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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
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MIC-Info: RSA-MD5,RSA,
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Commission |
Exact name of registrant as specified in its |
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700 Universe Boulevard Juno Beach, Florida 33408 (561) 694-4000 |
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SECTION 2 - FINANCIAL INFORMATION
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On December 19, 2006, Lone Star Wind, LLC (Lone Star Wind), an indirect wholly-owned subsidiary of FPL Energy, LLC (FPL Energy), entered into a credit facility consisting of a $600 million limited-recourse senior secured variable rate term loan maturing in January 2022 and a $100 million ten year letter of credit facility. FPL Energy is an indirect wholly-owned subsidiary of FPL Group, Inc. (FPL Group). Principal and interest on the loan are payable semi-annually. Substantially all of the net proceeds from the loan will be distributed to FPL Energy in return for a portion of the capital contributions that it made to certain of its direct and indirect subsidiaries for their investment in the development, acquisition and/or construction of three wind power projects located in Texas. The loan is secured by liens on the wind projects' assets and certain other assets of, and the ownership interest in, Lone Star Wind. The loan agreement cont ains default provisions relating to failure to make required payments, certain events in bankruptcy and other covenants applicable to Lone Star Wind. FPL Group Capital Inc (FPL Group Capital), a wholly-owned subsidiary of FPL Group, has guaranteed certain payments with respect to production tax credits and renewable energy credits generated by the projects, and certain contingent payment obligations related to the projects. Pursuant to its 1998 guarantee agreement with FPL Group Capital, FPL Group guarantees these FPL Group Capital payment guarantees. The letter of credit facility serves as security for certain obligations under commodity hedge agreements entered into at closing by Lone Star Wind pursuant to the terms of the loan agreement.
SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT
Item 5.02 Departure of Directors or Certain Officers; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On December 15, 2006, the Board of Directors of FPL Group appointed James L. Robo, age 44, as President and Chief Operating Officer of FPL Group. Mr. Robo had served as President of FPL Energy since July 2002 and as Vice President, Corporate Development and Strategy of FPL Group since March 2002. Prior to joining FPL Group, Mr. Robo was President and Chief Executive Officer of TIP, a GE Capital company that provides trailer and storage equipment services, and GE Capital Modular Space, a supplier of mobile and modular buildings. No changes were made to Mr. Robo's compensation for 2006 in connection with the December 15 appointment. The elements of 2007 compensation for Mr. Robo that have thus far been determined are described below. Other elements of his 2007 compensation are expected to be determined by FPL Group's Compensation Committee in 2007.
Effective December 15, 2006, the employment agreement dated as of February 25, 2005 between Lewis Hay, III and FPL Group, as amended on December 15, 2005 (employment agreement), was further amended in connection with the appointment of James L. Robo to President and Chief Operating Officer of FPL Group. Pursuant to the amendment, FPL Group is no longer required to appoint Mr. Hay as President of FPL Group and Mr. Hay may no longer terminate his employment for "good reason" (as defined in the employment agreement) if he is not appointed as President of FPL Group.
On December 15, 2006, FPL Group's Compensation Committee (i) approved base salary levels for the named executive officers of FPL Group and its subsidiaries for the year beginning January 1, 2007 and (ii) approved corporate net income goals, corporate performance indicators and target award percentages for 2007 for those officers under FPL Group's Annual Incentive Plan, as more fully described below:
(1) Executive Compensation: The Compensation Committee approved 2007 base salaries for the executive officers named in FPL Group's 2006 proxy statement as follows:
Name |
2007 Annual Base Salary |
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Lewis Hay, III |
$ |
1,207,500 |
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James L. Robo |
700,000 |
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Armando J. Olivera |
567,758 |
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Moray P. Dewhurst |
556,394 |
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John A. Stall |
508,040 |
(2) Annual Incentive Plan actions: Annual incentive compensation is based on the attainment of net income goals for FPL Group, which are established by the Compensation Committee at the beginning of the year, and adjusted for specified items including any regulatory or legislative changes or changes in accounting principles, any changes in the mark-to-market value of non-qualifying hedges, extraordinary items, discontinued operations, acts of God, labor disruptions and certain charges or gains (adjusted net income). The amounts earned on the basis of this performance measure are subject to reduction based on the degree of achievement of other corporate and subsidiary performance measures, and at the discretion of the Compensation Committee. For 2007, the Compensation Committee approved adjusted net income goals for FPL Group and the following corporate performance indicators for Florida Power & Light Company (FPL) and FPL Energy. For FPL, the performance measures are financial indicators and operating indicators. The financial indicators are operations and maintenance costs, capital expenditure levels, adjusted net income and regulatory return on equity. The operating indicators are service reliability as measured by the frequency and number of service interruptions and service unavailability; system reliability as measured by availability factors for the fossil power plants and an industry composite performance index for the nuclear power plants; employee safety; number of significant environmental violations; and customer satisfaction survey results. For FPL Energy, the performance measures are a financial indicator, operating indicators and growth indicators. The financial indicators are FPL Energy adjusted net income and the attainment of budgeted cost targets; the operating indicators are employee safety; number of significant environmental violations; an industry composite perfo rmance index for the nuclear power plants, equivalent forced outage rate, and level of hedged margin; and the growth indicators include the attainment of targets for wind development or acquisition, new growth opportunities and growth in power marketing.
The target awards (as a percent of base salary) for Messrs. Hay, Olivera, Dewhurst and Stall remain the same as for 2006. The target award (as a percent of base salary) for Mr. Robo was increased from 70% to 80% in connection with his promotion to President and Chief Operating Officer of FPL Group.
SECTION 7 - REGULATION FD
Item 7.01 Regulation FD Disclosure
On December 20, 2006, FPL Energy issued a press release announcing that it reached an agreement to purchase a two-unit, 1,033-megawatt nuclear power plant located near Two Rivers, Wisconsin from Wisconsin Electric Power Company, a subsidiary of Wisconsin Energy Corporation. The transaction is subject to, among other things, the receipt of approvals from various federal and state regulatory agencies and FPL Energy expects to close the acquisition in the third quarter of 2007. A copy of the press release is attached as Exhibit 99, which is incorporated herein by reference.
SECTION 8 - OTHER EVENTS
Item 8.01 Other Events
On December 20, 2006, FPL Energy entered into an agreement to purchase the Point Beach Nuclear Power Plant (Point Beach), a two-unit, 1,033-megawatt nuclear power plant located near Two Rivers, Wisconsin, from Wisconsin Electric Power Company (Wisconsin Electric), a subsidiary of Wisconsin Energy Corporation.
Under the terms of the agreement, a wholly-owned subsidiary of FPL Energy will purchase Point Beach for a total of approximately $998 million, including nuclear fuel, inventory and other items. All of the power from Point Beach will be sold under a long-term contract to Wisconsin Electric through the current license terms of 2030 for Unit 1 and 2033 for Unit 2. FPL Energy will assume responsibility for decommissioning of the nuclear facility and will receive no less than $360 million in decommissioning funds at the time of closing. Wisconsin Electric has the option to transfer additional decommissioning funds to FPL Energy for an additional purchase price adjustment. Also upon closing, FPL Energy will assume management and operation of Point Beach.
The transaction is subject to, among other things, the receipt of approvals from various federal and state regulatory agencies and FPL Energy expects to close the acquisition in the third quarter of 2007.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
The following exhibit is being furnished pursuant to Item 7.01 herein.
Exhibit |
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99 |
FPL Energy, LLC Press Release dated December 20, 2006 |
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), FPL Group, Inc. (FPL Group) and Florida Power & Light Company (FPL) are hereby providing cautionary statements identifying important factors that could cause FPL Group's or FPL's actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of FPL Group and FPL in this Form 8-K, on their respective websites, in response to questions or otherwise. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as will likely result, are expected to, will continue, is anticipated, believe, could, estimated, may, plan, potential, projection, target, outlook) are not statements of historical facts and may be forward-looking. Forward-looking s tatements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could cause FPL Group's or FPL's actual results to differ materially from those contained in forward-looking statements made by or on behalf of FPL Group and FPL.
Any forward-looking statement speaks only as of the date on which such statement is made, and FPL Group and FPL undertake no obligation to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date on which such statement is made. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.
The following are some important factors that could have a significant impact on FPL Group's and FPL's operations and financial results, and could cause FPL Group's and FPL's actual results or outcomes to differ materially from those discussed in the forward-looking statements:
FPL Group and FPL are subject to complex laws and regulations and to changes in laws and regulations as well as changing governmental policies and regulatory actions, including initiatives regarding deregulation and restructuring of the energy industry and environmental matters. FPL holds franchise agreements with local municipalities and counties, and must renegotiate expiring agreements. These factors may have a negative impact on the business and results of operations of FPL Group and FPL.
The operation and maintenance of power generation facilities, including nuclear facilities, involve significant risks that could adversely affect the results of operations and financial condition of FPL Group and FPL.
The construction of, and capital improvements to, power generation facilities involve substantial risks. Should construction or capital improvement efforts be unsuccessful, the results of operations and financial condition of FPL Group and FPL could be adversely affected.
The use of derivative contracts by FPL Group and FPL in the normal course of business could result in financial losses that negatively impact the results of operations of FPL Group and FPL.
FPL Group's competitive energy business is subject to risks, many of which are beyond the control of FPL Group, that may reduce the revenues and adversely impact the results of operations and financial condition of FPL Group.
FPL Group's ability to successfully identify, complete and integrate acquisitions is subject to significant risks, including the effect of increased competition for acquisitions resulting from the consolidation of the power industry.
Because FPL Group and FPL rely on access to capital markets, the inability to maintain current credit ratings and access capital markets on favorable terms may limit the ability of FPL Group and FPL to grow their businesses and would likely increase interest costs.
Customer growth in FPL's service area affects FPL Group's results of operations.
Weather affects FPL Group's and FPL's results of operations.
FPL Group and FPL are subject to costs and other effects of legal proceedings as well as changes in or additions to applicable tax laws, rates or policies, rates of inflation, accounting standards, securities laws and corporate governance requirements.
Threats of terrorism and catastrophic events that could result from terrorism may impact the operations of FPL Group and FPL in unpredictable ways.
The ability of FPL Group and FPL to obtain insurance and the terms of any available insurance coverage could be affected by national, state or local events and company-specific events.
FPL Group and FPL are subject to employee workforce factors that could affect the businesses and financial condition of FPL Group and FPL.
The risks described herein are not the only risks facing FPL Group and FPL. Additional risks and uncertainties not currently known to FPL Group or FPL, or that are currently deemed to be immaterial, also may materially adversely affect FPL Group's or FPL's business, financial condition and/or future operating results.
SIGNATURE
FPL GROUP, INC.
(Registrant)
Date: December 21, 2006
EDWARD F. TANCER |
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Edward F. Tancer |
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Vice President & General Counsel of FPL Group, Inc. |
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Exhibit 99 |
FPL Energy, LLC
Corporate Communications
Media Line: (888) 867-3050
Dec 20, 2006
FOR IMMEDIATE RELEASE
FPL Energy announces agreement to purchase Point Beach Nuclear Power Plant
JUNO BEACH Fla.
- FPL Energy, LLC, a subsidiary of FPL Group, Inc. (NYSE: FPL) announced today it has reached an agreement to purchase the two-unit,1,033-megawatt Point Beach Nuclear Power Plant located near Two Rivers, Wisconsin, about 30 miles southeast of Green Bay, from Wisconsin Electric Power Company (dba as We Energies), a subsidiary of Wisconsin Energy Corporation (NYSE: WEC).
Under the terms of the agreement, a wholly-owned subsidiary of FPL Energy will purchase the Point Beach Nuclear Power Plant for a total of approximately $998 million, including nuclear fuel, inventory and other items. The $998 million price represents $783 million for the plant itself and $215 million for fuel, inventory and other items.
Upon closing, FPL Energy will assume management and operation of Point Beach from Nuclear Management Company and will work with them to ensure a smooth transition.
Jim Robo, president and chief operating officer of FPL Group, said, "We are excited to add the Point Beach Nuclear Power Plant to our power generation portfolio and pleased to further expand our relationship with We Energies, an important customer for whom we've been providing clean, renewable wind power for several years.
"This plant will further diversify our generating fleet and supports our strategy of building a diversified, well-hedged portfolio. Point Beach provides us with another low-cost, emission-free, baseload generation source in the Midwest and complements our existing nuclear and wind assets in the region."
All of the power from the Point Beach Nuclear Power Plant will be sold under a long-term contract to We Energies through the current NRC license terms of 2030 for Unit 1 and 2033 for Unit 2. The power from Point Beach is competitively priced and escalates each year of the contract.
FPL Energy will assume responsibility for eventual decommissioning of the plant. Decommissioning funds transferred to FPL Energy at closing will be no less than $360 million. We Energies will retain the non-qualified nuclear decommissioning trust. We Energies has the option to transfer more than $360 million to FPL Energy for an additional purchase price adjustment.
FPL Energy expects to close the acquisition in the third quarter of 2007. Financing for the acquisition will be integrated into FPL Group's overall financing program with a continued commitment to strong credit quality. The acquisition is expected to be immediately accretive to earnings per share in the first three years, and increasingly so thereafter.
Point Beach is comprised of two pressurized water reactors totaling 1,033 megawatts of capacity. Point Beach Unit 1 began commercial operation in December 1970; Unit 2 in March 1973. In December 2005, the U.S. Nuclear Regulatory Commission renewed the operating licenses for Units 1 and 2 through 2030 and 2033, respectively (20-year extensions). The plant is in good material condition. The reactor vessel heads and steam generators have been replaced in both units.
The Point Beach Nuclear Power Plant currently has approximately 660 full-time employees. FPL Energy has agreed to retain non-bargaining unit employees at Point Beach at comparable wages and benefits for 18 months following the close of the sale. In addition, FPL Energy will honor all labor agreements for bargaining unit employees.
"FPL Energy has been a member of the Wisconsin community for several years through our ownership and operation of our Montfort Wind Energy Center. We have a strong track record of community involvement and giving back to the communities where we operate. We look forward to developing new opportunities and partnerships due to our ownership of Point Beach," said Robo.
Approvals for the transaction are needed from federal and state regulatory agencies, including the Nuclear Regulatory Commission, the Public Service Commission of Wisconsin as well as the Federal Energy Regulatory Commission, Department of Justice clearance under the Hart Scott Rodino Antitrust Improvements Act of 1976 and various other regulatory bodies.
FPL Energy will utilize the experience of the Point Beach team, as well as the experience gained operating the 592-megawatt Duane Arnold Energy Center in Iowa, the 1,220-megawatt Seabrook Station in New Hampshire, and the expertise of the FPL Group nuclear team to manage and operate the plant.
The addition of Point Beach will nearly double FPL Energy's owned power generation in the Midwest. The company currently owns and operates more than 660 megawatts of wind power throughout Wisconsin, Iowa, North Dakota, South Dakota, Minnesota, and Kansas. In addition, FPL Energy owns a majority interest in the Duane Arnold Energy Center and operates the plant.
In addition to the Duane Arnold nuclear plant in Iowa, FPL Energy currently operates and owns a majority interest in the Seabrook nuclear plant in New Hampshire. FPL Group's other subsidiary, Florida Power & Light Company, operates four nuclear units in Florida at two sites, Turkey Point and St. Lucie, representing 1,386 megawatts and 1,678 megawatts, respectively.
Seabrook, Duane Arnold, Turkey Point and St. Lucie have traditionally ranked among the highest in safety and operational performance based upon the Nuclear Regulatory Commission's safety indicators as well as the World Association of Nuclear Operators' overall performance index.
"FPL Group's Nuclear Division has an excellent track record operating nuclear power plants safely and reliably," said Art Stall, senior vice president of FPL Group's Nuclear Division. "FPL Group and Point Beach nuclear programs are focused on safety and continuous improvement. We look forward to working with Point Beach employees in further providing safe, clean and reliable nuclear power to the Wisconsin market for many years to come."
FPL Energy also announced today that it was providing two wind energy options for We Energies. The first allows We Energies to select FPL Energy to equip and construct the We Energies Blue Sky Green Field Wind Project in northeastern Fond du Lac County. This project is currently under regulatory review. The second option allows We Energies to acquire a site under development by FPL Energy in central Wisconsin. We Energies may exercise either of these options independent of the sale of Point Beach.
FPL Energy was advised by J.P. Morgan Securities Inc. as exclusive financial advisor, and represented in the transaction by Pillsbury Winthrop Shaw Pittman, LLP.
###
06112
FPL Group has scheduled a conference call for 9 a.m. ET on Wednesday, Dec. 20, 2006 to discuss the transaction. The webcast is available on FPL Group's website by accessing the following link, http://www.FPLGroup.com/investor/contents/investor_index.shtml
. The slides accompanying the presentation may be downloaded at "http://www.FPLGroup.com/">www.FPLGroup.com beginning at 7:30 a.m. ET today. For persons unable to listen to the live webcast, a replay will be available for 14 days by accessing the same link as listed above.
FPL Group, with annual revenues of more than $12 billion, is nationally known as a high-quality, efficient, and customer-driven organization focused on energy-related products and services. With a growing presence in 26 states, it is widely recognized as one of the country's premier power companies. Its principal subsidiary, Florida Power & Light Company, serves more than 4.4 million customer accounts in Florida. FPL Energy, LLC, FPL Group's competitive energy subsidiary, is a leader in producing electricity from clean and renewable fuels. Additional information is available on the Internet at www.FPLGroup.com, www.FPL.com and www.FPLEnergy.com.
Cautionary Statements And Risk Factors That May Affect Future Results
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), FPL Group, Inc. (FPL Group) and Florida Power & Light Company (FPL) are hereby providing cautionary statements identifying important factors that could cause FPL Group's or FPL's actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of FPL Group and FPL in this press release, on their respective websites, in response to questions or otherwise. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as will likely result, are expected to, will continue, is anticipated, believe, could, estimated, may, plan, potential, projection, target, outlook) are not statements of historical facts and may be forward-looking. Forward-look ing statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could cause FPL Group's or FPL's actual results to differ materially from those contained in forward-looking statements made by or on behalf of FPL Group and FPL.
Any forward-looking statement speaks only as of the date on which such statement is made, and FPL Group and FPL undertake no obligation to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date on which such statement is made. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.
The following are some important factors that could have a significant impact on FPL Group's and FPL's operations and financial results, and could cause FPL Group's and FPL's actual results or outcomes to differ materially from those discussed in the forward-looking statements:
FPL Group and FPL are subject to complex laws and regulations and to changes in laws and regulations as well as changing governmental policies and regulatory actions, including initiatives regarding deregulation and restructuring of the energy industry and environmental matters. FPL holds franchise agreements with local municipalities and counties, and must renegotiate expiring agreements. These factors may have a negative impact on the business and results of operations of FPL Group and FPL.
The operation and maintenance of power generation facilities, including nuclear facilities, involve significant risks that could adversely affect the results of operations and financial condition of FPL Group and FPL.
The construction of, and capital improvements to, power generation facilities involve substantial risks. Should construction or capital improvement efforts be unsuccessful, the results of operations and financial condition of FPL Group and FPL could be adversely affected.
The use of derivative contracts by FPL Group and FPL in the normal course of business could result in financial losses that negatively impact the results of operations of FPL Group and FPL.
FPL Group's competitive energy business is subject to risks, many of which are beyond the control of FPL Group, that may reduce the revenues and adversely impact the results of operations and financial condition of FPL Group.
FPL Group's ability to successfully identify, complete and integrate acquisitions is subject to significant risks, including the effect of increased competition for acquisitions resulting from the consolidation of the power industry.
Because FPL Group and FPL rely on access to capital markets, the inability to maintain current credit ratings and access capital markets on favorable terms may limit the ability of FPL Group and FPL to grow their businesses and would likely increase interest costs.
Customer growth in FPL's service area affects FPL Group's results of operations.
Weather affects FPL Group's and FPL's results of operations.
FPL Group and FPL are subject to costs and other effects of legal proceedings as well as changes in or additions to applicable tax laws, rates or policies, rates of inflation, accounting standards, securities laws and corporate governance requirements.
Threats of terrorism and catastrophic events that could result from terrorism may impact the operations of FPL Group and FPL in unpredictable ways.
The ability of FPL Group and FPL to obtain insurance and the terms of any available insurance coverage could be affected by national, state or local events and company-specific events.
FPL Group and FPL are subject to employee workforce factors that could affect the businesses and financial condition of FPL Group and FPL.
The risks described herein are not the only risks facing FPL Group and FPL. Additional risks and uncertainties not currently known to FPL Group or FPL, or that are currently deemed to be immaterial, also may materially adversely affect FPL Group's or FPL's business, financial condition and/or future operating results.
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