Nextera Energy (NEE) Economic Moat Analysis—

Evidence

During the term of a franchise agreement, which is typically 30 years, the municipality or county agrees not to form its own utility, and FPL has the right to offer electric service to residents.

Business — FPL — Franchise Agreements and Competition · Filed 13/02/2026

As of December 31, 2025, FPL held 226 franchise agreements with various municipalities and counties in Florida with varying expiration dates through 2055.

Business — FPL — Franchise Agreements and Competition · Filed 13/02/2026

These franchise agreements cover the vast majority of FPL's retail customer base in Florida.

Business — FPL — Franchise Agreements and Competition · Filed 13/02/2026

Because any customer may elect to provide its own electric services, FPL effectively must compete for an individual customer's business.

Business — FPL — customer self-generation competition · Filed 13/02/2026

As a practical matter, few customers provide their own service at the present time since FPL's cost of service is lower than the cost of self-generation for a significant majority of customers.

Business — FPL — cost of service versus self-generation · Filed 13/02/2026

Generally, in addition to the natural constraints on pricing freedom presented by competition, NEER may also face specific constraints in the form of price caps, or maximum allowed prices, for certain products.

Business — NEER — pricing constraints · Filed 13/02/2026

A majority of NEER's revenues are derived from sales of energy, capacity, credits and ancillary products under long-term PPAs to customers located in wholesale electricity markets.

Business — NEER — long-term PPAs · Filed 13/02/2026

Wholesale power generation is a capital-intensive, commodity-driven business with numerous industry participants.

Business — NEER — wholesale competition · Filed 13/02/2026

NEER primarily competes on the basis of price, but believes that its track record of completing projects on schedule, creditworthiness, operating scale and ability to offer and manage reliable customized risk solutions to wholesale customers are competitive advantages.

Business — NEER — price competition and management's claimed advantages · Filed 13/02/2026

FPL has limited, but growing, competition in the Florida market for retail electricity customers and is not subject to an RPS.

Risk Factors — Florida retail competition · Filed 13/02/2026

Any changes in Florida law or regulation, whether through new, modified, repealed or overturned 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 or would permit third-party sales of electricity, could have a material adverse effect on FPL's business, financial condition, results of operations and prospects.

Risk Factors — retail competition and distributed generation · Filed 13/02/2026

This Committee, which is comprised entirely of independent directors, meets regularly with management, the internal auditors and the independent auditors to make inquiries as to the manner in which the responsibilities of each are being discharged.

Management's Report — independent Audit Committee · Filed 13/02/2026

The independent auditors and the internal audit staff have free access to the Committee without management present to discuss auditing, internal accounting control and financial reporting matters.

Management's Report — auditor access to Audit Committee · Filed 13/02/2026

Base rates are determined in rate proceedings or through negotiated settlements of those proceedings.

Business — FPL Regulation — base-rate determination · Filed 13/02/2026

Existing base rates remain in effect until new base rates are approved by the FPSC.

Business — FPL Regulation — approval requirement for new base rates · Filed 13/02/2026

◦$945 million beginning January 1, 2026; and

Business — FPL Regulation — annualized base-revenue increase effective January 2026 · Filed 13/02/2026

If the earned regulatory ROE rises above 11.95%, any party with standing may seek a review of FPL's retail base rates.

Business — FPL Regulation — review above authorized ROE range · Filed 13/02/2026

Subject to certain conditions, FPL could amortize the RSM reserve over the term of the 2025 rate agreement, provided that in any 12-month period of the 2025 rate agreement FPL would be required to amortize at least enough RSM reserve amount to maintain its minimum authorized regulatory ROE and also could not amortize any RSM reserve amount that would result in an earned regulatory ROE in excess of its maximum authorized regulatory ROE.

Business — FPL Regulation — conditional rate stabilization mechanism · Filed 13/02/2026

In 2025, NEER added approximately 1,604 MW of new wind generating capacity, 2,859 MW of solar generating capacity and 1,799 MW of battery storage capacity and increased its backlog of contracted development projects.

MD&A — NEER — 2025 capacity additions and contracted backlog · Filed 13/02/2026

Corporate and Other's results decreased $1,256 million during 2025 primarily due to unfavorable after-tax impacts of approximately $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.

MD&A — Corporate and Other — financing and hedge effects · Filed 13/02/2026

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (millions) (unaudited) Six Months Ended June 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 4,309 $ 2,104 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,128 2,868 Nuclear fuel and other amortization 210 165 Unrealized losses (gains) on marked to market derivative contracts – net (672) 1,003 Foreign currency transaction losses (gains) (285) 56 Deferred income taxes 619 (512) Cost recovery clauses and franchise fees (7) (159) Equity in losses (earnings) of equity method investees (504) 469 Distributions of earnings from equity method investees 213 181 Gains on disposal of businesses, assets and investments – net (353) (155) Recoverable storm-related costs (19) (346) Other – net 262 230 Changes in operating assets and liabilities: Current assets (858) (501) Noncurrent assets (222) (183) Current liabilities 1,223 521 Noncurrent liabilities 232 217 Net cash provided by operating activities 7,276 5,958 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures of FPL (5,780) (4,285) Independent power and other investments of NEER (13,338) (9,056) Nuclear fuel purchases (263) (279) Other capital expenditures (8) (6) Sale of independent power and other investments of NEER 448 309 Proceeds from sale or maturity of securities in special use funds and other investments 3,252 2,810 Purchases of securities in special use funds and other investments (3,482) (3,060) Other – net 58 22 Net cash used in investing activities (19,113) (13,545) CASH FLOWS FROM FINANCING ACTIVITIES Issuances of long-term debt, including premiums and discounts 15,566 12,996 Retirements of long-term debt (4,032) (5,160) Net change in commercial paper (219) 2,357 Proceeds from other short-term debt 3,650 1,400 Repayments of other short-term debt — (850) Cash swept from (repayments to) related parties – net 13 (129) Issuances of common stock/equity units 31 22 Dividends on common stock (2,599) (2,332) Other – net (353) (144) Net cash provided by financing activities 12,057 8,160 Effects of currency translation on cash, cash equivalents and restricted cash (4) 7 Net increase in cash, cash equivalents and restricted cash 216 580 Cash, cash equivalents and restricted cash at beginning of period 3,006 1,402 Cash, cash equivalents and restricted cash at end of period $ 3,222 $ 1,982 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest (net of amount capitalized) $ 1,980 $ 1,502 Cash received for income taxes – net $ (1,188) $ (353) SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES Accrued property additions $ 7,080 $ 3,545 This report should be read in conjunction with the Notes herein and the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K.

Condensed Consolidated Statements of Cash Flows — six months ended June 30, 2026 · Filed 24/07/2026

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 or base rates.

Notes — Derivative Instruments — FPL regulatory pass-through · Filed 24/07/2026

The proposed business combination is also subject to the receipt of required regulatory approvals, including approvals by the FERC, the NRC, and the utility commissions in Virginia, North Carolina and South Carolina as well as clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Notes — proposed business combination — required approvals · Filed 24/07/2026

The merger agreement contains certain termination rights and provides that, upon termination of the merger agreement under specified circumstances, NEE would be required to pay to Dominion Energy a termination fee of $4.8 billion or $6.5 billion, depending on the circumstances of the termination, while under other circumstances, Dominion Energy would be required to pay NEE a termination fee of approximately $2.2 billion.

Notes — merger agreement — conditional termination fees · Filed 24/07/2026

In June 2026, the parties entered into a settlement agreement that, upon final court approval, would resolve the purported shareholder derivative actions and the related shareholder litigation demands and inspection demands.

Notes — shareholder litigation — settlement subject to final court approval · Filed 24/07/2026

In addition, NEE would agree to implement or maintain certain corporate governance modifications or activities.

Notes — shareholder litigation — conditional governance modifications · Filed 24/07/2026

Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 FPL NEER Total FPL NEER Total (millions) Operating revenues $ 4,896 $ 2,532 $ 7,428 $ 4,708 $ 1,914 $ 6,622 Corporate and Other 106 78 Total consolidated revenues $ 7,534 $ 6,700 Less: Fuel, purchased power and interchange 1,079 295 946 238 Other operations and maintenance 424 877 442 656 Depreciation and amortization 1,029 712 1,080 677 Taxes other than income taxes and other – net 543 (a) 124 523 106 Interest expense 349 333 (b) 326 413 (b) Income tax expense (benefit)(c) 121 (253) 164 (352) Other segment items(d) 61 1,190 48 807 Net income attributable to NEE for reportable segments 1,412 1,634 3,046 1,275 983 2,258 Reconciliation of segment profit/(loss) Corporate and Other 98 (230) Net income attributable to NEE $ 1,412 $ 1,634 $ 3,144 $ 1,275 $ 983 $ 2,028 _________________________ (a)FPL's income statement line for taxes other than income taxes and other – net includes gains on disposal of businesses/assets – net.

Note 13 — Segment Information — second-quarter 2026 and 2025 results · Filed 24/07/2026

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).

MD&A — XPLR investment — 2025 impairment comparison · Filed 24/07/2026

The following explains how the plan-adjusted amounts are calculated from NextEra Energy’s audited consolidated financial statements: (a) FPL O&M costs (plan-adjusted) is a measure that includes most but not all O&M expenses and includes certain expenses that are not classified as O&M expenses under GAAP but are reported for state regulatory purposes as O&M expenses; ​ (b) FPL capital expenditures (plan-adjusted) are presented on an accrual basis, and exclude nuclear fuel payments and certain costs that are not classified as capital expenditures under GAAP in the consolidated statements of cash flows but that are reported for state regulatory purposes as capital expenditures; and ​ (c) NextEra Energy Resources’ earnings (plan-adjusted) exclude: ​ (i) the mark-to-market effect of non-qualifying hedges; ​ (ii) other than temporary impairments on investments; ​ (iii) extraordinary items; ​ (iv) non-recurring charges or gains (e.g., restructuring charges and material litigation losses); ​ (v) discontinued operations; ​ (vi) regulatory and/or legislative changes and/or changes in accounting principles; ​ (vii) labor union disruptions; and ​ (viii) acts of God such as hurricanes.

Executive Compensation — definitions and exclusions for plan-adjusted measures · Filed 01/04/2026

​ ​ ​ ​ Relative TSR Percentile Ranking for THREE Year Performance Period ​ ​ TSR Results for Three Year Performance Period ​ ​ Modifier Result ​ ​ NextEra Energy ​ ​ ​ ​ ​ ​ ​ 4.34% ​ ​ ​ 0.80 ​ ​ Top Ten Power Companies by Market Capitalization (a subset of the S&P 500 Utilities Index) ​ ​ ≥75th Percentile ​ ​ ​ ​ 29.06% ​ ​ ​ 120% ​ ​ Midpoint ​ ​ ​ ​ 20.88% ​ ​ ​ 100% ​ ​ ≤25th Percentile ​ ​ ​ ​ 12.70% ​ ​ ​ 80% ​ Based on our performance during the performance period, the 2023 performance share award received an overall rating of 1.58, determined as shown below.

Executive Compensation — three-year relative TSR results · Filed 01/04/2026

​ PERFORMANCE MEASURE(1) ​ ​ WEIGHT ​ ​ RESULT ​ ​ PAYOUT AS A % OF TARGET ​ ​ Adjusted EPS growth and adjusted ROE ​ ​ ​ ​ 80% ​ ​ ​ ​ ​ 2.00 ​ ​ ​ ​ ​ 200% ​ ​ ​ Operational measures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3-year average employee safety ​ ​ ​ ​ 5% ​ ​ ​ ​ ​ 2.00 ​ ​ ​ ​ ​ 200% ​ ​ ​ Nuclear WANO-AC Performance Index ​ ​ ​ ​ 5% ​ ​ ​ ​ ​ 1.59 ​ ​ ​ ​ ​ 159% ​ ​ ​ 3-year average EFOR ​ ​ ​ ​ 5% ​ ​ ​ ​ ​ 2.00 ​ ​ ​ ​ ​ 200% ​ ​ ​ FPL 3-year average service reliability ​ ​ ​ ​ 5% ​ ​ ​ ​ ​ 2.00 ​ ​ ​ ​ ​ 200% ​ ​ ​ Operational measures total ​ ​ ​ ​ 20% ​ ​ ​ ​ ​ 1.90 ​ ​ ​ ​ ​ 190% ​ ​ ​ Overall rating ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1.98 ​ ​ ​ ​ ​ 198% ​ ​ ​ Relative TSR modifier ​ ​ ​ ​ ±20% ​ ​ ​ ​ ​ 0.80 ​ ​ ​ ​ ​ 80% ​ ​ ​ Overall rating (after applying relative TSR modifier and individual performance factors) (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1.58 ​ ​ ​ ​ ​ 158% ​ ​ ​ (1) Each NEO’s individual performance factor ranges from ±20% and can only modify the overall rating prior to applying the TSR modifier.

Executive Compensation — 2023 performance share award results and payout calculation · Filed 01/04/2026

​ ​ NextEra Energy’s NEOs (and all other officers) are subject to a stock ownership policy and a stock retention policy.

Executive Compensation — stock ownership and retention policies · Filed 01/04/2026

Unvested shares of performance-based restricted stock, shares subject to unpaid performance share awards and unexercised options do not count toward the calculation of required holdings.

Executive Compensation — exclusion of unvested performance awards and options from required holdings · Filed 01/04/2026

The incremental fair value attributable to the modification was $16,061,142, which is reflected in the Summary Compensation Table for fiscal year 2025.

Pay Versus Performance — incremental fair value of retirement award modification · Filed 01/04/2026

Maintained industry-leading cost discipline with non-fuel O&M more than 70% below national average, supporting customer affordability

Executive Compensation — reported FPL non-fuel O&M comparison · Filed 01/04/2026

In response to feedback, we increased financial performance target goal rigor from the median to the 55th percentile and removed the individual performance modifier from performance share awards beginning in 2026

Executive Compensation — target rigor and modifier changes beginning in 2026 · Filed 01/04/2026

Since rates are largely cost-based, maintaining low rates requires a strategy focused on developing and maintaining a low-cost position, including the implementation of ideas generated from cost savings initiatives.

Business — FPL — largely cost-based rates · Filed 14/02/2025

◦$692 million beginning January 1, 2022, and

Business — FPL Regulation — January 2022 annualized base-revenue increase · Filed 14/02/2025

◦$560 million beginning January 1, 2023.

Business — FPL Regulation — January 2023 annualized base-revenue increase · Filed 14/02/2025

In 2024, NEER added approximately 1,365 MW of new wind generating capacity, 2,507 MW of solar generating capacity and 755 MW of battery storage capacity and increased its backlog of contracted renewable development projects.

MD&A — NEER — 2024 capacity additions and contracted backlog · Filed 14/02/2025

The difference for 2024 reflects the approximately $0.8 billion impairment charge in 2024 related to NextEra Energy Resources' investment in XPLR.

Notes — equity method investments — 2024 XPLR impairment · Filed 14/02/2025

At December 31, 2023, FPL held 226 franchise agreements with various municipalities and counties in Florida with varying expiration dates through 2053.

Business — FPL — franchise agreements at December 31, 2023 · Filed 16/02/2024

As a practical matter, few customers provide their own service at the present time since FPL's cost of service is lower than the cost of self-generation for a significant majority of customers.

Business — FPL — 2023 self-generation cost comparison · Filed 16/02/2024

Publication history

Sources

• filing-1 · Filed 13/02/2026
• filing-2 · Filed 24/07/2026
• filing-3 · Filed 01/04/2026
• filing-4 · Filed 14/02/2025
• filing-5 · Filed 16/02/2024
• filing-6 · Filed 23/04/2026