Debt

Long-term debt consists of the following:



		December 31,
		2018						2017
	Maturity Date	Balance				Weighted- Average Interest Rate		Balance				Weighted- Average Interest Rate
		(millions)						(millions)
FPL:
First mortgage bonds - fixed	2020-2048	$	10,626			4.60	%	$	9,145			4.70	%
Storm-recovery bonds - fixed^(a)	2021	74				5.26	%	144				5.26	%
Pollution control, solid waste disposal and industrial development revenue bonds - primarily variable^(b)	2020-2048	1,022				2.04	%	966				2.12	%
Senior unsecured notes - variable^(c)(d)	2068	193				2.40	%	—
Other long-term debt - variable^(d)	2018-2021	—						1,501				2.01	%
Unamortized debt issuance costs and discount		(132		)				(105		)
Total long-term debt of FPL		11,783						11,651
Less current portion of long-term debt		95						464
Long-term debt of FPL, excluding current portion		11,688						11,187
NEECH:
Debentures - fixed^(e)	2018-2027	4,300				3.21	%	4,100				3.00	%
Debentures - variable^(d)	2019-2021	2,341				3.11	%	—
Debentures, related to NEE's equity units - fixed	2020-2021	1,500				1.65	%	2,200				1.88	%
Junior subordinated debentures - primarily fixed^(e)	2057-2077	3,456				4.99	%	3,456				4.79	%
Japanese yen denominated senior notes - fixed^(e)	2030	91				5.13	%	89				5.13	%
Japanese yen denominated term loans - variable^(d)(e)	2020	546				2.76	%	532				2.76	%
Other long-term debt - fixed	2018-2044	818				2.57	%	920				2.46	%
Other long-term debt - variable^(d)	2019-2023	50				3.53	%	52				2.58	%
Fair value hedge adjustment		(1		)				1
Unamortized debt issuance costs and discount		(88		)				(94		)
Total long-term debt of NEECH		13,013						11,256
Less current portion of long-term debt		2,019						645
Long-term debt of NEECH, excluding current portion		10,994						10,611
NEER:
Senior secured limited-recourse bonds and notes - fixed^(f)	2020-2038	325				4.25	%	2,114				5.74	%
Senior secured limited-recourse term loans - primarily variable^(d)(e)	2019-2037	3,869				4.39	%	5,165				3.32	%
Senior unsecured notes - fixed^(e)	2024-2027	—						1,100				4.38	%
Senior unsecured NEP convertible notes - fixed^(g)	2020	—						300				1.50	%
Other long-term debt - primarily variable^(d)	2018-2040	601				2.57	%	1,678			^(e)	3.28	%
Unamortized debt issuance costs and premium - net		(93		)				(181		)
Total long-term debt of NEER		4,702						10,176
Less current portion of long-term debt		602			^(h)			564
Long-term debt of NEER, excluding current portion		4,100						9,612
Total long-term debt		$	26,782					$	31,410

______________________


(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 is being paid semiannually and sequentially.

(b)

Includes approximately $893 million of variable rate tax exempt bonds that permit individual bondholders to tender the bonds for purchase at any time prior to maturity. In the event these variable rate tax exempt 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 variable rate tax exempt bonds. At December 31, 2018, all variable rate tax exempt bonds tendered for purchase have been successfully remarketed. FPL's bank revolving line of credit facilities are available to support the purchase of the variable rate tax exempt bonds. Variable interest rate is established at various intervals by the remarketing agent.


(c)	Permit individual noteholders to require repayment prior to maturity, of which approximately $94 million can be required to be repaid beginning in June 2019 and the remainder beginning in November 2019. FPL’s bank revolving line of credit facilities are available to support the purchase of the senior unsecured notes.


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


(e)	Interest rate contracts, primarily swaps, have been entered into with respect to certain of these debt issuances. Additionally, foreign currency contracts have been entered into with respect to the Japanese yen denominated debt. See Note 4.


(f)	Includes approximately $483 million in 2017 of debt held by a wholly owned subsidiary of NEER and collateralized by a third-party note receivable held by that subsidiary. See Note 9 - NEER.


(g)	A holder may convert all or any portion of its notes into NEP common units and cash in lieu of any fractional common unit at the conversion rate. At December 31, 2017, the conversion rate, subject to certain adjustments, was 18.9170 NEP common units per $1,000 principal amount of the convertible notes.


(h)	Includes $365 million of debt as a result of events of default under certain financings caused by the bankruptcy filing of a counterparty to several PPAs.

Minimum annual maturities of long-term debt for NEE are approximately $2,389 million, $1,827 million, $3,225 million, $1,272 million and $1,743 million for 2019, 2020, 2021, 2022 and 2023, respectively. Such amounts include scheduled payments under the financing agreements for debt in default as the lenders have not issued any acceleration notices. The respective amounts for FPL are approximately $95 million, $30 million, $68 million, $120 million and $537 million.

At December 31, 2018 and 2017, short-term borrowings had a weighted-average interest rate of 2.95% (2.87% for FPL) and 1.68% (1.68% for FPL), respectively. Subsidiaries of NEE, including FPL, had credit facilities with available capacity at December 31, 2018 of approximately $10.1 billion ($3.9 billion for FPL), of which approximately $9.9 billion ($3.9 billion for FPL) relate to revolving line of credit facilities and $0.2 billion (none for FPL) relate to letter of credit facilities. Certain of the revolving line of credit facilities provide for the issuance of letters of credit at December 31, 2018 of up to approximately $2.2 billion ($0.6 billion for FPL). The issuance of letters of credit under certain revolving line of credit facilities is subject to the aggregate commitment of the relevant banks to issue letters of credit under the applicable facility.

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 payment guarantees and indemnifications. NEECH has guaranteed certain debt and other obligations of NEER and its subsidiaries.

In August 2016, NEE sold $1.5 billion 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 5% undivided beneficial ownership interest in a Series I Debenture due September 1, 2021 issued in the principal amount of $1,000 by NEECH. Each stock purchase contract requires the holder to purchase by no later than September 1, 2019 (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 $127.63 to $159.54. If purchased on the final settlement date, as of December 31, 2018, the number of shares issued would (subject to antidilution adjustments) range from 0.3954 shares if the applicable market value of a share of common stock is less than or equal to $127.63 to 0.3162 shares if the applicable market value of a share is equal to or greater than $159.54, 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, 2019. Total annual distributions on the equity units are at the rate of 6.123%, consisting of interest on the debentures (1.65% per year) and payments under the stock purchase contracts (4.473% per year). The interest rate on the debentures is expected to be reset on or after March 1, 2019. A 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, the debentures that are components of the Corporate Units will be used 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 August 2018, NEECH completed a remarketing of approximately $700 million aggregate principal amount of its Series H Debentures due September 1, 2020 (Series H Debentures) that were issued in September 2015 as components of equity units issued concurrently by NEE (September 2015 equity units). The Series H Debentures are fully and unconditionally guaranteed by NEE. In connection with the remarketing of the Series H Debentures, the interest rate on the Series H Debentures was reset to 3.342% per year, and interest is payable on March 1 and September 1 of each year, commencing September 1, 2018. In connection with the settlement of the contracts to purchase NEE common stock that were issued as components of the September 2015 equity units, in the third quarter of 2018, NEE issued 6,215,998 shares of common stock in exchange for $700 million.

Prior to the issuance of NEE’s common stock, the stock purchase contracts, if dilutive, 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.