Debt

Long-term debt consists of the following:



	December 31,
	2011			2010
	(millions)
FPL:
First mortgage bonds - maturing 2013 through 2042 - 4.125% to 6.20%	$	6,390		$	5,540
Storm-recovery bonds - maturing 2013 through 2021 - 5.0440% to 5.2555%^(a)	487			531
Pollution control, solid waste disposal and industrial development revenue bonds - maturing 2020 through 2029 - variable, 0.1% and 0.3% weighted-average interest rates, respectively^(b)	633			633
Other long-term debt - maturing 2012 through 2040 - 4.000% to 5.250%	57			57
Unamortized discount	(34		)	(34		)
Total long-term debt of FPL	7,533			6,727
Less current maturities of long-term debt	50			45
Long-term debt of FPL, excluding current maturities	7,483			6,682
NEECH:
Debentures - maturing 2013 through 2021 - 2.55% to 7 7/8%^(c)	2,300			2,500
Debentures - maturing 2012 - variable, 0.77% and 1.0% weighted-average interest rate, respectively^(d)	200			450
Debentures, related to NEE's equity units - maturing 2014 and 2015 - 3.60% and 1.90%	753			753
Junior Subordinated Debentures - maturing 2044 through 2069 - 5 7/8% to 8.75%	2,353			2,353
Senior secured bonds - maturing 2030 - 7.500%^(e)	500			500
Japanese yen denominated senior notes - maturing 2030 - 5.1325%^(c)	130			123
Japanese yen denominated term loans - maturing 2014 and 2011 - variable, 1.9% and 2.2% weighted-average interest rate, respectively^(c)(d)	442			327
Term loans - maturing 2012 through 2016 - primarily variable, 1.39% and 1.2% weighted-average interest rate, respectively^(d)	1,533			950
Fair value swap	32			3
Unamortized discount	(6		)	(8		)
Total long-term debt of NEECH	8,237			7,951
Less current maturities of long-term debt	350			1,485
Long-term debt of NEECH, excluding current maturities	7,887			6,466
NEER:
Senior secured limited-recourse bonds and notes - maturing 2013 through 2038 - 4.125% to 7.59%	3,147			2,652
Other long-term debt - maturing 2012 through 2030 - primarily limited-recourse and variable, 2.6% weighted-average interest rate^(c)(d)	2,529			2,521
Canadian revolving credit facility - maturing 2013 - variable, 1.3% weighted-average interest rate^(d)	172			82
Total long-term debt of NEER	5,848			5,255
Less current maturities of long-term debt	408			390
Long-term debt of NEER, excluding current maturities	5,440			4,865
Total long-term debt	$	20,810		$	18,013

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(a)	Principal on the storm-recovery bonds is due on the final maturity date (the date by which the principal must be repaid to prevent a default) for each tranche, however, it began being paid semiannually and sequentially on February 1, 2008, when the first semiannual interest payment became due.

(b)

Tax exempt bonds that permit individual bond holders to tender the bonds for purchase at any time prior to maturity. In the event bonds are tendered for purchase, they would be remarketed by a designated remarketing agent in accordance with the related indenture. If the remarketing is unsuccessful, FPL would be required to purchase the tax exempt bonds. As of December 31, 2011, all tax exempt bonds tendered for purchase have been successfully remarketed. FPL's bank revolving lines of credit are available to support the purchase of tax exempt bonds.


(c)	Interest rate swap agreements have been entered into for the majority of these debt issuances.


(d)	Variable rate is based on an underlying index plus a margin.


(e)	Issued by a wholly-owned subsidiary of NEECH and collateralized by a third-party note receivable held by that subsidiary. See Note 5.

Minimum annual maturities of long-term debt for NEE are approximately $808 million, $2,435 million, $1,974 million, $1,837 million and $695 million for 2012, 2013, 2014, 2015 and 2016, respectively. The respective amounts for FPL are approximately $50 million, $453 million, $56 million, $60 million and $64 million.

At December 31, 2011 and 2010, commercial paper borrowings had a weighted-average interest rate of 0.48% (0.26% for FPL) and 0.39% (0.26% for FPL), respectively. Available lines of credit aggregated approximately $7.4 billion ($4.4 billion for NEECH and $3.0 billion for FPL) at December 31, 2011 and were available to support NEECH's and FPL's commercial paper programs. These facilities provide for the issuance of letters of credit of up to approximately $6.4 billion. The issuance of letters of credit is subject to the aggregate commitment under the applicable facility. While no direct borrowings were outstanding at December 31, 2011, letters of credit totaling $1,238 million and $34 million were outstanding under the NEECH and FPL credit facilities, respectively. On February 9, 2012, NEECH and FPL refinanced a portion of their credit facilities and reduced the amount of letters of credit that could be issued under the facilities from 100% to 50% of the facility amount.

NEE has guaranteed certain payment obligations of NEECH, including most of those under NEECH's debt, including all of its debentures and commercial paper issuances, as well as most of its guarantees. NEECH has guaranteed certain debt and other obligations of NEER and its subsidiaries.

In 2008, FPL entered into a reclaimed water agreement with Palm Beach County, Florida (PBC) to provide FPL's WCEC with reclaimed water for cooling purposes beginning in January 2011. Under the reclaimed water agreement, FPL constructed a reclaimed water system, including modifications to an existing treatment plant and a water pipeline, that PBC legally owns and operates. The reclaimed water agreement also required PBC to issue bonds for the purpose of paying the costs associated with the construction of the reclaimed water system. In 2009, PBC issued approximately $68 million principal amount of Palm Beach County, Florida Water and Sewer Revenue Bonds. Under the reclaimed water agreement, FPL will pay PBC an operating fee for the reclaimed water delivered which will be used by PBC to, among other things, service the principal of, and interest on, the bonds. The portion of the operating fee related to PBC's servicing principal of, and interest on, the bonds will be paid by FPL, beginning October 2011, until final maturity of the bonds. FPL does not have a direct obligation to the bondholders; however, if FPL or PBC were to terminate the reclaimed water agreement, FPL would be obligated to continue to pay the portion of the operating fee intended to reimburse PBC for costs related to issuance of the bonds, including amounts to be used by PBC to service the principal of, and interest on, the bonds. In the event of a default by PBC under the reclaimed water agreement, FPL would have certain rights, including, among other things, the right to appoint a third-party contractor to repair, and restore operations of, the reclaimed water treatment plant, and, in the event of a termination of the reclaimed water agreement by FPL relating to a PBC default, the right to assume ownership of the reclaimed water pipeline from PBC. For financial reporting purposes, FPL is considered the owner of the reclaimed water system and FPL and NEE have recorded electric utility plant in service and other property and long-term debt (see FPL's other long-term debt in the table above) as costs were reimbursed by PBC to FPL.

In 2009, NEE sold $350 million of equity units (initially consisting of Corporate Units). Each equity unit has a stated amount of $50 and consists of a contract to purchase NEE common stock (stock purchase contract) and, initially, a 1/20, or 5%, undivided beneficial ownership interest in a Series C Debenture due June 1, 2014 issued in the principal amount of $1,000 by NEECH (see table above). Each stock purchase contract requires the holder to purchase by no later than June 1, 2012 (the final settlement date) for a price of $50 in cash, a number of shares of NEE common stock (subject to antidilution adjustments) based on a price per share range of $55.67 to $66.80. If purchased on the final settlement date, as of December 31, 2011, the number of shares issued would (subject to antidilution adjustments) range from 0.9051 shares if the applicable market value of a share of common stock is less than or equal to $55.67, to 0.7544 shares if the applicable market value of a share is equal to or greater than $66.80, with applicable market value to be determined using the average closing prices of NEE common stock over a 20-day trading period ending May 29, 2012. Total annual distributions on the equity units will be at the rate of 8.375%, consisting of interest on the debentures (3.60% per year) and payments under the stock purchase contracts (4.775% per year). The interest rate on the debentures is expected to be reset no later than May 2012. The holder of an equity unit may satisfy its purchase obligation with proceeds raised from remarketing the NEECH debentures that are part of its equity unit. The undivided beneficial ownership interest in the NEECH debenture that is a component of each Corporate Unit is pledged to NEE to secure the holder’s obligation to purchase NEE common stock under the related stock purchase contract. If a successful remarketing does not occur on or before the third business day prior to the final settlement date, and a holder has not notified NEE of its intention to settle the stock purchase contract with cash, NEE would exercise its rights as a secured party in the debentures to satisfy in full the holders’ obligations to purchase NEE common stock under the related stock purchase contracts on the final settlement date. The debentures are fully and unconditionally guaranteed by NEE.

In 2010, NEE sold $402.5 million of equity units (initially consisting of Corporate Units). Each equity unit has a stated amount of $50 and consists of a contract to purchase NEE common stock (stock purchase contract) and, initially, a 1/20, or 5%, undivided beneficial ownership interest in a Series D Debenture due September 1, 2015 issued in the principal amount of $1,000 by NEECH (see table above). Each stock purchase contract requires the holder to purchase by no later than September 1, 2013 (the final settlement date) for a price of $50 in cash, a number of shares of NEE common stock (subject to antidilution adjustments) based on a price per share range of $55.02 to $68.78. If purchased on the final settlement date, as of December 31, 2011, the number of shares issued would (subject to antidilution adjustments) range from 0.9121 shares if the applicable market value of a share of common stock is less than or equal to $55.02, to 0.7296 shares if the applicable market value of a share is equal to or greater than $68.78, with applicable market value to be determined using the average closing prices of NEE common stock over a 20-day trading period ending August 28, 2013. Total annual distributions on the equity units will be at the rate of 7.00%, consisting of interest on the debentures (1.90% per year) and payments under the stock purchase contracts (5.10% per year). The interest rate on the debentures is expected to be reset on or after March 1, 2013. The holder of an equity unit may satisfy its purchase obligation with proceeds raised from remarketing the NEECH debentures that are part of its equity unit. The undivided beneficial ownership interest in the NEECH debenture that is a component of each Corporate Unit is pledged to NEE to secure the holder’s obligation to purchase NEE common stock under the related stock purchase contract. If a successful remarketing does not occur on or before the third business day prior to the final settlement date, and a holder has not notified NEE of its intention to settle the stock purchase contract with cash, NEE would exercise its rights as a secured party in the debentures to satisfy in full the holders’ obligations to purchase NEE common stock under the related stock purchase contracts on the final settlement date. The debentures are fully and unconditionally guaranteed by NEE.

Prior to the issuance of NEE’s common stock, the stock purchase contracts will be reflected in NEE’s diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of NEE common stock used in calculating diluted earnings per share is deemed to be increased by the excess, if any, of the number of shares that would be issued upon settlement of the stock purchase contracts over the number of shares that could be purchased by NEE in the market, at the average market price during the period, using the proceeds receivable upon settlement.