NEXTERA ENERGY INCNEE
NEXTERA ENERGY INC Debt Disclosure
Debt
Long-term debt consists of the following:
December 31, | |||||||||||||||
2019 | 2018 | ||||||||||||||
Maturity Date | Balance | Weighted- Average Interest Rate | Balance | Weighted- Average Interest Rate | |||||||||||
(millions) | (millions) | ||||||||||||||
FPL: | |||||||||||||||
First mortgage bonds - fixed | 2020-2049 | $ | 12,005 | 4.46 | % | $ | 10,626 | 4.60 | % | ||||||
Storm-recovery bonds - fixed | — | 74 | 5.26 | % | |||||||||||
Pollution control, solid waste disposal and industrial development revenue bonds - primarily variable(a) | 2020-2049 | 1,076 | 1.67 | % | 1,022 | 2.04 | % | ||||||||
Senior unsecured notes - variable(b)(c) | 2022-2069 | 1,236 | 2.18 | % | 193 | 2.40 | % | ||||||||
Unamortized debt issuance costs and discount | (156 | ) | (132 | ) | |||||||||||
Total long-term debt of FPL | 14,161 | 11,783 | |||||||||||||
Less current portion of long-term debt | 30 | 95 | |||||||||||||
Long-term debt of FPL, excluding current portion | 14,131 | 11,688 | |||||||||||||
GULF POWER: | |||||||||||||||
Senior unsecured notes - fixed | 2020-2044 | 990 | 4.17 | % | — | ||||||||||
Other long-term debt - primarily variable(a) | 2021-2049 | 709 | 1.93 | % | — | ||||||||||
Unamortized debt issuance costs and discount | (14 | ) | — | ||||||||||||
Total long-term debt of Gulf Power | 1,685 | — | |||||||||||||
Less current portion of long-term debt | 175 | — | |||||||||||||
Long-term debt of Gulf Power, excluding current portion | 1,510 | — | |||||||||||||
NEER: | |||||||||||||||
NextEra Energy Resources: | |||||||||||||||
Senior secured limited-recourse long-term debt - primarily variable(c)(d) | 2023-2049 | 3,419 | 3.79 | % | 4,193 | 4.38 | % | ||||||||
Other long-term debt - primarily variable(c)(d) | 2024-2040 | 440 | (e) | 3.78 | % | 601 | 2.57 | % | |||||||
NEET - long-term debt - primarily fixed(d) | 2021-2049 | 837 | 3.50 | % | 325 | 3.73 | % | ||||||||
Unamortized debt issuance costs and premium - net | (74 | ) | (95 | ) | |||||||||||
Total long-term debt of NEER | 4,622 | 5,024 | |||||||||||||
Less current portion of long-term debt | 215 | 602 | |||||||||||||
Long-term debt of NEER, excluding current portion | 4,407 | 4,422 | |||||||||||||
NEECH: | |||||||||||||||
Debentures - fixed(d) | 2020-2029 | 9,550 | 3.05 | % | 4,300 | 3.21 | % | ||||||||
Debentures - variable(c) | 2020-2022 | 1,375 | 3.00 | % | 2,341 | 3.11 | % | ||||||||
Debentures, related to NEE's equity units - fixed | 2024 | 1,500 | 2.10 | % | 1,500 | 1.65 | % | ||||||||
Junior subordinated debentures - primarily fixed(d) | 2057-2079 | 4,643 | 5.13 | % | 3,456 | 4.99 | % | ||||||||
Japanese yen denominated long-term debt - primarily variable(c)(d)(f) | 2020-2030 | 645 | 3.10 | % | 637 | 3.10 | % | ||||||||
Australian dollar denominated long-term debt - fixed(f) | 2026 | 351 | 2.59 | % | — | ||||||||||
Other long-term debt - fixed | 2020-2021 | 524 | 2.00 | % | 543 | 1.95 | % | ||||||||
Other long-term debt - variable(c) | 2021 | 750 | 2.60 | % | — | ||||||||||
Unamortized debt issuance costs and discount | (139 | ) | (86 | ) | |||||||||||
Total long-term debt of NEECH | 19,199 | 12,691 | |||||||||||||
Less current portion of long-term debt | 1,704 | 2,019 | |||||||||||||
Long-term debt of NEECH, excluding current portion | 17,495 | 10,672 | |||||||||||||
Total long-term debt | $ | 37,543 | $ | 26,782 | |||||||||||
______________________
(a) | Includes 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 or Gulf Power, as the case may be, would be required to purchase the variable rate tax exempt bonds. At December 31, 2019, variable rate tax exempt bonds totaled approximately $948 million at FPL and $269 million at Gulf Power. All variable rate tax exempt bonds tendered for purchase have been successfully remarketed. FPL's and Gulf Power's syndicated revolving credit facilities, as the case may be, 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. Gulf Power's remaining debt is primarily variable which is based on an underlying index plus a margin. |
(b) | Includes approximately $236 million of floating rate notes that permit individual noteholders to require repayment prior to maturity. FPL’s syndicated revolving credit facilities are available to support the purchase of the senior unsecured notes. |
(c) | Variable rate is based on an underlying index plus a specified margin. |
(d) | Interest rate contracts, primarily swaps, have been entered into with respect to certain of these debt issuances. See Note 4. |
(e) | Excludes approximately $463 million classified as held for sale, which is included in current other liabilities on NEE's consolidated balance sheets. See Note 1 - Disposal of Businesses/Assets. |
(f) | Foreign currency contracts have been entered into with respect to these debt issuances. See Note 4. |
Minimum annual maturities of long-term debt for NEE are approximately $2,124 million, $4,323 million, $4,134 million, $1,700 million and $3,380 million for 2020, 2021, 2022, 2023 and 2024, respectively. The respective amounts for FPL are approximately $30 million, $68 million, $1,120 million, $537 million and $672 million.
At December 31, 2019 and 2018, short-term borrowings had a weighted-average interest rate of 1.95% (1.80% for FPL) and 2.95% (2.87% for FPL), respectively. Subsidiaries of NEE, including FPL, had credit facilities with available capacity at December 31, 2019 of approximately $10.8 billion ($3.6 billion for FPL), of which approximately $10.7 billion ($3.6 billion for FPL) relate to revolving line of credit facilities and $0.1 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, 2019 of up to approximately $2.3 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. In January 2020, FPL repaid commercial paper of approximately $1.2 billion with proceeds from a capital contribution from NEE.
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 subsidiaries within the NEER segment.
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.
In August 2019, NEECH completed a remarketing of $1.5 billion aggregate principal amount of its Series I Debentures due September 1, 2021 (Series I Debentures) that were issued in August 2016 as components of equity units issued concurrently by NEE (August 2016 equity units). The Series I Debentures are fully and unconditionally guaranteed by NEE. In connection with the remarketing of the Series I Debentures, the interest rate on the Series I Debentures was reset to 2.403% per year, and interest is payable on March 1 and September 1 of each year, commencing September 1, 2019. In connection with the settlement of the contracts to purchase NEE common stock that were issued as components of the August 2016 equity units, in the third quarter of 2019, NEE issued 9,543,000 shares of common stock in exchange for $1.5 billion.
In September 2019, 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 J Debenture due September 1, 2024, 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, 2022 (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 $224.12 to $280.15. If purchased on the final settlement date, as of December 31, 2019, the number of shares issued would (subject to antidilution adjustments) range from 0.2231 shares if the applicable market value of a share of common stock is less than or equal to $224.12 to 0.1785 shares if the applicable market value of a share is equal to or greater than $280.15, with applicable market value to be determined using the average closing prices of NEE common stock over a 20-day trading period ending August 29, 2022. Total annual distributions on the equity units are at the rate of 4.872%, consisting of interest on the debentures (2.10% per year) and payments under the stock purchase contracts (2.772% per year). The interest rate on the debentures is expected to be reset on or after March 1, 2022. 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.
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.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2019 | Feb 14, 2020 | Showing above |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 23, 2017 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.