JUNO BEACH, Fla., May 21, 2018 /PRNewswire/ -- NextEra Energy, Inc.
(NYSE: NEE) today announced it has entered into definitive
agreements with Southern Company (NYSE: SO) to acquire Gulf Power,
Florida City Gas and its ownership interests in the Oleander and
Stanton natural-gas generating plants located in Florida in transactions valued at
approximately $6.475 billion,
including the assumption of approximately $1.4 billion of Gulf Power debt. The companies
are expected to benefit from NextEra Energy's industry-leading
operating capabilities, with an intense focus on continuous
improvement and a culture of innovation.
"We are pleased to have reached definitive agreements with
Southern Company to acquire Gulf Power and Florida City Gas, along
with Southern Company's Oleander and Stanton facilities," said
Jim Robo, chairman and chief
executive officer of NextEra Energy. "These transactions will
provide meaningful benefits for the state of Florida, and Gulf
Power and Florida City Gas customers, as well as NextEra Energy
shareholders. Importantly, these transactions are consistent with
our long-standing, disciplined approach of maintaining the strength
of our balance sheet and credit ratings, both of which are among
the strongest in the industry. Following the financing of the
transactions and as a result of expanding our regulated operations,
we expect to continue to maintain $5
billion to $7 billion of
excess balance sheet capacity with which to further support our
long-term growth. We are raising our 2020 and 2021 adjusted
earnings per share expectations by $0.15 and $0.20,
respectively, upon closing and will be disappointed if we are not
able to deliver financial results at or near the top end of these
revised ranges. We look forward to updating the Florida Public
Service Commission and other key stakeholders in the state and
believe our deep operating expertise in Florida, strong financial profile and track
record of and commitment to making smart, long-term capital
investments offer uniquely compelling advantages for Gulf Power and
Florida City Gas customers."
Delivering benefits to Gulf Power and Florida City Gas
customers
As one of the nation's largest and cleanest
electric companies, Florida Power
& Light Company (FPL) serves nearly five million customer
accounts or an estimated 10 million people across nearly half of
the state of Florida. FPL's typical residential customer bill is
approximately 20 percent below the other Florida investor-owned
utilities and nearly 30 percent below the national average. In
2017, FPL delivered its best-ever full-year period of service
reliability and was recognized as being the most reliable electric
utility in the Southeast. FPL also has a proven track record of
making smart investments in modernizing its power generation fleet
and strengthening its energy grid. NextEra Energy's culture of
continuous improvement and focus on smart investments that reduce
operations and maintenance (O&M) expenses has helped drive
significant productivity enhancements, which has resulted in FPL's
industry-leading cost position. For the past four years, FPL has
had the lowest non-fuel O&M cost per kilowatt-hour in the
country.
NextEra Energy expects to employ its long-term strategy of
advancing affordable, reliable and clean energy and making smart
infrastructure investments at Gulf Power and Florida City Gas. By
deploying its industry-leading skills, knowledge and capabilities,
NextEra Energy expects to extend over time its best-in-class value
proposition of low bills, clean energy, high reliability and
outstanding customer service to the approximately 600,000 total
customers of Gulf Power and Florida City Gas.
Delivering benefits to NextEra Energy
shareholders
NextEra Energy expects the transactions to be
immediately accretive to earnings upon closing and $0.15 and $0.20
accretive to its 2020 and 2021 adjusted earnings per share (EPS)
expectations, respectively. As a result, upon closing of the
transactions, NextEra Energy expects its 2020 adjusted EPS
expectations to be in a range of $8.70 to $9.20 and
its 2021 adjusted EPS expectations to be in a range of $9.40 to $9.95.
NextEra Energy intends to finance the approximately $5.1 billion purchase price through the issuance
of new debt. NextEra Energy has reviewed the transactions with the
credit rating agencies and, based upon these discussions, following
the financing of the transactions and as a result of the expansion
of the company's regulated operations, NextEra Energy is expected
to continue to maintain $5 billion to
$7 billion of excess balance sheet
capacity, while maintaining its current strong credit ratings.
With the addition of Gulf Power, Florida City Gas and the two
Florida-based, natural-gas plants, NextEra Energy will be even
better positioned to generate long-term shareholder value through a
more robust financial profile, greater scale and an expanded
platform for growth.
Transaction details, approvals and timeline
Through
the transactions, NextEra Energy will acquire:
- Gulf Power, which serves approximately 450,000 customers in
eight counties throughout northwest Florida and has roughly 9,500
miles of power lines and 2,300 megawatts (MW) of electric
generating capacity;
- Florida City Gas, which serves approximately 110,000
residential and commercial natural-gas customers in Florida's
Miami-Dade, Brevard, St.
Lucie and Indian River
counties with 3,700 miles of natural gas pipelines;
- 100 percent ownership interest in Plant Oleander, a natural-gas
fueled, simple-cycle combustion turbine electric generation plant
located near Cocoa, Florida, with
a generating capacity of 791 MW and power purchase agreements with
the Florida Municipal Power Agency and Seminole Electric
Cooperative; and
- 65 percent ownership interest in Stanton Energy Center, a
combined-cycle electric generating unit, with a generating capacity
of approximately 660 MW, located near Orlando, Florida. The 65 percent interest is
contracted with the Orlando Utilities Commission and Florida
Municipal Power Agency.
The acquisitions of Gulf Power and the ownership interests in
the Oleander and Stanton generating plants are subject to receipt
of approval from the Federal Energy Regulatory Commission and the
expiration or termination of the waiting period under the
Hart-Scott-Rodino Act. The Florida City Gas acquisition is subject
to the expiration or termination of the waiting period under the
Hart-Scott-Rodino Act and is conditioned on the consummation of
Southern Company's previously announced dispositions of the
Elizabethtown Gas and Elkton Gas divisions of Southern Company Gas.
Pending receipt of required approvals and other customary
conditions and approvals, NextEra Energy expects to complete the
acquisition of Florida City Gas in the third quarter of this year,
with the Gulf Power and natural-gas generating plant acquisitions
anticipated to close in the first half of 2019.
NextEra Energy's management uses adjusted earnings, which is a
non-GAAP financial measure, internally for financial planning,
analysis of performance, reporting of results to the board of
directors and as an input in determining performance-based
compensation under the company's employee incentive compensation
plans. NextEra Energy also uses earnings expressed in this fashion
when communicating its financial results and earnings outlook to
analysts and investors. NextEra Energy's management believes that
adjusted earnings provide a more meaningful representation of
NextEra Energy's fundamental earnings power. Adjusted earnings
expectations exclude the effect of certain items, such as
nonqualifying hedges and unrealized gains and losses on equity
securities held in NextEra Energy Resources' nuclear
decommissioning funds, none of which can be determined at this
time.
Advisors
BofA Merrill Lynch, acting as the lead, and
Goldman Sachs & Co. LLC are serving as financial advisors to
NextEra Energy. In addition, Wachtell, Lipton, Rosen & Katz is
acting as counsel, and Skadden, Arps, Slate, Meagher and Flom, LLC
is acting as regulatory counsel to NextEra Energy.
Analyst and investor webcast and conference
call
NextEra Energy will host a conference call and webcast
to discuss this announcement at 8:30 a.m.
ET today. The listen-only webcast will be available on
NextEra Energy's website by accessing the following link:
www.NextEraEnergy.com/investors. The presentation for the
webcast may be downloaded
at www.NextEraEnergy.com/investors, beginning at
7:30 a.m. ET today. A replay will be
available by accessing the same link as listed above.
NextEra Energy, Inc.
NextEra Energy, Inc. (NYSE: NEE)
is a leading clean energy company with consolidated revenues of
approximately $17.2 billion, operates
approximately 46,790 megawatts of net generating capacity and
employs approximately 14,000 people in 33 states and Canada as of year-end 2017. Headquartered in
Juno Beach, Florida, NextEra
Energy's principal subsidiaries are Florida
Power & Light Company, which serves approximately 5
million customer accounts in Florida and is one of the largest
rate-regulated electric utilities in the
United States, and NextEra Energy Resources, LLC, which,
together with its affiliated entities, is the world's largest
generator of renewable energy from the wind and sun. Through its
subsidiaries, NextEra Energy generates clean, emissions-free
electricity from eight commercial nuclear power units in
Florida, New Hampshire, Iowa and Wisconsin. A Fortune 200 company and included
in the S&P 100 index, NextEra Energy has been recognized often
by third parties for its efforts in sustainability, corporate
responsibility, ethics and compliance, and diversity, and has been
ranked No. 1 in the electric and gas utilities industry in
Fortune's 2018 list of "World's Most Admired Companies." For more
information about NextEra Energy companies, visit these websites:
www.NextEraEnergy.com, www.FPL.com,
www.NextEraEnergyResources.com
Forward-Looking Statements
This document contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are typically identified by words or phrases such as
"may," "will," "anticipate," "estimate," "expect," "project,"
"intend," "plan," "believe," "predict," and "target" and other
words and terms of similar meaning. Forward-looking statements
involve estimates, expectations, projections, goals, forecasts,
assumptions, risks and uncertainties. NEE cautions readers that any
forward-looking statement is not a guarantee of future performance
and that actual results could differ materially from those
contained in any forward-looking statement. Such forward-looking
statements include, but are not limited to, statements about the
anticipated benefits of the proposed acquisitions from Southern
Company of Gulf Power Company, Florida City Gas and two gas-fired
plants (Southern Company assets), including future financial or
operating results of NEE or the Southern Company assets, NEE's or
the Southern Company assets' plans, objectives, expectations or
intentions, the expected timing of completion of the transactions,
the value of the transactions, as of the completion of the
transactions or as of any other date in the future, and other
statements that are not historical facts. Important factors that
could cause actual results to differ materially from those
indicated by any such forward-looking statements include risks and
uncertainties relating to: the risk that NEE or Southern Company
may be unable to obtain governmental and regulatory approvals
required for the transactions, or required governmental and
regulatory approvals may not be obtained on expected terms or in
the time period anticipated and delay the transactions or result in
the imposition of conditions that are not anticipated and could
cause the parties to abandon the transactions; the risk that a
condition to closing of the transactions may not be satisfied; the
expected timing to consummate the proposed transactions; the risk
that the businesses will not be integrated successfully; disruption
from the transactions making it more difficult to maintain
relationships with customers, employees or suppliers; the diversion
of management time and attention on transaction-related issues;
general worldwide economic conditions and related uncertainties;
the effect and timing of changes in laws or in governmental
regulations (including environmental); fluctuations in trading
prices of securities of NEE and in the financial results of NEE or
the Southern Company assets; the timing and extent of changes in
interest rates, commodity prices and demand and market prices for
electricity or gas; and other factors discussed or referred to in
the "Risk Factors" section of NEE's or Southern Company's most
recent Annual Reports on Form 10-K filed with the Securities and
Exchange Commission. Additional risks and uncertainties are
identified and discussed in NEE's and Southern Company's reports
filed with the SEC and available at the SEC's website at
www.sec.gov. Each forward-looking statement speaks only as of the
date of the particular statement and NEE does not undertake any
obligation to update or revise its forward-looking statements,
whether as a result of new information, future events or
otherwise.
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