Estimates of the fair value of financial instruments |
The following estimates of the fair value of financial instruments have been made primarily using available market information. However, the use of different market assumptions or methods of valuation could result in different estimated fair values.
| | | | | | | | | | | | | | | | | | | June 30, 2012 | | December 31, 2011 | | | Carrying Amount | | Estimated Fair Value | | Carrying Amount | | Estimated Fair Value | | | (millions) | | NEE: | | | Special use funds | $ | 4,071 |
| (a) | $ | 4,071 |
| (a) | $ | 3,867 |
| (a) | $ | 3,867 |
| (a) | Other investments: | | | | | | | | | Notes receivable | $ | 500 |
| | $ | 629 |
| (b) | $ | 503 |
| | $ | 535 |
| (b) | Debt securities | $ | 109 |
| (c) | $ | 109 |
| (d) | $ | 89 |
| (c) | $ | 89 |
| (d) | Equity securities | $ | 92 |
| | $ | 163 |
| (e) | $ | 80 |
| | $ | 159 |
| (e) | Long-term debt, including current maturities | $ | 23,330 |
| | $ | 25,332 |
| (f) | $ | 21,614 |
| | $ | 23,699 |
| (f) | Interest rate swaps - net unrealized losses | $ | (281 | ) | | $ | (281 | ) | (d) | $ | (283 | ) | | $ | (283 | ) | (d) | Foreign currency swaps - net unrealized gains (losses) | $ | (11 | ) | | $ | (11 | ) | (d) | $ | 18 |
| | $ | 18 |
| (d) | FPL: | | | | | | | | | Special use funds | $ | 2,867 |
| (a) | $ | 2,867 |
| (a) | $ | 2,737 |
| (a) | $ | 2,737 |
| (a) | Long-term debt, including current maturities | $ | 8,107 |
| | $ | 9,553 |
| (f) | $ | 7,533 |
| | $ | 9,078 |
| (f) |
———————————— | | (a) | At June 30, 2012, includes $199 million of investments accounted for under the equity method and $47 million of loans not measured at fair value on a recurring basis ($130 million and $35 million, respectively, for FPL). At December 31, 2011, includes $164 million of investments accounted for under the equity method and $39 million of loans not measured at fair value on a recurring basis ($112 million and $24 million, respectively, for FPL). For the remaining balances, see Note 3 for classification by major security type and hierarchy level. The amortized cost of debt and equity securities is $1,715 million and $1,418 million, respectively, at June 30, 2012 and $1,638 million and $1,425 million, respectively, at December 31, 2011 ($1,385 million and $810 million, respectively, at June 30, 2012 and $1,321 million and $864 million, respectively, at December 31, 2011 for FPL). |
| | (b) | Classified as held to maturity. Estimated using a discounted cash flow valuation technique based on certain observable yield curves and indices considering the credit profile of the borrower (Level 3). Notes receivable bear interest primarily at fixed rates and mature by 2029. Notes receivable are considered impaired and placed in non-accrual status when it becomes probable that all amounts due cannot be collected in accordance with the contractual terms of the agreement. The assessment to place notes receivable in non-accrual status considers various credit indicators, such as credit standings and ratings and market-related information. As of June 30, 2012, NEE had no notes receivable reported in non-accrual status. |
| | (c) | Classified as trading securities. |
| | (e) | Primarily modeled internally based on recent market information including, among other things, private offerings of the securities (Level 3). |
| | (f) | As of June 30, 2012 and December 31, 2011, $16,757 million and $15,035 million, respectively, is estimated using quoted market prices for the same or similar issues (Level 2); the balance is estimated using a discounted cash flow valuation technique, considering the current credit spread of the debtor (Level 3). For FPL, estimated using quoted market prices for the same or similar issues (Level 2). |
|
Available-for-sale securities |
Realized gains and losses and proceeds from the sale or maturity of available for sale securities are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NEE | | FPL | | NEE | | FPL | | Three Months Ended June 30, | | Three Months Ended June 30, | | Six Months Ended June 30, | | Six Months Ended June 30, | | 2012 | | 2011 | | 2012 | | 2011 | | 2012 | | 2011 | | 2012 | | 2011 | | (millions) | Realized gains | $ | 88 |
| | $ | 57 |
| | $ | 30 |
| | $ | 26 |
| | $ | 131 |
| | $ | 87 |
| | $ | 61 |
| | $ | 38 |
| Realized losses | $ | 20 |
| | $ | 22 |
| | $ | 11 |
| | $ | 15 |
| | $ | 32 |
| | $ | 43 |
| | $ | 22 |
| | $ | 34 |
| Proceeds from sale or maturity of securities | $ | 2,001 |
| | $ | 1,228 |
| | $ | 1,630 |
| | $ | 844 |
| | $ | 2,937 |
| | $ | 2,575 |
| | $ | 2,357 |
| | $ | 1,808 |
|
Unrealized losses on available for sale debt securities at June 30, 2012 and December 31, 2011 were not material to NEE or FPL. The unrealized gains on available for sale securities are as follows:
| | | | | | | | | | | | | | | | | | NEE | | FPL | | June 30, 2012 | | December 31, 2011 | | June 30, 2012 | | December 31, 2011 | | (millions) | Equity securities | $ | 635 |
| | $ | 546 |
| | $ | 464 |
| | $ | 376 |
| U.S. Government and municipal bonds | $ | 33 |
| | $ | 46 |
| | $ | 31 |
| | $ | 43 |
| Corporate debt securities | $ | 32 |
| | $ | 31 |
| | $ | 23 |
| | $ | 24 |
| Mortgage-backed securities | $ | 21 |
| | $ | 27 |
| | $ | 18 |
| | $ | 24 |
| Other debt securities | $ | 2 |
| | $ | 3 |
| | $ | 2 |
| | $ | 3 |
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