UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of earliest event reported: July 30, 2000
<TABLE><CAPTION>
Exact name of Registrants as specified in their IRS Employer
Commission charters, addresses of principal executive Identification
File Number offices and Registrants' phone number Number
<S> <C> <C>
1-8841 FPL GROUP, INC. 59-2449419
1-3545 FLORIDA POWER & LIGHT COMPANY 59-0247775
700 Universe Boulevard
Juno Beach, Florida 33408
(561) 694-4000
</TABLE>
State or other jurisdiction of incorporation: Florida
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995
This Form 8-K contains forward-looking statements within the meaning of the
safe harbor provisions of the United States Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such forward-looking
statements with respect to revenues, earnings, performance, strategies,
prospects and other aspects of the businesses of FPL Group, Inc. and Entergy
Corporation are based on current expectations that are subject to risk and
uncertainties. A number of factors could cause actual results or outcomes
to differ materially from those indicated by such forward-looking
statements. These factors include, but are not limited to, risks and
uncertainties relating to: changes in laws or regulations, changing
governmental policies and regulatory actions with respect to allowed rates
of return including but not limited to return on equity and equity ratio
limits, industry and rate structure, operation of nuclear power facilities,
acquisition, disposal, depreciation and amortization of assets and
facilities, operation and construction of plant facilities, recovery of fuel
and purchased power costs, decommissioning costs, present or prospective
wholesale and retail competition (included but not limited to retail
wheeling and transmission costs), political and economic risks, changes in
and compliance with environmental and safety laws and policies, weather
conditions (including natural disasters such as hurricanes), population
growth rates and demographic patterns, competition for retail and wholesale
customers, availability, pricing and transportation of fuel and other energy
commodities, market demand for energy from plants or facilities, changes in
tax rates or policies or in rates of inflation or in accounting standards,
unanticipated delays or changes in costs for capital projects, unanticipated
changes in operating expenses and capital expenditures, capital market
conditions, competition for new energy development opportunities and legal
and administrative proceedings (whether civil, such as environmental, or
criminal) and settlements and other factors. Readers are referred to FPL
Group, Inc.'s, Florida Power & Light Company's and Entergy Corporation's
most recent reports filed with the Securities and Exchange Commission.
Item 5. Other Events
FPL Group, Inc., a Florida corporation (FPL Group), Entergy Corporation, a
Delaware corporation (Entergy), WCB Holding Corp., a Delaware corporation,
50% of whose outstanding capital stock is owned by FPL Group and 50% of
whose outstanding capital stock is owned by Entergy (the Company), Ranger
Acquisition Corp., a Florida corporation and a wholly-owned subsidiary of
the Company (Merger Sub A), and Ring Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of the Company (Merger Sub B),
entered into an Agreement and Plan of Merger dated as of July 30, 2000 (the
Agreement). Each of FPL Group and Entergy is sometimes referred to herein
as a "party". The description of the Agreement set forth herein does not
purport to be complete and is qualified in its entirety by reference to the
Agreement. Capitalized terms not defined herein shall have the meaning set
forth in the Agreement.
Pursuant to the terms of the Agreement, Merger Sub A will merge with and
into FPL Group (the FPL Merger). FPL Group will be the surviving
corporation in the FPL Merger and will become a wholly-owned subsidiary of
the Company. Merger Sub B will merge with and into Entergy (the Entergy
Merger, and together with the FPL Merger, the Mergers). Entergy will be the
surviving corporation in the Entergy Merger and will also become a wholly-
owned subsidiary of the Company. The Mergers were unanimously approved by
both the FPL Group Board of Directors and the Entergy Board of Directors.
FPL Group and Entergy will seek to consummate the Mergers by late 2001.
Under the terms of the Agreement, at the effective time of the Mergers (the
Effective Time), each outstanding share of FPL Group common stock (other
than shares held by FPL Group, Entergy or the Company) will be converted
into the right to receive one share of Company common stock and each
outstanding share of Entergy common stock (other than shares held by FPL
Group, Entergy or the Company) will be converted into the right to receive
0.585 of a share of Company common stock. In addition, at the Effective
Time, each share of Company common stock issued and outstanding immediately
prior to the Effective Time will be cancelled.
The Mergers are subject to customary closing conditions, including, without
limitation, the receipt of the required approvals of the shareholders of FPL
Group and Entergy, there being no injunction, restraining order or law in
effect which prevents the consummation of the Mergers, the Form S-4 being
effective and not the subject of any stop order or proceeding seeking a stop
order, the shares of Company common stock issuable in the Mergers having
been approved for listing on the NYSE and all necessary governmental
approvals having been received and all necessary governmental filings having
been made, including the consent or approval of certain state utility
regulators, the approvals of the Federal Energy Regulatory Commission, the
Securities and Exchange Commission under the Public Utility Holding Company
Act of 1935 and the Nuclear Regulatory Commission, and the filing of the
requisite notification with the Federal Trade Commission and the Department
of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The Agreement contains certain covenants of the parties applicable during
the period pending the consummation of the Mergers. Generally, each party
and its subsidiaries are obligated to carry on its business in the ordinary
course consistent with past practice. The Agreement contains certain
restrictions on each party including limitations on or procedures for:
amendments to the corporate charter documents of FPL Group or Entergy or any
of their respective subsidiaries, declaration and payment of dividends,
issuance of securities, acquisitions, capital expenditures, dispositions,
incurrence or guarantee of indebtedness, trading or marketing of energy,
modification of employee benefits, modifications of existing agreements or
course of dealings with governmental authorities, changes in accounting
policies and maintenance of insurance. FPL Group and Entergy each generally
will be permitted to take actions pursuant to restructuring legislation in
their respective states of operation and reorganize their transmission
businesses.
The Agreement prohibits, with certain exceptions, either party and its
subsidiaries from initiating, soliciting or knowingly encouraging, or
knowingly taking any other action designed to facilitate, any inquiries or
the making of any Entergy Takeover Proposal or FPL Takeover Proposal, as the
case may be (hereinafter referred to as a Takeover Proposal), or participate
in any negotiations or substantive discussions regarding any Takeover
Proposal. If, at any time prior to receipt of such party's shareholder
approval, the party's Board of Directors determines in good faith, after
consultation with its legal and financial advisors, that a Takeover Proposal
that was not solicited in violation of the Agreement is, or is reasonably
likely to lead to, an Entergy Superior Proposal or FPL Superior Proposal, as
the case may be (hereinafter referred to as a Superior Proposal), then,
after providing prior written notice of its decision to take such action to
the other party and otherwise complying with the applicable provisions of
the Agreement, the party may: (i) furnish information with respect to itself
and its subsidiaries to the person making such proposal pursuant to a
customary confidentiality agreement containing terms no less favorable than
those set forth in the confidentiality agreement between FPL Group and
Entergy and (ii) participate in discussions or negotiations regarding such
proposal. The Agreement requires that each party, its subsidiaries and
their representatives immediately terminate any existing activities,
discussions or negotiations with any parties with respect to any Takeover
Proposal.
Neither the Board of Directors of a party nor any committee thereof shall:
(i) withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to the other party, the approval or recommendation of the
Mergers, by such Board of Directors, (ii) approve or recommend, or propose
publicly to approve or recommend, any Takeover Proposal, or (iii) cause such
party to enter into any agreement (an Acquisition Agreement) related to any
Takeover Proposal. In response to a Takeover Proposal that is not obtained
in violation of the Agreement, at any time prior to receipt of such party's
shareholder approval, the Board of Directors of such party may, if it
determines in good faith after consulting with outside counsel that the
failure to take such action would be reasonably likely to result in a breach
of the Board of Directors' fiduciary obligations to its shareholders under
applicable law, (i) withdraw or modify, or propose publicly to withdraw or
modify, the approval or recommendation by such Board of Directors or any
committee thereof of the Mergers, (ii) approve or recommend, or propose to
approve or recommend, any Superior Proposal, or (iii) terminate the
Agreement. However, such actions can only be taken if, in the case of each
of clauses (ii) and (iii), such Board of Directors determines in good faith
that such Takeover Proposal constitutes a Superior Proposal and, in the case
of clause (iii), (A) such party has notified the other in writing of its
determination that such Takeover Proposal constitutes a Superior Proposal
and (B) at least seven business days following receipt by such party of such
notice, the Board of Directors of such party determines that such Superior
Proposal remains a Superior Proposal.
At the Effective Time, the Board of Directors of the Company will consist of
eight directors designated by FPL Group and seven directors designated by
Entergy. The first vacancy on the Board that occurs with respect to a FPL
Designee following the 12-month anniversary of the Effective Time and prior
to the third annual shareholders' meeting of the Company that occurs
following the end of the calendar year in which the Effective Time occurs
will not be filled and, instead, the number of directors will be reduced by
one. Any increase or decrease in the size of the Board of Directors or
change to the above-mentioned mechanism would require the affirmative vote
of at least two-thirds of the entire Board of Directors. Following the
Effective Time, (i) a subcommittee consisting of the remaining members of
the Board appointed by FPL Group will recommend replacements for a Board
vacancy of a member designated by FPL Group, and (ii) a subcommittee
consisting of the remaining members of the Board appointed by Entergy will
recommend replacements for a Board vacancy of a member designated by
Entergy. The Board is required to honor the subcommittee's recommendations
to fill vacancies during such period. Any changes to this procedure will
require the affirmative vote of at least two-thirds of the entire Board of
Directors. The provisions described in this paragraph will no longer be
applicable following the earlier of (a) the time at which the size of the
Board is reduced by one and (b) the third annual shareholders' meeting of
the Company that occurs following the end of the calendar year in which the
Effective Time occurs.
From the Effective Time until the first anniversary of the Effective Time,
pursuant to the terms of the employment agreements entered into between the
Company and each of James L. Broadhead and J. Wayne Leonard, (i) Mr.
Broadhead will be Chairman of the Board of the Company (serving in an
executive capacity) and (ii) Mr. Leonard will be CEO and President of the
Company. Following the first anniversary of the Effective Time and prior to
the third annual shareholders' meeting of the Company following the calendar
year in which the Effective Time occurs, (i) Mr. Broadhead will be Chairman
of the Board of the Company (serving in a non-executive capacity) and (ii)
Mr. Leonard will be CEO and President of the Company. At the Effective
Time, each of Robert v.d. Luft and an FPL Group designee will be appointed
to the position of Vice Chairman of the Board of the Company.
At the Effective Time, the name of the Company will be a new name agreed
upon between the Boards of Directors of FPL Group and Entergy prior to the
Effective Time. The Company will maintain its principal corporate offices
and headquarters in Juno Beach, Florida, and will maintain its utility
headquarters in New Orleans, Louisiana.
The Agreement may be terminated under certain circumstances, including: (i)
if the Mergers have not occurred by April 30, 2002; provided that the
termination date will be extended until October 31, 2002 if the only closing
condition not satisfied at April 30, 2002 is that relating to obtaining all
required regulatory and governmental approvals; (ii) if the requisite
shareholder approvals have not been obtained; (iii) if any temporary
restraining order or preliminary or permanent injunction or other order by
any court preventing, or applicable law prohibiting, consummation of the
Mergers is in effect and is final and nonappealable; provided that the party
seeking to terminate the Agreement must have used its reasonable best
efforts to prevent the entry of and to remove such restraint; (iv) if the
other party has breached any representations, warranties or covenants, and
such breaches, individually or in the aggregate, (A) give rise to the
failure of the closing condition that the representations and warranties be
true or that the covenants be complied with at the Effective Time, and (B)
are incapable of being cured by such breaching party or are not cured by
such breaching party within 30 days following receipt of written notice from
the other party of such breach or failure to perform; (v) if the applicable
Board determines in good faith that a Takeover Proposal constitutes a
Superior Proposal; provided that, in order for the termination of the
Agreement to be deemed effective, the terminating party must have complied
with the applicable provisions of the Agreement and paid the required
Termination Fee (described below); (vi) if the other party, or any of the
other party's directors or officers, participate in discussions or
negotiations relating to a Takeover Proposal; (vii) if the other party's
Board of Directors (a) withdraws or modifies, or proposes publicly to
withdraw or modify, the approval or recommendation by such Board of
Directors of the Agreement or the Mergers, (b) fails to reaffirm such
approval or recommendation within 10 business days of receipt of the
terminating party's written request at any time when a Takeover Proposal
relating to the other party shall have been made and not rejected by the
Board of Directors of such other party or (c) approves or recommends, or
proposes to approve or recommend, a Takeover Proposal; or (viii) if any
condition to the obligation of such party to consummate the Mergers becomes
incapable of satisfaction prior to closing; provided that the failure of
such condition is not the result of a material breach of the Agreement by
the party seeking to terminate the Agreement.
A party will become obligated to pay the other party a termination fee of
$215 million (the Termination Fee) if (i) following a party's shareholders
meeting, a Takeover Proposal is made for such party, thereafter the
Agreement is terminated by either FPL Group or Entergy due to the Effective
Time not occurring prior to the termination date, and within 12 months after
the termination of the Agreement, such party enters into an Acquisition
Agreement or consummates a Takeover Proposal with the party who submitted
the Takeover Proposal referred to above, (ii) prior to or during the such
party's shareholders meeting, a Takeover Proposal for such party is made,
thereafter the Agreement is terminated by either FPL Group or Entergy
because approval of the shareholders of the party receiving the Takeover
Proposal was not obtained, and within 24 months thereafter such party enters
into an Acquisition Agreement or consummates a Takeover Proposal with any
third party, (iii) the Agreement is terminated by a party pursuant to the
provision permitting termination for a Superior Proposal, or (iv) the
Agreement is terminated by a party because the Board of Directors of the
other party (A) withdraws or modifies, or proposes publicly to withdraw or
modify, its approval or recommendation of the Agreement or the Mergers, or
(B) approves or recommends, or proposes to approve or recommend, a Takeover
Proposal.
If the Termination Fee becomes payable to a party in accordance with the
above-described provisions, the party paying the Termination Fee will be
obligated to reimburse the other party for its fees and expenses in
connection with the Mergers, up to a maximum of $25 million.
Reference is made to FPL Group's Form 8-K filed July 31, 2000, which
attached as Exhibits 2.1, 10.1, 10.2 and 99.1 respectively, copies of the
Agreement, the employment agreement between Mr. Broadhead and the Company,
the employment agreement between Mr. Leonard and the Company and a joint
press release of FPL Group and Entergy announcing the execution of the
Agreement.
Item 7. Financial Statements and Exhibits
The following selected unaudited pro forma combined condensed consolidated
financial statements (pro forma financial statements) have been prepared to
reflect the merger of FPL Group and Entergy in a transaction accounted for
as an acquisition of Entergy under the purchase method of accounting. The
pro forma adjustments are reflected in the unaudited combined condensed
consolidated pro forma balance sheets (pro forma balance sheets) as if the
Mergers occurred on June 30, 2000. The unaudited combined condensed
consolidated pro forma statements of income (pro forma income statements)
for the six months ended June 30, 2000 and the year ended December 31, 1999
assume that the Mergers were completed January 1, 1999. These pro forma
financial statements are for illustrative purposes only. They are not
necessarily indicative of the financial position or operating results that
would have occurred had these transactions been completed on the dates
assumed above; nor is the information necessarily indicative of future
financial position or operating results. Results of operations and
financial position in the first year after the consummation could differ
significantly from the pro forma financial statements, which are based on
past operations.
The following pro forma financial statements should be read in conjunction
with the consolidated historical financial statements and related notes of
FPL Group and Entergy, which are included in their respective Annual Reports
on Form 10-K for the year ended December 31, 1999 and subsequent Quarterly
Reports on Form 10-Q. Entergy has provided all the information included in
this Form 8-K regarding Entergy and its subsidiaries. FPL Group has
provided all the information included in this Form 8-K regarding FPL Group
and its subsidiaries. Neither Entergy nor FPL Group assumes any
responsibility for the accuracy or completeness of the information provided
by the other party.
Unaudited Pro Forma Combined Condensed Consolidated Statements of Income
Six Months Ended June 30, 2000
(millions, except per share amounts)
<TABLE><CAPTION>
Entergy
FPL Group, Inc. Corporation Pro Forma Pro Forma
(as reported) (as reported) Adjustments Combined
<S> <C> <C> <C>
Operating Revenues ..................... $ 3,138 $ 3,949 $ 7,087
Operating Expenses:
Fuel, purchased power and interchange 1,146 1,834 2,980
Other operations and maintenance ..... 593 843 1,436
Depreciation and amortization ........ 525 389 $ (8) A 909
(4) B
7 B
Taxes other than income taxes ........ 291 163 454
Total operating expenses ........... 2,555 3,229 (5) 5,779
Operating Income ....................... 583 720 5 1,308
Other Income (Deductions)
Interest charges ..................... (126) (264) (390)
Preferred stock dividends ............ (7) (27) (34)
Other - net 34 140 174
Total other income (deductions) - net (99) (151) (250)
Income Before Income Taxes ............. 484 569 5 1,058
Income Taxes ........................... 159 233 2 C 394
Net Income ............................. $ 325 $ 336 $ 3 $ 664
Earnings per share
(basic and assuming dilution) .......... $ 1.91 $ 1.45 $ 2.17
Average number of shares outstanding.... 170 232 306 D
</TABLE>
Unaudited Pro Forma Combined Consensed Consolidated Statements of Income
Year Ended December 31, 1999
(millions, except per share amounts)
<TABLE><CAPTION>
Entergy
FPL Group, Inc. Corporation Pro Forma Pro Forma
(as reported) (as reported) Adjustments Combined
<S> <C> <C> <C> <C>
Operating Revenues ..................... $ 6,438 $ 8,773 $ 15,211
Operating Expenses:
Fuel, purchased power and interchange 2,365 4,526 6,891
Other operations and maintenance ..... 1,322 1,789 3,111
Depreciation and amortization ........ 1,040 867 $ (16) A 1,897
(8) B
14 B
Impairment loss on Maine assets ...... 176 - 176
Taxes other than income taxes ........ 615 339 954
Total operating expenses ........... 5,518 7,521 (10) 13,029
Operating Income ....................... 920 1,252 10 2,182
Other Income (Deductions)
Interest charges ..................... (222) (536) (758)
Preferred stock dividends ............ (15) (62) (77)
Divestiture of cable investments ..... 257 - 257
Other - net .......................... 80 255 335
Total other income (deductions) - net 100 (343) (243)
Income Before Income Taxes ............. 1,020 909 10 1,939
Income Taxes ........................... 323 357 3 C 683
Net Income ............................. $ 697 $ 552 $ 7 $ 1,256
Earnings per share
(basic and assuming dilution)........... $ 4.07 $ 2.25 $ 3.99
Average number of shares outstanding.... 171 245 315 D
</TABLE>
Unaudited Pro Forma Combined Condensed Consolidated Balance Sheets
June 30, 2000
(millions)
<TABLE><CAPTION>
Entergy
FPL Group, Inc. Corporation Pro Forma Pro Forma
(as reported) (as reported) Adjustments Combined
<S> <C> <C> <C> <C>
Property, Plant and Equipment:
Electric utility plant in service and other property,
including nuclear fuel and construction work in
progress ........................................ $ 20,220 $ 27,442 $ (399) A $ 47,113
(150) B
Less accumulated depreciation and amortization ..... (10,764) (11,248) (22,012)
Total property, plant and equipment - net ........ 9,456 16,194 (549) 25,101
Current Assets:
Cash and cash equivalents .......................... 234 1,797 2,031
Customer receivables, net of allowances ............ 578 1,022 1,600
Materials, supplies and fossil fuel inventory ...... 320 481 801
Deferred clause expenses ........................... 259 395 654
Other - net ........................................ 219 186 405
Total current assets ............................. 1,610 3,881 5,491
Other Assets:
Special use funds .................................. 1,449 1,284 2,733
Other investments .................................. 782 264 1,046
Other .............................................. 899 2,701 416 B 4,016
Total other assets ............................... 3,130 4,249 416 7,795
Total Assets ......................................... $ 14,196 $ 24,324 $ (133) $ 38,387
Capitalization:
Common shareholders' equity ........................ $ 5,499 $ 6,934 $(6,903) E $ 12,134
6,650 E
(46) F
Preferred stock without sinking fund requirements .. 226 336 562
Preferred stock with sinking fund requirements ..... - 69 69
Long-term debt ..................................... 3,479 7,593 11,072
Total capitalization ............................. 9,204 14,932 (299) 23,837
Current Liabilities:
Debt due within one year ........................... 823 630 1,453
Accounts payable ................................... 547 797 1,344
Deferred clause revenues ........................... 74 - 74
Accrued interest, taxes and other .................. 984 1,380 253 F 2,617
Total current liabilities ........................ 2,428 2,807 253 5,488
Other Liabilities and Deferred Credits:
Accumulated deferred income taxes .................. 1,176 3,224 (58) C 4,313
(29) C
Unamortized regulatory and investment tax credits .. 289 506 795
Other .............................................. 1,099 2,855 3,954
Total other liabilities and deferred credits ..... 2,564 6,585 (87) 9,062
Commitments and Contingencies
Total Capitalization and Liabilities ................. $ 14,196 $ 24,324 $ (133) $ 38,387
</TABLE>
Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial
Statements
The pro forma financial statements have been prepared using preliminary
assessments of the fair values of the assets and liabilities acquired and,
accordingly, may change significantly as the valuations are completed. The
pro forma adjustments may also change to reflect changes in circumstances
during the period of time required to obtain the necessary approvals for the
Mergers. The pro forma financial statements do not reflect the anticipated
recurring cost savings resulting from the Mergers or the effect of FPL Group
and Entergy's announced share repurchase programs. Certain amounts in
Entergy's financial statements have been reclassified to conform to FPL
Group's presentation.
A. A plant acquisition adjustment (goodwill) resulting from a prior
acquisition by Entergy and the related amortization expense have been
eliminated.
B. Based on preliminary estimates of the fair values of certain unregulated
generating assets, net reductions in book value of approximately $150
million are reflected in the pro forma balance sheets to record those
assets at their fair values. Depreciation expense has been reduced in
the pro forma income statement on a straight-line basis over the average
remaining useful life of 20 years. The assets and liabilities of
Entergy's regulated operations will not be revalued because they are
subject to cost-based regulation.
Complete valuations of Entergy's operating assets and related contracts
and the pension and postretirement accounts have not been performed. As
a result, the purchase price in excess of the amounts assigned to
identifiable assets and liabilities of $416 million has been recorded as
goodwill for purposes of these pro forma financial statements. The
estimated lives associated with the assets to which this excess might
ultimately be allocated are expected to range from 20 to 40 years.
Therefore, for pro forma purposes, an amortization period of 30 years
has been used.
Actual goodwill, if any, recorded upon consummation of the Mergers will
consider the fair value of Entergy's assets and liabilities at that
future date and may differ significantly from the amount recorded in
these pro forma financial statements.
C. Deferred income taxes have been recorded on the pro forma balance sheets
to reflect the tax effect of differences between the book and tax bases
of assets and liabilities acquired. An adjustment has been made to the
pro forma income statements to reflect the tax effect of the pro forma
adjustments using FPL Group's statutory tax rate of 38.575%. Goodwill
created by the acquisition is nondeductible for tax purposes.
D. The number of shares used in the calculation of the pro forma per share
data is based on the weighted average number of shares outstanding
during the period, adjusted to give effect to the exchange ratios
described in Note E below.
E. Under the terms of the Agreement, each holder of FPL Group common stock
will receive one share of the new holding company for each share of FPL
Group common stock, and each holder of Entergy common stock will receive
0.585 of a share of the new holding company for each share of Entergy
common stock, in a tax-free, stock-for-stock exchange. A value of $51
per share has been assumed in determining the purchase price, based on
the closing prices of FPL Group's common stock two trading days prior
and two trading days following the announcement of the Mergers.
Below is a reconciliation of the pro forma adjustment to Entergy's
common shareholders' equity (millions):
<TABLE><CAPTION>
<C> <S>
Entergy's common shareholders' equity, June 30, 2000 (as reported) $6,934
Non-recurring merger costs to be expensed by Entergy, net of tax (see Note F) (31)
Net pro forma adjustment $6,903
</TABLE>
F. Adjustments totaling $253 million have been made and are reflected in
accrued interest, taxes and other on the pro forma balance sheets to
accrue for transaction costs associated with the acquisition and amounts
due under certain of Entergy's employment contracts and employee benefit
plans resulting from a change in control. Of this amount, $178 million
represents direct costs of the transaction and is reflected in the
purchase price allocation. The remaining $75 million represents merger-
related costs which are required to be expensed. Because these costs
are non-recurring, they have not been reflected in the pro forma income
statements, but are reflected in common shareholders' equity on the pro
forma balance sheets ($46 million after taxes). FPL Group's and
Entergy's portions of these merger costs to be expensed are $15 million
and $31 million after taxes, respectively.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
FPL Group, Inc.
Florida Power & Light Company
(Registrants)
Date: August 2, 2000 K. MICHAEL DAVIS
K. Michael Davis
Controller and Chief Accounting Officer of FPL Group, Inc.
Vice President, Accounting, Controller and
Chief Accounting Officer of Florida Power & Light Company
