FPL Group
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Entergy
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Transaction Overview
o Tax-free, stock-for-stock transaction
Terms: o Each holder of FPL Group common stock will receive
1.00 share of the new holding company
o Each holder of Entergy common stock will receive 0.585
of a share of the new holding company
o Accounted for as a purchase
o Total enterprise value of more than $27 billion;
market capitalization of $16.4 billion based on
Combined Company closing stock prices on July 28, 2000
Financials: o The transaction will be immediately accretive to both
companies
o Average annual earnings per share growth of 10% or
more
o FPL Group and Entergy have authorized share repurchase
Share Buy-Back: programs totaling $1 billion to be implemented prior
to the close of the merger. The programs ($570
million at FPL Group and $430 million at Entergy)
include remaining authorizations from the companies'
existing share repurchase programs
o The newly combined company expects to pay a dividend
Dividend: that is consistent with FPL Group's current dividend
policy. Based on FPL Group's current annual dividend
of $2.16 per share, Entergy's shareholders would
receive $1.26 per share on an as-converted basis
compared to Entergy's current dividend of $1.20 per
share
Synergies: o Annual synergies growing from $150 million to $275
million over the first few years after closing
o Of the total, the regulated businesses should
realize annual cost savings of $110 million to $150
million, derived from eliminating duplicate corporate
and administrative positions and programs, as well as
procurement economies
o The competitive businesses expect annual cost savings
and revenue enhancements of $40 million to $125
million
o Additionally, the competitive businesses expect to
realize annual capital expenditure savings of $50
million to $100 million
o James L. Broadhead, FPL Group Chairman and CEO, to
Management become Chairman
& Board: o J. Wayne Leonard, Entergy CEO, to become President and
CEO
o Board to consist of 15 members: 8 from FPL and 7 from
Entergy
Approval o Approval by shareholders of both companies
Process: o SEC, FERC, FCC, NRC, HSR
o The completion of regulatory procedures in Arkansas,
Florida, Louisiana, Mississippi, Texas and the city
of New Orleans
o The companies' objective is to complete the
transaction within 15 months
o Corporate headquarters will be located in Juno Beach,
Headquarters: FL
o Utility Group headquarters will be located in New
Orleans, LA
o Each of the company's six utilities will continue to
maintain its headquarters at its present location
