues, partly offset by anlower increasefuel incost retail baserecovery revenues.

FPL’s retail base revenues for 20242025 and 20232024 reflect the 2021 rate agreement. Retail base revenues increased approximately $272$222 million during the year ended December 31, 20242025 primarily related to an increase of 1.9%1.7% in the average number of customer accounts and new retail base rates through its SoBRASolar Base Rate Adjustment mechanism under the 2021 rate agreement. The increases were partly offset by a decrease of approximately 0.5%1.2% in the average usage per retail customer primarily driven by unfavorable weather when compared to the prior year. See Note 1 – Rate Regulation.

Revenues from fuel and other cost recovery clauses and pass-through costs, such as franchise fees, revenue taxes and storm-related surcharges, are largely a pass-through of costs. Such revenues also include a return on investment allowed to be recovered through the cost recovery clauses on certain assets, primarily related to certain solar, environmental projects, storm protection plan investments and the unamortized balance of the regulatory asset associated with FPL's acquisition of certaina generation facilities.facility. See Item 1. Business – FPL – FPL Regulation – FPL Electric Rate Regulation – Cost Recovery Clauses. Under-recovery or over-recovery of cost recovery clause and other pass-through costs (deferred clause and franchise expenses and revenues) can significantly affect NEE's and FPL's operating cash flows. TheDuring 2025, the change from a net over-recovery of cost recovery clauses to a net under-recovery of cost recovery clauses at December 31, 2023 to a net over-recovery of cost recovery clauses at December 31, 2024 impactingimpacted FPL's operating cash flows wasby approximately $1,016$89 million, primarily related to lowerhigher fuel prices.

The decreaseincrease in operating revenues in 20242025 reflects lowerhigher storm cost recovery revenues of approximately $1,090$1,091 million primarily associated with the completion of surcharges for Hurricanes IanDebby, Helene and Nicole,Milton, as discussed above.above, as well as an increase of $217 million in revenues from the storm protection plan cost recovery clause as a result of increased investments. The decreaseincrease in operating revenues in 20242025 was alsopartly impactedoffset by a decrease in fuel cost recovery revenues of approximately $526$353 million primarily as a result of lower fuel and energy prices.rates. In 20242025 and 2023,2024, cost recovery clauses contributed approximately $417$497 million and $369$417 million, respectively, to FPL’s net income.

Fuel, PurchasePurchased Power and Interchange Expense

Fuel, purchased power and interchange expense decreased $573$310 million in 20242025 primarily related to lower amortization of deferred fuel andcosts, energypartly prices.offset by higher fuel prices as compared to the prior year.

Depreciation and amortization expense decreasedincreased $962$951 million during 20242025 primarily reflecting lowerhigher amortization of deferred storm costs, primarily associated with Hurricanes IanDebby, Helene and NicoleMilton, as discussed above, of approximately $1,089$1,090 million and lower reserve amortization, partly offset by increased depreciation related to higher plant in service balances.balances, partly offset by the impact of reserve amortization. Reserve amortization, or reversal of such amortization, reflects adjustments to accrued asset removal costs provided under the 2021 rate agreement in order to achieve the targeted regulatory ROE. Reserve amortization is recorded as either an increase or decrease to accrued asset removal costs which is reflected in noncurrent regulatory assets on NEE's and FPL's consolidated balance sheets. AtAs of December 31, 2024,2025, approximately $895$303 million of reserve amortization remains available for future amortization through the RSM under the 20212025 rate agreement.

NEER owns, develops, constructs, manages and operates a diversified portfolio of electric generation and battery storage facilities in wholesale energy markets in the U.S. and CanadaCanada, and also includes assets and investments in other businesses with a clean energy businesses, such as battery storage and natural gas pipelines.focus. NEER also owns, develops, constructs and operates regulated electric and gas transmission assets. In addition, NEER provides full energy and capacity requirements services, engages in energy-related commodity marketing and trading activities, owns, develops, constructsactivities and operates rate-regulated transmission facilities and transmission lines and investsparticipates in natural gas, natural gas liquids and oil production assets.production. NEER’s net income less net loss attributable to noncontrolling interests for 20242025 and 20232024 was $2,299$2,975 million and $3,558$2,299 million, respectively, resulting in aan decreaseincrease in 20242025 of $1,259$676 million. The primary drivers, on an after-tax basis, of the change are in the following table.

(a) Reflects after-tax project contributions, including the net effect of deferred income taxes and other benefits associated with renewableclean energy tax credits for wind, solar and battery storage projects, as applicable (see Note 1 – Income Taxes and – Noncontrolling Interests and Note 5), but excludes allocation of interest expense and corporate general and administrative expenses except for an allocated credit support charge related to guarantees issued to conduct business activities. Results from projects, pipelinesprojects and rate-regulatedregulated gas transmission facilities and transmission linesassets are included in new investments during the first twelve months of operation or ownership. Project results, including repowered wind projects, and pipelineregulated gas transmission assets results are included in existing clean energy and rate-regulated transmission facilities and transmission lines are included in NEET beginning with the thirteenth month of operation or ownership.

Operating revenues for 20242025 decreasedincreased $2,130$1,218 million primarily due to:

•revenues from new investments of $494approximately million.$519 million;

Operating expenses – net for 20242025 increased $932$613 million primarily due to increases of $568$221 million in O&M expenses, $161 million in depreciation and amortization expenses, $175 million in O&M expenses and $119$152 million in fuel, purchased power and interchange expenses. The increases were primarily associated with growth across the NEER businesses and higher depletion related to natural gas and oil production.businesses.

In 2024,2025, the change in gains on disposal of businesses/assets – net primarilyis reflectthe result of lower disposal gains in the current year as compared to the prior year. See Note 1 – Disposal of Businesses for a discussion of gains related to the September 2024 sales of ownership interests in connection with the pipeline joint venture and the renewable assets joint venture. See Note 1 – Disposal of Businesses/Assets.

Equity in Earnings (Losses) of Equity Method Investees

NEER recognized $267$193 million and $649$267 million of equity in losses of equity method investees in 20242025 and 2023,2024, respectively. The change in 20242025 primarily reflects athe 2024impact of an impairment charge of approximately $0.8$0.7 billion ($0.6$0.5 billion after tax) compared to a 20232024 impairment charge of $1.2$0.8 billion ($0.9$0.6 billion after tax) related to the investment in XPLR (see Note 4 – Nonrecurring Fair Value Measurements).

NEER's effective income tax rate for 20242025 and 20232024 was approximately (165343)% and 7%,(165)%, respectively, and is primarily based on the composition of pretax income in 20242025 and 20232024 as well as the impact of renewableclean energy tax credits. PTCs from wind and solar projects and ITCs from solar, battery storage and certain wind projects are included in NEER’s earnings. PTCs are recognized as wind and solar energy is generated and sold based on a per kWh rate prescribed in applicable federal and state statutes. During the year ended December 31, 2024,2025, renewableclean energy tax credits increased by approximately $477$585 million reflecting growth in NEER's business. See Note 1 – Income Taxes for a discussion of renewableclean energy tax credits, Note 5 and Note 16.

Corporate and Other's results increaseddecreased $904$1,256 million during 20242025 primarily due to favorableunfavorable after-tax impacts of approximately $934$1,002 million, as compared to the prior year, related to non-qualifying hedge activity as a result of changes in the fair value of interest rate derivative instruments used to manage interest rate and foreign currency exchange rate risk associated primarily with outstanding and expected future debt issuances and borrowings (see Note 3). as well as higher average debt balances.

NEE and its subsidiaries require funds to support and grow their businesses. These funds are used for, among other things, working capital (see Note 1 – Storm Funds, Storm Reserves and Storm Cost Recovery),capital, capital expenditures (see Note 15 – Commitments), investments in or acquisitions of assets and businesses (see Note 6), payment of maturing debt and related derivative obligations (see Note 13 and Note 3) and, from time to time, redemption or repurchase of outstanding debt or equity securities. It is anticipated that these requirements will be satisfied through a combination of cash flows from operations, short- and long-term borrowings, the issuance of short- and long-term debt (see Note 13) and, from time to time, equity securities, proceeds from differential membership investors, sales of renewableclean energy tax credits (see Note 1 – Income Taxes) and sales of ownership interests in assets/businesses (see Note 1 – Disposal of Businesses/Assets), consistent with NEE’s and FPL’s objective of maintaining, on a long-term basis, a capital structure that will support a strong investment grade credit rating. NEE, FPL and NEECH rely on access to credit and capital markets as significant sources of liquidity for capital requirements and other operations that are not satisfied by operating cash flows. The inability of NEE, FPL and NEECH to maintain their current credit ratings could affect their ability to raise short- and long-term capital, their cost of capital and the execution of their respective financing strategies, and could require the posting of additional collateral under certain agreements.

In October 2015, NEE authorized a program to purchase, from time to time, up to $150 million of common units representing limited partner interests in XPLR. Under the program, purchases may be made in amounts, at prices and at such times as NEE or its subsidiaries deem appropriate, all subject to market conditions and other considerations. The purchases may be made in the open market or in privately negotiated transactions. Any purchases will be made in such quantities, at such prices, in such manner and on such terms and conditions as determined by NEE or its subsidiaries in their discretion, based on factors such as market and business conditions, applicable legal requirements and other factors. The common unit purchase program does not require NEE to acquire any specific number of common units and may be modified or terminated by NEE at any time. The purpose of the program is not to cause XPLR’s common units to be delisted from the New York Stock Exchange or to cause the common units to be deregistered with the SEC. As of December 31, 2024,2025, the dollar value of units that may yet be purchased by NEE under this program was $114 million. AtAs of December 31, 2024,2025, NEE had an approximately 52.6%52.5% noncontrolling interest in XPLR, primarily through its limited partner interest in XPLR OpCo.

AtAs of December 31, 2024,2025, NEE's total net available liquidity was approximately $18.0$18.7 billion. The table below provides the components of FPL's and NEECH's net available liquidity atas of December 31, 2024.2025.

(a) Provide for the funding of loans up to the amount of the credit facility and the issuance of letters of credit up to $3,200 million ($450 million for FPL and $2,750 million for NEECH). The entire amount of the credit facilities is available for general corporate purposes and to provide additional liquidity in the event of a loss to the companies’ or their subsidiaries’ operating facilities (including, in the case of FPL, a transmission and distribution property loss). FPL’s syndicated revolving credit facilities are also available to support the purchase of $1,663$1,566 million of pollution control, solid waste disposal and industrial development revenue bonds in the event they are tendered by individual bondholders and not remarketed prior to maturity as well as the repayment of approximately $1,979$1,975 million of floating rate notes in the event an individual noteholder requires repayment at specified dates prior to maturity. As of December 31, 2024, approximately $575 million of FPL's and $5,422 million of NEECH's syndicated revolving credit facilities expire over the next 12 months.

(bc) Only available for the funding of loans. As of December 31, 2024,2025, approximately $925$300 million of FPL's and $2,600$2,400 million of NEECH's bilateral revolving credit facilities expire over the next 12 months.

(ce) Only available for the issuance of letters of credit. AsIn ofJanuary December2026, 31,NEECH 2024,increased approximatelythe $1,180 millioncapacity of the letter of credit facilities expireto over$4,928 the next 12 months.million.

Approximately 7475 banks, located globally, participate in FPL’s and NEECH’s revolving credit facilities, with no one bank providing more than 5% of the combined revolving credit facilities. Pursuant to a 1998 guarantee agreement, NEE guarantees the payment of NEECH’s debt obligations under its revolving credit facilities. In order for FPL or NEECH to borrow or to have letters of credit issued under the terms of their respective revolving credit facilities and, also for NEECH, its letter of credit facilities, FPL, in the case of FPL, and NEE, in the case of NEECH, are required, among other things, to maintain a ratio of funded debt to total capitalization that does not exceed a stated ratio. The FPL and NEECH revolving credit facilities also contain default and related acceleration provisions relating to, among other things, failure of FPL and NEE, as the case may be, to maintain the respective ratio of funded debt to total capitalization at or below the specified ratio. AtAs of December 31, 2024,2025, each of NEE and FPL was in compliance with its required ratio.

Certain subsidiaries of NEE issue guarantees and obtain letters of credit and surety bonds, as well as provide indemnities, to facilitate commercial transactions with third parties and financings. Substantially all of the guarantee arrangements are on behalf of NEE’s consolidated subsidiaries, as discussed in more detail below. See Note 8 and Note 15 – Commitments regarding guarantees of obligations on behalf of XPLRunconsolidated subsidiaries.entities. NEE is not required to recognize liabilities associated with guarantee arrangements issued on behalf of its consolidated subsidiaries unless it becomes probable that they will be required to perform. AtAs of December 31, 2024,2025, NEE believes that there is no material exposure related to these guarantee arrangements.

In addition, atas of December 31, 2024,2025, NEE subsidiaries had approximately $6.4$7.1 billion in guarantees related to obligations under PPAs and acquisition agreements, interconnection agreements, nuclear-related activities, payment obligations related to PTCs, support for NEER's retail electricity provider activities, as well as other types of contractual obligations (see Note 15 – Commitments).

There have been no material changes fromto the risk factors disclosed in the 2025 Form 10-K. The factors discussed in Part I, Item 1A. Risk Factors in the 2025 Form 10-K, astogether well aswith other information set forth in this report,report and the risk factors disclosed in the "Risk Factors" section of the joint proxy statement/prospectus included in the Registration Statement on Form S-4 (File No. 333-297351), which risk factors are incorporated by reference herein, and which registration statement was initially filed with the SEC on July 9, 2026 and subsequently declared effective by the SEC on July 23, 2026, could materially adversely affect NEE's and FPL's business, financial condition, results of operations and prospects and should be carefully considered. The risks described in the 2025 Form 10-K and in the joint proxy statement/prospectus included in the Registration Statement on Form S-4 are not the only risks facing NEE and FPL. Additional risks and uncertainties not currently known to NEE or FPL, or that are currently deemed to be immaterial, also may materially adversely affect NEE's or FPL's business, financial condition, results of operations and prospects.

NEE’s operating performance is driven primarily by the operations of its two principal businesses, FPL, which serves more than six million customer accounts in Florida and is the largest electric utility in the U.S., and NEER, which together with affiliated entities is one of the largest energy infrastructure developers in the U.S. The table below presents net income (loss) attributable to NEE and earnings (loss) per share attributable to NEE, assuming dilution, by reportable segment, FPL and NEER. Corporate and Other is primarily comprised of the operating results of other business activities, as well as other income and expense items, including interest expense, and eliminating entries, and may include the net effect of rounding. See Note 13 for additional segment information. The following discussiondiscussions should be read in conjunction with the Notes to Condensed Consolidated Financial Statements contained herein and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in the 2025 Form 10‑K. The results of operations for an interim period generally will not give a true indication of results for the year. In the following discussion,discussions, all comparisons are with the corresponding items in the prior year period.periods.

(a) For the three months ended MarchJune 31,30, 2026 and 2025, approximately $30$215 million of gains and $45$161 million of losses, respectively, and for the six months ended June 30, 2026 and 2025, approximately $245 million of gains and $206 million of losses, respectively, are included in NEER's net income; the remaining balance is included in Corporate and Other. The change in non-qualifying hedge activity is primarily attributable to changes in forward power and natural gas prices, interest rates and foreign currency exchange rates, as well as the reversal of previously recognized unrealized mark-to-market gains or losses as the underlying transactions were realized.

(b) The threesix months ended MarchJune 31,30, 2025 includes an impairment charge related to the investment in XPLR. See Note 3 – Nonrecurring Fair Value Measurements.

Net income attributable to NEE increased by$1,116 $1,349million and $2,464 million for the three and six months ended MarchJune 31,30, 20262026, respectively, reflecting higher results at FPL, NEER and Corporate and Other.

FPL's increase in net income for the three and six months ended MarchJune 31,30, 2026 was primarily driven by continued investments in plant in service and other property.

NEER's results increased for the three months ended MarchJune 31,30, 2026 primarily reflecting favorable non-qualifying hedge activity compared to 2025 and higher earnings from new investments. NEER's results increased for the six months ended June 30, 2026 primarily reflecting the absence of an impairment charge related to the investment in XPLR recorded in 2025, gainsfavorable onnon-qualifying thehedge 2026activity salecompared ofto ownership interests in a transmission asset2025 and higher earnings from new investments, partly offset by lower earnings from the customer supply business.investments.

Corporate and Other's results increased for the three and six months ended MarchJune 31,30, 2026 primarily due to favorable non-qualifying hedge activity compared to 2025.2025, partly offset by higher interest expense driven by higher average debt balances.

NEE's effective income tax rates for the three months ended MarchJune 31,30, 2026 and 2025 were approximately (413)% and 914%,(19)%, respectively, and for the six months ended June 30, 2026 and 2025 were (15)% and (59)%, respectively. See Note 4 for a discussion of NEE's and FPL's effective income tax rates.

FPL's net income increased $146$137 million and $283 million for the three and six months ended MarchJune 31,30, 2026.2026, respectively. Investments in plant in service and other property grew FPL's average rate base by approximately $6.3$6.8 billion and $6.6 billion for the three and six months ended MarchJune 31,30, 20262026, respectively, when compared to the same periodperiods in the prior year, reflecting, among other things, solar generation additions and ongoing transmission and distribution additions.

The use of a RSM for the three and six months ended MarchJune 31,30, 2026 is permitted by the 2025 rate agreement, and, for the prior year period,periods, the use of reserve amortization was permitted by the 2021 rate agreement. The RSM reserve, which is authorized up to approximately $1.5 billion, after tax, over the term of the 2025 rate agreement, includes ITC amortization for battery storage projects placed in service in 2025, the remaining balance from FPL's previous reserve amortization mechanism as of January 1, 2026 and certain amounts related to deferred tax liabilities.

During the three months ended MarchJune 31,30, 2026, FPL recorded the reversal of RSM amortization of approximately $110 million, after tax, reflecting the reversal of reserve amortization in accordance with the 2025 rate agreement. During the six months ended June 30, 2026, FPL recorded RSM amortization of approximately $306$196 million, after tax, reflecting ITC and reserve amortization in accordance with the 2025 rate agreement. During the three and six months ended MarchJune 31,30, 2025, FPL recorded pre-tax reserve amortization of approximately $622$19 million and $641 million, pre-tax.respectively. See Depreciation and Amortization Expense and Income Taxes below. FPL earned a regulatory ROE of approximately 11.70% and 11.60% on its retail rate base, based on a trailing thirteen-month average retail rate base as of MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively.

In February 2026, the non‑signatories challenged the FPSC’s final order approving the 2025 rate agreement through a motion for reconsideration with the FPSC and appeals with the Florida Supreme Court. In April 2026, the FPSC denied substantially all of the motion for reconsideration, and the matter remains pending before the Florida Supreme Court. In May 2026, notices of appeal were filed with the Florida Supreme Court challenging the FPSC's order denying reconsideration of the FPSC's final order approving the 2025 rate agreement. In June 2026, the Florida Supreme Court consolidated the appeals into a single proceeding. See Note 11 – Rate Regulation.

During the three and six months ended MarchJune 31,30, 2026, operating revenues increased $274$188 million.million and $462 million, respectively.

Retail base revenues during the three and six months ended June 30, 2026 increased by approximately $284$276 million and $561 million, respectively, reflecting additional revenues of approximately $200$251 million and $451 million, respectively, related to new retail base rates under the 2025 rate agreement. Retail base revenues duringfor the three and six months ended MarchJune 31,30, 2026 were also impacted by an increaseincreases of 1.7%approximately 1.5% and 1.6%, respectively, in the average number of customer accounts, partly offset by decreases of 1.2% and 0.1%, respectively, in the average usage per retail customer driven by favorable weather as well as an increase of 1.6% in the number of average customers when compared to the prior year period.periods.

The increase in operating revenues for the three and six months ended MarchJune 31,30, 2026 also reflects increases in fuel revenues of approximately $70 million, other base revenues of $64$137 million and $207 million, respectively, and increases in storm protection plan cost recovery clause revenues of $62$47 million.million and $108 million, respectively. The increase in operating revenues for the three and six months ended MarchJune 31,30, 2026 was partly offset by a decreasedecreases in storm cost recovery revenues of approximately $247$309 million and $556 million, respectively, primarily associated with the completion of surcharges for Hurricanes Debby, Helene and Milton, as discussed above.

Depreciation and amortization expense increaseddecreased $257$51 million during the three months ended MarchJune 31,30, 2026 primarily reflectingdriven by lower amortization of deferred storm costs of approximately $309 million primarily associated with the completion of the surcharges related to Hurricanes Debby, Helene and Milton, as discussed above. This decrease was partly offset by the impact of lowerthe reversal of RSM amortization (reserve amortization in 2025) as well as higher plant in service balances. During the three months ended MarchJune 31,30, 2026 and 2025,2026, FPL recorded the reversal of pre-tax RSM amortization (of approximately $147 million compared to reserve amortization in 2025) of approximately $209$19 million and $622 million, respectively. Forduring the three months ended MarchJune 31,30, 2026, in order to achieve the targeted regulatory ROE, the use of RSM amortization is permitted by the 2025 rate agreement, and in the prior-year period, the use of reserve amortization was permitted by the 2021 rate agreement. See Note 11 – Rate Regulation.2025.

Depreciation and amortization expense increased $206 million during the six months ended June 30, 2026 primarily reflecting the impact of lower RSM amortization (reserve amortization in 2025) as well as higher plant in service balances. During the six months ended June 30, 2026 and 2025, FPL recorded pre-tax RSM amortization (reserve amortization in 2025) of approximately $62 million and $641 million, respectively. The increase in depreciation and amortization expense during the six months ended June 30, 2026 is partly offset by approximately $248$556 million of lower amortization of deferred storm costs primarily associated with the completion of the surcharges related to Hurricanes Debby, Helene and Milton, as discussed above.

During the threesix months ended MarchJune 31,30, 2026, FPL’s income taxes decreased $233$276 million primarily related to approximately $150 million of ITC amortization, utilized as part of the RSM, as well as higher clean energy tax credits as compared to the prior year period. As of MarchJune 31,30, 2026, approximately $1.225$1.335 billion, after tax, of total RSM reserve remains available under the 2025 rate agreement. See Note 11 – Rate Regulation and Note 4.

NEER’s results increased $847$651 million and $1,498 million for the three and six months ended MarchJune 31,30, 2026.2026, respectively. The primary drivers, on an after-tax basis, of the changes are in the following table.

Results from new investments for the three and six months ended MarchJune 31,30, 2026 increased primarily due to higher earnings related to new wind and solar generation and battery storage facilities that entered service during or after the three months ended March 31, 2025.generation.

Operating revenues for the three months ended MarchJune 31,30, 2026 increased $148$618 million primarily due to:

•the impact of non-qualifying commodity hedges due primarily to changes in energy prices (approximately $11$188 million of gains for the three months ended MarchJune 31,30, 2026 compared to $188$175 million of gainslosses for the comparable period in 2025).; and

Operating expenses – net for the three months ended MarchJune 31,30, 2026 increased $340$331 million primarily due to increases of $211$221 million in O&M expense and $108$57 million in fuel, purchased power and interchange expense. Operating expenses – net for the six months ended June 30, 2026 increased $672 million primarily due to increases of $432 million in O&M expense and $165 million in fuel, purchased power and interchange expense. The increaseincreases wasfor both periods were primarily associated with growth across the NEER businesses.

Gains on disposal of businesses/assets – net for the threesix months ended MarchJune 31,30, 2026 increased $223$195 million primarily as a result of the sale of ownership interests in a transmission asset. See Note 11 – Disposal of a Business.

NEER’s interest expense for the threesix months ended MarchJune 31,30, 2026 decreased $47$127 million primarily reflecting approximately $199$321 million of favorable impacts related to changes in the fair value of interest rate derivative instruments, partly offset by higher average debt balances as well as a loss on extinguishment of debt as a result of the sale of ownership interests in a transmission asset (see Note 11 – Disposal of a Business) as well as higher average debt balances..

NEER recognized $170$333 million and $177 million of equity in earnings of equity method investees for the three months ended MarchJune 31,30, 2026 and 2025. NEER recognized $503 million of equity in earnings of equity method investees for the six months ended June 30, 2026, compared to $646$469 million of equity in losses of equity method investees for the threesix months ended MarchJune 31,30, 2025. The change for the three and six months ended MarchJune 31,30, 2026 primarilyreflects higher earnings from equity method investees as well as a gain of approximately $119 million related to the sale of a partial interest in an equity method investment. The change for the six months ended June 30, 2026 also reflects the absence of an impairment charge related to the investment in XPLR recorded in 2025 of approximately $0.7 billion ($0.5 billion after tax) (see Note 3 – Nonrecurring Fair Value Measurements).

Corporate and Other's results increased $356$328 million during the three months ended MarchJune 31,30, 2026 primarily due to favorable after-tax impacts of approximately $395$453 million, as compared to the prior year period, related to non-qualifying hedge activity as a result of changes in the fair value of interest rate derivative instruments.instruments (see Note 2), partly offset by higher interest expense driven by higher average debt balances.

NEE's sources and uses of cash for the threesix months ended MarchJune 31,30, 2026 and 2025 were as follows:

The following table provides a summary of capital investments for the threesix months ended MarchJune 31,30, 2026 and 2025.

As of MarchJune 31,30, 2026, NEE's total net available liquidity was approximately $14.8$18.1 billion. The table below provides the components of FPL's and NEECH's net available liquidity as of MarchJune 31,30, 2026.

(a) Provide for the funding of loans up to the amount of the credit facility and the issuance of letters of credit up to $1,450 million ($450 million for FPL and $1,000 million for NEECH). The entire amount of the credit facilities is available for general corporate purposes and to provide additional liquidity in the event of a loss to the companies’ or their subsidiaries’ operating facilities (including, in the case of FPL, a transmission and distribution property loss). FPL’s syndicated revolving credit facilities are also available to support the purchase of $1,566 million of pollution control, solid waste disposal and industrial development revenue bonds in the event they are tendered by individual bondholders and not remarketed prior to maturity, as well as the repayment of approximately $1,973$2,223 million of floating rate notes in the event an individual noteholder requires repayment at specified dates prior to maturity. As of MarchJune 31,30, 2026, approximately $3,250 million of NEECH's syndicated revolving credit facilities expire over the next 12 months.

(b) Only available for the funding of loans. As of MarchJune 31,30, 2026, approximately $555$2,350 million of FPL's and $2,300$2,900 million of NEECH's bilateral revolving credit facilities expire over the next 12 months.

(c) Only available for the issuance of letters of credit. As of MarchJune 31,30, 2026, approximately $79$52 million of the letter of credit facilities expire over the next 12 months.

Certain subsidiaries of NEE issue guarantees and obtain letters of credit and surety bonds, as well as provide indemnities, to facilitate commercial transactions with third parties and financings. Substantially all of the guarantee arrangements are on behalf of NEE’s consolidated subsidiaries, as discussed in more detail below. See Note 6 and Note 12 – Commitments regarding guarantees of obligations on behalf of unconsolidated entities. NEE is not required to recognize liabilities associated with guarantee arrangements issued on behalf of its consolidated subsidiaries unless it becomes probable that they will be required to perform. As of MarchJune 31,30, 2026, NEE believes that there is no material exposure related to these guarantee arrangements.

In addition, as of MarchJune 31,30, 2026, NEE subsidiaries had approximately $7.4$7.8 billion in guarantees related to obligations under PPAs and acquisition agreements, interconnection agreements, nuclear-related activities, support for NEER's retail electricity provider activities, as well as other types of contractual obligations (see Note 12 – Commitments).

In some instances, subsidiaries of NEE elect to issue guarantees instead of posting other forms of collateral required under certain financing arrangements, as well as for other project-level cash management activities. As of MarchJune 31,30, 2026, these guarantees totaled approximately $3.2$3.3 billion and support, among other things, cash management activities, including those related to debt service and operations and maintenance service agreements, as well as other specific project financing requirements.

Subsidiaries of NEE also issue guarantees to support customer supply and proprietary power and gas trading activities, including the buying and selling of wholesale energy commodities. As of MarchJune 31,30, 2026, the estimated mark-to-market exposure (the total amount that these subsidiaries of NEE could be required to fund based on energy commodity market prices as of MarchJune 31,30, 2026) plus contract settlement net payables, net of collateral posted for obligations under these guarantees, totaled approximately $1.6$1.5 billion.

As of MarchJune 31,30, 2026, subsidiaries of NEE also had approximately $8.1$8.0 billion of standby letters of credit and approximately $1.6$1.8 billion of surety bonds to support certain of the commercial activities discussed above. FPL's and NEECH's credit facilities are available to support substantially all of the standby letters of credit.