Filed pursuant to Rule 424(b)(5)
Registration Statement Nos. 333-75482 and
333-75482-01 and Registration Statement Nos.
333-85218 and 333-85218-01
Preliminary Subject to Completion
Prospectus Supplement dated June 3, 2002
PROSPECTUS SUPPLEMENT
(To prospectus dated April 24, 2002)
5,000,000 SHARES
[FPL GROUP LOGO OMITTED]
COMMON STOCK
----------------
FPL Group, Inc. is offering 5,000,000 shares of its common stock. FPL
Group's common stock is listed on the New York Stock Exchange, or NYSE, under
the symbol "FPL." On May 31, 2002, the last reported sale price of FPL Group's
common stock on the NYSE was $62.99 per share.
Under a separate prospectus supplement, FPL Group is concurrently
offering up to 9,200,000 Equity Units. The Equity Units will initially be in the
form of Corporate Units, consisting of debentures of FPL Group Capital Inc, a
wholly-owned subsidiary of FPL Group, and contracts to purchase shares of FPL
Group's common stock on or about February 16, 2006. The offerings of the Equity
Units and the common stock are not contingent upon each other.
----------------
Per Share Total
--------- -----
Public offering price........................... $ $
Underwriting discount........................... $ $
Proceeds to FPL Group (before expenses)......... $ $
The underwriters may also purchase up to an additional 750,000 shares
of common stock at the public offering price less the underwriting discount
within 30 days of the date of this prospectus supplement in order to cover
overallotments, if any.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement and the accompanying prospectus are truthful or complete.
Any representation to the contrary is a criminal offense.
Delivery of the shares of common stock is expected to be made on or
about _________, 2002.
----------------
Joint Book-Running Managers
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
Senior Co-Managers
LEHMAN BROTHERS
JPMORGAN
SALOMON SMITH BARNEY
Co-Managers
WACHOVIA SECURITIES
SCOTIA CAPITAL
ROBERTSON STEPHENS
THE WILLIAMS CAPITAL GROUP, L.P.
CREDIT LYONNAIS SECURITIES (USA) INC.
BNY CAPITAL MARKETS, INC.
MELLON FINANCIAL MARKETS, LLC
SUNTRUST ROBINSON HUMPHREY
----------------
The date of this prospectus supplement is ________, 2002.
-------------------
The information in this preliminary prospectus supplement is not complete and
may be changed. Neither this preliminary prospectus supplement nor the
accompanying prospectus is an offer to sell these securities and neither is
soliciting any offer to buy these securities in any jurisdiction where the offer
or sale is not permitted.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Page
----
Prospectus Supplement Summary...........................................S-3
Significant Issues Affecting the Energy Industry and FPL Group..........S-6
Selected Consolidated Income Statement Data of FPL Group and
Subsidiaries.........................................................S-8
Consolidated Capitalization of FPL Group and Subsidiaries...............S-9
Common Stock Dividends and Price Range.................................S-10
Use of Proceeds........................................................S-11
Underwriting...........................................................S-11
PROSPECTUS
About this Prospectus.....................................................2
Where You Can Find More Information.......................................2
Incorporation by Reference................................................2
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995.....................................................3
FPL Group Capital.........................................................4
FPL Group.................................................................4
Use of Proceeds...........................................................4
Consolidated Ratio of Earnings to Fixed Charges...........................4
Description of Offered Debt Securities....................................5
Description of the Guarantee.............................................15
Description of Common Stock..............................................16
Description of Stock Purchase Contracts and Stock Purchase Units.........20
Plan of Distribution.....................................................21
Experts..................................................................21
Legal Opinions...........................................................22
THE ACCOMPANYING PROSPECTUS IS PART OF A REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD RELY ONLY ON THE INFORMATION
INCORPORATED BY REFERENCE OR PROVIDED IN THIS PROSPECTUS SUPPLEMENT AND IN THE
ACCOMPANYING PROSPECTUS. FPL GROUP HAS NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU
WITH ADDITIONAL OR DIFFERENT INFORMATION. FPL GROUP IS NOT MAKING AN OFFER OF
THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT OR IN THE
ACCOMPANYING PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE
FRONT OF THOSE DOCUMENTS, OR THAT THE INFORMATION INCORPORATED BY REFERENCE IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE OF THE DOCUMENT INCORPORATED BY
REFERENCE.
S-2
PROSPECTUS SUPPLEMENT SUMMARY
You should read the following summary in conjunction with the more
detailed information incorporated by reference or provided in this prospectus
supplement or in the accompanying prospectus. This prospectus supplement and the
accompanying prospectus contain forward-looking statements (as that term is
defined in the Private Securities Litigation Reform Act of 1995).
Forward-looking statements should be read with the cautionary statements and
important factors included in the accompanying prospectus under the heading
"Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995."
FPL GROUP AND SUBSIDIARIES
FPL GROUP
FPL Group is a public utility holding company headquartered in Juno
Beach, Florida. FPL Group's principal subsidiary, Florida Power & Light Company
is a regulated utility engaged in the generation, transmission, distribution and
sale of electric energy. FPL Group Capital Inc is a wholly-owned subsidiary of
FPL Group which owns and provides funding for FPL Group's unregulated operating
subsidiaries, the majority of which are engaged in independent power projects.
FPL Energy, LLC is a wholly-owned subsidiary of FPL Group Capital formed to
aggregate existing unregulated energy-related operations. FPL Energy's
participation in the U.S. domestic energy market includes ownership interests
in, and the development, construction, management and operation of, energy
projects with a net generating capacity of over 5,000 megawatts at year-end
2001. FPL FiberNet, LLC is also a wholly-owned subsidiary of FPL Group Capital
and is involved in the sale of wholesale fiber-optic network capacity. The
organizational structure of FPL Group and its principal subsidiaries is shown in
the following diagram.
[ORGANIZATION CHART OMITTED]
S-3
FLORIDA POWER & LIGHT COMPANY
Florida Power & Light Company is FPL Group's largest operating
subsidiary, contributing approximately 88% of FPL Group's consolidated revenues
for 2001. Florida Power & Light Company supplies electric service throughout
most of the east and lower west coasts of Florida. At March 31, 2002, Florida
Power & Light Company served more than 4.0 million customer accounts.
At December 31, 2001, about 93% of Florida Power & Light Company's
revenues came from residential customers and commercial customers--which include
small businesses. Only 3% of Florida Power & Light Company's total revenues came
from industrial customers.
FPL GROUP CAPITAL
FPL Group Capital holds the capital stock and provides funding for the
operating subsidiaries of FPL Group other than Florida Power & Light Company.
The business activities of those operating subsidiaries primarily consist of FPL
Energy's independent power projects as well as FPL FiberNet.
FPL ENERGY
FPL Energy was formed in 1998 to aggregate FPL Group's existing
unregulated energy-related operations. FPL Energy owns, develops, constructs,
manages and operates domestic electric-generating facilities. As of March 31,
2002, FPL Energy had ownership interests in operating independent power projects
with a net generating capacity of 5,063 megawatts. Generation capacity spans
various regions thereby reducing seasonal volatility on a portfolio basis. The
percentage of capacity by region is 36% Central, 28% Northeast, 20% Mid-Atlantic
and 16% West. Fuel sources for these projects are 46% natural gas, 28% wind, 15%
oil, 7% hydro and 4% other.
FPL FIBERNET
FPL FiberNet was formed in January 2000 to enhance the value of FPL
Group's fiber-optic network assets that were originally built to support Florida
Power & Light Company operations. In January 2000, Florida Power & Light
Company's existing fiber-optic lines were transferred to FPL FiberNet. FPL
FiberNet sells wholesale fiber-optic network capacity to Florida Power & Light
Company and other new and existing customers, primarily telephone, cable
television, internet and other telecommunications companies. At March 31, 2002,
FPL FiberNet's network consisted of approximately 2,500 route miles of fiber
which interconnect major cities throughout Florida.
RECENT DEVELOPMENTS
FPL Group announced on April 15, 2002 that it had reached an agreement
to buy a majority interest in the Seabrook Nuclear Generating Station
("Seabrook") from a consortium of owners. Under the terms of the agreement, FPL
Group will purchase an 88.2% interest, or 1,024 megawatts, in Seabrook for a
total of $836.6 million. FPL Group expects that the transaction will close by
the end of 2002, pending approvals from federal and state regulatory agencies.
Seabrook, a 1,161-megawatt pressurized water reactor that began operating in
1990, is located in New Hampshire and provides approximately 7% of the
electrical power in New England.
In connection with the redemption in 1999 of its one-third ownership
interest in Olympus Communications, L.P. ("Olympus"), an indirect subsidiary of
FPL Group has a note receivable from a limited partnership, of which Olympus is
a general partner. The note receivable is secured by a pledge of the redeemed
ownership interest. Olympus is an indirect subsidiary of Adelphia Communications
Corporation ("Adelphia"). The note receivable plus accrued interest totaled
approximately $127 million at March 31, 2002, and is due on July 1, 2002. On
May 17, 2002, Olympus announced that it missed an interest payment due May 15,
2002 on senior notes. Also on May 17, 2002, Adelphia announced that it missed
interest and dividend payments due on May 15, 2002 on senior notes and
convertible preference stock. On May 31, 2002, Adelphia announced that its
failure to deliver certain financial information and related compliance
certificates to various financial institutions under certain credit agreements
of its subsidiaries has resulted in events of default under those agreements and
that a Nasdaq Listing Qualifications Panel made a determination on May 30, 2002,
based on Adelphia's filing delinquencies and other public interest concerns, to
S-4
delist Adelphia's common stock from the Nasdaq Stock Market, effective with the
open of business on June 3, 2002.
Based on the most recent publicly available financial information set
forth in Olympus' Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2001, total assets of Olympus exceeded liabilities by
approximately $3.6 billion and Olympus served 1,787,000 basic subscribers.
Olympus has not filed its Annual Report on Form 10-K for the fiscal year ended
December 31, 2001 or its Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2002 with the Securities and Exchange Commission (SEC), and
consequently the September 30, 2001 financial information may not be indicative
of Olympus' current financial position. It has been reported that the SEC is
investigating Adelphia's accounting and disclosure practices relating to
off-balance sheet loans. FPL Group is monitoring these developments.
CONCURRENT OFFERING
In addition to the shares of FPL Group's common stock offered by this
prospectus supplement, FPL Group is concurrently offering up to 9,200,000 Equity
Units (initially consisting of 9,200,000 Corporate Units) by a separate
prospectus supplement. Each Corporate Unit will have a stated amount of $50 and
initially will consist of (a) a contract to purchase shares of FPL Group's
common stock for $50 and (b) an FPL Group Capital debenture with a principal
amount of $50. Assuming that the underwriters for that offering exercise in full
their option to purchase additional Equity Units, FPL Group may issue between
_____________ and ____________ shares of its common stock (depending upon the
applicable market value of the common stock) on February 16, 2006, which is the
purchase contract settlement date relating to the Equity Units. This offering of
common stock and the Equity Units offering are not contingent upon each other.
S-5
SIGNIFICANT ISSUES AFFECTING THE ENERGY INDUSTRY AND FPL GROUP
There are a number of significant issues affecting the energy industry
and FPL Group. Before purchasing the common stock offered by this prospectus
supplement, investors should carefully consider these issues and each of the
risks and uncertainties associated with these issues, as they relate to FPL
Group. These issues and the risks and uncertainties associated with these issues
should be read in conjunction with the documents incorporated by reference into
this prospectus supplement and the accompanying prospectus. These issues
include:
o FPL Group's energy-related businesses operate in a changing
market environment. Various states, other than Florida, have
taken measures to deregulate the production and sale of
electricity, and other states, including Florida, have from time
to time explored deregulation. These markets are subject to
change, and FPL Group and its subsidiaries will need to adapt to
these changes and may face increasing competitive pressure. To
the extent that competition increases, FPL Group's businesses may
be negatively affected.
o In the future, there may be various legislative and regulatory
actions that could impact both FPL Group's regulated and
unregulated businesses. Such actions could have significant
impact on FPL Group's operations and financial results.
o There can be significant volatility in market prices for fuel and
electricity, and there are other financial, counterparty and
market risks that are beyond the control of FPL Group. FPL
Group's inability or failure to effectively hedge its assets or
positions against changes in commodity prices, interest rates,
counterparty credit risk or other risk measures could
significantly impair its future financial results. In addition,
in keeping with industry trends, a portion of FPL Energy's power
generation facilities operate wholly or partially without
long-term power purchase agreements. As a result, power from
these facilities is sold on the spot market or on a short-term
contractual basis which may affect the volatility of FPL Group's
financial results.
o FPL Energy's business depends on transmission facilities owned
and operated by others to deliver the power FPL Energy sells at
wholesale. If transmission is disrupted, or transmission capacity
is inadequate or unavailable, FPL Energy's ability to sell and
deliver its wholesale power may be limited.
o Both Florida Power & Light Company and FPL Energy are subject to
extensive federal, state and local environmental statutes, rules
and regulations relating to air quality, water quality, waste
management, natural resources and health and safety. There are
significant costs associated with compliance with these
environmental statutes, rules and regulations; and future
statutes, rules and regulations could have an even greater
financial impact.
o While the demand for power is increasing throughout most of the
United States, the rate of construction and development of new,
more efficient electric generation facilities may exceed
increases in demand in some regional electric markets. The
start-up of new facilities in the regional markets in which FPL
Energy has facilities could increase competition in the wholesale
power market in those regions, which could harm the business,
results of operations and financial condition of FPL Group.
o In response to market conditions as well as recent energy
industry and other national events, the financial markets have
been disrupted, and the availability and cost of capital for
participants in the power industry has been at least temporarily
harmed. If FPL Group's access to capital becomes significantly
constrained, FPL Group's ability to grow its business would be
restricted, its interest costs would likely increase, and its
financial condition and results of operations could be harmed.
o The insurance industry has also been disrupted by recent national
events. As a result, the availability of insurance covering risks
FPL Group as well as its competitors typically insure against may
decrease. In addition, the available insurance may have higher
deductibles, higher premiums and more restrictive policy terms.
S-6
o While FPL Group believes that the domestic power industry is
undergoing consolidation and that significant acquisition
opportunities will be available, FPL Group is likely to confront
significant competition for acquisition opportunities. In
addition, FPL Group may be unable to identify attractive
acquisition opportunities at favorable prices or, to the extent
that any opportunities are identified, FPL Group may be unable to
complete the acquisitions, or, if completed, to successfully
integrate them.
o The development of power generation facilities is subject to
substantial risks, including various environmental, engineering,
procurement, permitting, fuel supply, construction and
transmission risks and, in the case of wind power projects that
would be developed after December 31, 2003, the risk that
Congress fails to extend the federal production tax credit for
wind energy beyond that date. The development of a power project
may require FPL Energy to expend significant sums for preliminary
engineering, permitting and legal, and other expenses before FPL
Energy can determine whether a project is economically feasible.
If FPL Energy were unable to complete the development of a
facility, FPL Energy might not be able to recover its investment
in the project and the investment would have to be written off.
No assurance can be given that the development of power
generation facilities in the future will be successful.
o FPL Group has agreed to purchase a number of gas turbines which
have not yet been placed in service or assigned to power plants
under construction. In the event that FPL Group is unable to
utilize the unassigned gas turbines, termination payments of up
to approximately $134 million as of April 30, 2002, could be
required and would be expensed. Progress payments made on these
unassigned turbines through April 30, 2002, totaling
approximately $128 million, would reduce any required cash
payment.
o The commencement of operation of a newly constructed power
generation facility include many start-up risks, and the
continued operation of power generation facilities involves many
risks, including the breakdown or failure of power generation
equipment, transmission lines, pipelines or other equipment or
processes as well as the risk of performance below expected
levels of output or efficiency. Insurance, warranties or
performance guarantees may not be adequate to cover lost revenues
or increased expenses, including the cost of replacement power
purchased on the spot market. Once a facility is in operation,
breakdown or failure may prevent the facility from performing
under applicable power sales agreements. In certain situations,
power sales agreements entered into with a utility may enable the
utility to terminate the agreement, or to retain security posted
as liquidated damages, if a project fails to achieve commercial
operation or certain operating levels by specified dates or
otherwise fails to deliver power in accordance with the terms of
the agreement.
The issues and associated risks and uncertainties described above are
not the only ones FPL Group may face. Additional issues may arise or become
material as the energy industry evolves. The risks and uncertainties associated
with these additional issues could impair FPL Group's businesses in the future.
S-7
SELECTED CONSOLIDATED INCOME STATEMENT DATA OF FPL GROUP AND SUBSIDIARIES
The following material, which is presented in this prospectus supplement solely
to furnish limited introductory information, is qualified in its entirety by,
and should be considered in conjunction with, the more detailed information
incorporated by reference or provided in this prospectus supplement or in the
accompanying prospectus. In the opinion of FPL Group, all adjustments
(constituting only normal recurring accruals) necessary for a fair statement of
the results of operations for the three months ended March 31, 2002 and 2001
have been made. The income statement data for the three months ended March 31,
2002 and March 31, 2001, respectively, is not necessarily indicative of the
results that may be expected for an entire year.
(IN MILLIONS, EXCEPT EARNINGS PER SHARE AND RATIOS)
---------------------------------------------------
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, DECEMBER 31,
------------------ --------------------------
2002 2001 2001 2000 1999
---- ---- ---- ---- ----
(UNAUDITED)
Operating revenues.................... $1,843 $1,941 $8,475 $7,082 $6,438
Net income (loss)..................... $ (56)(a) $ 110(b) $ 781(c) $ 704(d) $ 697(e)
Weighted-average shares
outstanding (assuming dilution)..... 169.3 168.7 168.9 170.2 171.5
Earnings (loss) per share of common
stock (assuming dilution)........... (0.33) $ 0.65 $ 4.62 $ 4.14 $ 4.07
Ratio of earnings to fixed charges.... 2.68 2.69 3.77 4.30 5.26
(a) Includes the cumulative effect of adopting Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets", which was an
impairment loss of $365 million ($222 million after-tax) and a reduction to
earnings per share of $1.31 and favorable settlement of litigation with the
Internal Revenue Service of $30 million, which was an increase to earnings per
share of $.18.
(b) Includes merger-related costs which reduced net income and earnings per
share by $19 million and $.11, respectively.
(c) Includes merger-related costs which reduced net income and earnings per
share by $19 million and $.11, respectively and the positive effect associated
with applying Statement of Financial Accounting Standards No. 133 which
increased net income and earnings per share by $8 million and $.04,
respectively.
(d) Includes merger-related costs which reduced net income and earnings per
share by $41 million and $.24, respectively.
(e) Includes effects of a gain on sale of Adelphia stock which increased net
income and earnings per share by $96 million and $.56, respectively, an
impairment loss on Maine assets which reduced net income and earnings per share
by $104 million and $.61, respectively, settlement of litigation between Florida
Power & Light Company and Florida Municipal Power Agency which reduced net
income and earnings per share by $42 million and $.25, respectively and a gain
on the redemption of a one-third ownership interest in a cable limited
partnership which increased net income and earnings per share by $66 million and
$.39, respectively.
S-8
CONSOLIDATED CAPITALIZATION OF FPL GROUP AND SUBSIDIARIES
(IN MILLIONS)
OUTSTANDING ADJUSTED(a)
AT --------------------
MARCH 31, 2002 AMOUNT PERCENT
-------------- ------ -------
(UNAUDITED)
Common Shareholders' Equity(b)......... $ 5,813 $ %
Long-term debt (excluding current
maturities).......................... $ 5,333 $ %
Preferred stock of Florida
Power & Light Company without
sinking fund requirements............ $ 226 $ %
------- ------- -------
Total Capitalization.............. $11,372 $ %
======= ======= =======
(a) To give effect to (i) the issuance of 5,000,000 shares of common stock and
(ii) the concurrent offering of 8,000,000 Corporate Units at an initial public
offering price of $______ (assuming in each case the underwriters do not
exercise their overallotment option). The underwriters have an option to
purchase up to an additional 750,000 shares of common stock within 30 days of
the date of this prospectus supplement in order to cover overallotments, if any.
The underwriters have an option to purchase up to an additional 1,200,000
Corporate Units within 13 days of the date of the prospectus supplement relating
to that offering in order to cover overallotments, if any, provided, however,
that FPL Group may in its discretion extend such period by an additional 17
days. Adjusted amounts do not reflect any possible future issuance and sale from
time to time by FPL Group or its subsidiaries of additional debt and equity
securities.
(b) Reflects an adjustment of $___ representing the present value of the
contract adjustment payments payable in connection with the Equity Units
(assuming the underwriters do not exercise their overallotment option).
S-9
COMMON STOCK DIVIDENDS AND PRICE RANGE
FPL Group and its predecessor, Florida Power & Light Company, have paid
dividends on the common stock each year since 1944. FPL Group's 225th
consecutive quarterly dividend on its common stock was paid on March 15, 2002 to
holders of record on February 20, 2002 in the amount of $0.58 per share and on
May 24, 2002 declared a quarterly dividend of $0.58 per share payable on June
17, 2002 to holders of record on June 7, 2002. Purchasers of the FPL Group
common stock offered hereby will not be entitled to receive any quarterly
dividend with a record date prior to the settlement date for the purchase of the
common stock. It is generally the practice of FPL Group to pay dividends
quarterly on the 15th day of March, June, September and December. The payment of
dividends is within the sole discretion of the Board of Directors. As a
practical matter, the ability of FPL Group to pay dividends on its common stock
is dependent upon dividends paid to it by its subsidiaries, primarily Florida
Power & Light Company. See "Description of Common Stock" in the accompanying
prospectus. The high and low prices of FPL Group common stock, as reported on
the NYSE consolidated tape (NYSE ticker symbol: "FPL"), and dividends paid per
share, for the periods indicated, are presented below:
Price Range
------------------------ Dividends
High Low Paid Per Share
------ ------ --------------
2000
First Quarter $48.25 $36.38 $0.54
Second Quarter 50.81 41.81 0.54
Third Quarter 67.13 47.13 0.54
Fourth Quarter 73.00 59.38 0.54
2001
First Quarter $71.63 $54.81 $0.56
Second Quarter 63.15 54.55 0.56
Third Quarter 60.50 51.21 0.56
Fourth Quarter 57.28 52.16 0.56
2002
First Quarter $60.10 $51.13 $0.58
Second Quarter (through
May 31, 2002) 65.31 58.81 --
FPL Group has a Dividend Reinvestment and Common Share Purchase Plan
("DRP") under which holders of its common stock and Florida Power & Light
Company's preferred stock may automatically reinvest cash dividends on all or
some of their shares and/or invest additional optional cash payments with a
minimum of $100 per quarter in additional shares of FPL Group's common stock
without payment of any brokerage commission or service charge by the
shareholder. FPL Group reserves the right to refuse cumulative optional cash
payments over $100,000 per participant for any calendar year, and in the event
it exercises this right, the amount of payment in excess of $100,000 will be
returned. Under the DRP, the price of shares of FPL Group's common stock
purchased is 100% of the average of the daily high and low sale prices of the
common stock as reported on the Consolidated Tape for the NYSE listed companies
for the period of the last three days on which the common stock was traded
immediately preceding the quarterly dividend payment date.
Shares of FPL Group's common stock are offered for sale under the DRP
only by means of a separate prospectus available upon request from FPL Group.
A number of provisions that are in FPL Group's articles of
incorporation and by-laws will make it difficult for another company to acquire
FPL Group and for a holder of FPL Group common stock to receive any related
takeover premium for its shares. See "Description of Common Stock--Voting Rights
and Non-Cumulative Voting" and "Description of Common Stock--Preferred Share
Purchase Rights" in the accompanying prospectus.
S-10
USE OF PROCEEDS
The information in this section adds to the information in the "Use of
Proceeds" section on page 4 of the accompanying prospectus. Please read these
two sections together.
FPL Group will add the net proceeds from the sale of the common stock
to its general funds. FPL Group expects to use its general funds to repay a
portion of commercial paper and short-term debt issued to fund investments by
FPL Group Capital in independent power projects. In addition, FPL Group expects
to use its general funds to support the Seabrook acquisition as well as
additions to its wind energy portfolio. As of May 31, 2002, FPL Group Capital
had an aggregate of $1.2 billion of commercial paper and short-term debt
outstanding, which had maturities of up to 187 days and which had annual
interest rates ranging from 1.90% to 2.35%. FPL Group will temporarily invest in
short-term instruments any proceeds that are not immediately required for these
purposes.
FPL Group Capital will add the net proceeds of $_______ from the
concurrent offering of the Equity Units to its general funds. FPL Group Capital
expects to use its general funds for the same purposes described above.
UNDERWRITING
The information in this section adds to the information in the "Plan of
Distribution" section on page 21 of the accompanying prospectus. Please read
these two sections together.
FPL Group is selling the common stock to the underwriters named in the
table below pursuant to an underwriting agreement dated the date of this
prospectus supplement. Subject to certain conditions, FPL Group has agreed to
sell to each of the underwriters, and each of the underwriters has severally
agreed to purchase, the number of shares of common stock set forth opposite that
underwriter's name in the table below:
NUMBER OF
UNDERWRITER SHARES
----------- ------
Goldman, Sachs & Co......................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................
Lehman Brothers Inc. ....................................
J.P. Morgan Securities Inc. .............................
Salomon Smith Barney Inc. ...............................
First Union Securities, Inc..............................
Scotia Capital (USA) Inc. ...............................
Robertson Stephens, Inc. ................................
The Williams Capital Group, L.P. ........................
Credit Lyonnais Securities (USA) Inc. ...................
BNY Capital Markets, Inc.................................
Mellon Financial Markets, LLC............................
SunTrust Capital Markets, Inc. ..........................
---------
Total................................................ 5,000,000
=========
Under the terms and conditions of the underwriting agreement, the
underwriters must buy all of the shares of common stock if they buy any of them.
The underwriting agreement provides that the obligations of the underwriters
pursuant thereto are subject to certain conditions. In the event of a default by
an underwriter, the underwriting agreement provides that, in certain
circumstances, the purchase commitments of the non-defaulting underwriters may
be increased or the underwriting agreement may be terminated. The underwriters
will sell the shares of common stock to the public when and if the underwriters
buy the shares from FPL Group.
S-11
The expenses in connection with the offer and sale of the shares, other
than underwriting discounts, are estimated at $_____. This estimate includes
expenses relating to printing, transfer agent fees and legal fees, among other
expenses. The underwriters have agreed to make a payment to FPL Group in lieu of
reimbursement of expenses in connection with the offering.
FPL Group has agreed to indemnify the underwriters against, or
contribute to payments the underwriters may be required to make in respect of,
certain liabilities, including liabilities under the Securities Act of 1933.
COMMISSIONS AND DISCOUNTS
The shares sold by the underwriters to the public will initially be
offered at the public offering price set forth on the cover of this prospectus
supplement. Any shares sold by the underwriters to securities dealers may be
sold at a discount from the public offering price of up to $____ per share. Any
such securities dealer may resell any shares of common stock purchased from the
underwriters to certain other brokers or dealers at a discount from the public
offering price of up to $_____ per share. If all of the shares are not sold at
the initial public offering price, the underwriters may change the offering
price and other selling terms.
The following table shows the per share and total public offering
price, underwriting discount to be paid to the underwriters and proceeds before
expenses to FPL Group. The information is presented assuming either no exercise
or full exercise by the underwriters of the overallotment option to purchase up
to 750,000 additional shares.
Per Without Exercise With Exercise
Share of Option of Option
--------- ---------------- -------------
Public offering price..................... $ $ $
Underwriting discount..................... $ $ $
Proceeds, before expenses, to FPL Group... $ $ $
OVERALLOTMENT OPTION
FPL Group has granted an option to the underwriters to purchase up to
an additional 750,000 shares of common stock at the public offering price less
the underwriting discount. The underwriters may exercise this option from time
to time for 30 days from the date of this prospectus supplement solely to cover
any overallotments. If the underwriters exercise this option, each will be
obligated, subject to conditions contained in the underwriting agreement, to
purchase approximately the same percentage of additional shares as the number
set forth next to the underwriter's name in the preceding table bears to the
total number of shares set forth next to the names of all underwriters in the
preceding table.
NO SALE OF SIMILAR SECURITIES
FPL Group has agreed, for a period of 90 days after the date of this
prospectus supplement, to not, without the prior written consent of Goldman,
Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, the
representatives of the underwriters, directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of, or enter into
any agreement to sell, any Corporate Units, purchase contracts or FPL Group
common stock, or any securities of FPL Group similar to the Corporate Units,
purchase contracts or FPL Group common stock or any security convertible into or
exchangeable or exercisable for Corporate Units, purchase contracts or its
common stock, with certain exceptions, including shares of its common stock and
Equity Units issued pursuant to this offering of its common stock and the
concurrent offering of Equity Units, shares of its common stock or options for
shares of its common stock issued pursuant to or sold in connection with any
employee or director benefit or compensation, dividend reinvestment, stock
option or other incentive and stock purchase plans or shareholder rights plan of
FPL Group and its subsidiaries, shares issuable in connection with Treasury
Units or Corporate Units to be created or recreated upon substitution of pledged
securities, or shares of its common stock issuable upon settlement of the
Corporate Units or Treasury Units or other similar securities issued by FPL
Group and Equity Units issued pursuant to the concurrent offering by FPL Group.
S-12
NEW YORK STOCK EXCHANGE LISTING
FPL Group's common stock is listed on the NYSE under the symbol "FPL."
PRICE STABILIZATION AND SHORT POSITIONS
Until the distribution of the shares of common stock offered hereby is
completed, SEC rules may limit the underwriters and selling group members from
bidding for or purchasing the shares of FPL Group common stock. However, the
underwriters may engage in transactions that stabilize the price of FPL Group
common stock, such as bids or purchases that peg, fix or maintain that price.
In connection with the offering, the underwriters may make short sales
of the common stock. Short sales involve the sale by the underwriters, at the
time of the offering, of a greater number of shares of common stock than they
are required to purchase in the offering. Covered short sales are sales made in
an amount not greater than the overallotment option. The underwriters may close
out any covered short position by either exercising the overallotment option or
purchasing common stock in the open market. In determining the source of common
stock to close out the covered short position, the representatives of the
underwriters will consider, among other things, the price of common stock
available for purchase in the open market as compared to the price at which they
may purchase the common stock through the overallotment option. Naked short
sales are sales in excess of the overallotment option. The representatives must
close out any naked short position by purchasing common stock in the open
market. A naked short position is more likely to be created if the
representatives are concerned that there may be downward pressure on the price
of the common stock in the open market after pricing that could adversely affect
investors who purchase in the offering. Similar to other purchase transactions,
purchases by the underwriters to cover syndicate short positions may have the
effect of raising or maintaining the market price of the common stock or
preventing or retarding a decline in the market price of the common stock. As a
result, the price of the common stock may be higher than it would otherwise be
in the absence of these transactions.
The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased FPL Group
common stock sold by or for the account of such underwriter in stabilizing or
short covering transactions.
Neither FPL Group nor any of the underwriters make any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the common stock. In
addition, neither FPL Group nor any of the underwriters make any representation
that the representatives will engage in these transactions or that these
transactions, once commenced, will not be discontinued without notice. The
underwriters may also engage in such transactions in connection with the
concurrent offering of FPL Group's Equity Units.
ELECTRONIC PROSPECTUS
A prospectus in electronic format may be made available on the websites
maintained by one or more of the underwriters participating in this offering.
The representatives may agree to allocate a number of shares of common stock to
underwriters for sale to their online brokerage account holders. Internet
distributions will be allocated by the underwriters that will make internet
distributions on the same basis as other allocations. Merrill Lynch will be
facilitating distribution for this offering to certain of its internet
subscription customers. Merrill Lynch intends to allocate a limited number of
shares of common stock for sale to its online brokerage customers. An electronic
preliminary prospectus supplement is available on the internet website
maintained by Merrill Lynch. Other than the preliminary prospectus supplement in
electronic format, the information on the Merrill Lynch website is not intended
to be part of this prospectus supplement.
SELLING RESTRICTIONS
Each underwriter has represented, warranted and agreed that:
S-13
o it has not offered or sold and, prior to the expiry of a period
of six months from the closing date, will not offer or sell any
shares of FPL Group common stock to persons in the United Kingdom
except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the
meaning of the Public Offers at Securities Regulations 1995;
o it has only communicated or caused to be communicated and will
only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning
of section 21 of the Financial Services and Markets Act 2000 (the
"FSMA")) received by it in connection with the issue or sale of
any shares of FPL Group common stock in circumstances in which
section 21(1) of the FSMA does not apply to FPL Group; and
o it has complied and will comply with all applicable provisions of
the FSMA with respect to anything done by it in relation to
shares of FPL Group in, from or otherwise involving the United
Kingdom.
The securities may not be offered, sold, transferred or delivered in or
from The Netherlands, as part of their initial distribution or as part of any
re-offering, and neither this prospectus supplement, the accompanying prospectus
nor any other document in respect of the offering may be distributed or
circulated in The Netherlands, other than to individuals or legal entities which
include, but are not limited to, banks, brokers, dealers, institutional
investors and undertakings with a treasury department, who or which trade or
invest in securities in the conduct of a business or profession.
OTHER RELATIONSHIPS
The underwriters are also underwriting the concurrent offering of FPL
Group's Equity Units. In addition, certain of the underwriters and their
affiliates engage in transactions with, and perform services for, FPL Group, its
subsidiaries and its affiliates in the ordinary course of business and have
engaged, and may in the future engage, in commercial banking and investment
banking transactions with FPL Group, its subsidiaries and its affiliates.
MISCELLANEOUS
First Union Securities, Inc. is an indirect, wholly-owned subsidiary of
Wachovia Corporation. Wachovia Corporation conducts its investment banking,
institutional, and capital markets businesses through its various bank,
broker-dealer and non-bank subsidiaries (including First Union Securities, Inc.)
under the trade name of Wachovia Securities. Any references to Wachovia
Securities in this prospectus supplement, however, do not include Wachovia
Securities, Inc., member NASD/SIPC, a separate broker-dealer subsidiary of
Wachovia Corporation and an affiliate of First Union Securities, Inc., which may
or may not be participating as a selling group member in the distribution of
these securities.
S-14
PROSPECTUS
$2,000,000,000
AGGREGATE AMOUNT
----------------
FPL GROUP CAPITAL INC
DEBT SECURITIES
THE DEBT SECURITIES WILL BE ABSOLUTELY, IRREVOCABLY AND
UNCONDITIONALLY GUARANTEED BY
FPL GROUP, INC.
---------------
FPL GROUP, INC.
COMMON STOCK WITH ATTACHED PREFERRED SHARE PURCHASE RIGHTS
STOCK PURCHASE CONTRACTS
AND
STOCK PURCHASE UNITS
--------------------------------------------
FPL Group, Inc. and FPL Group Capital Inc may offer from time to time
up to an aggregate of $2,000,000,000 of their securities. FPL Group and FPL
Group Capital will provide specific terms of the securities, including the
offering prices, in supplements to this prospectus. The supplements may also
add, update or change information contained in this prospectus. You should read
this prospectus and any supplements carefully before you invest.
FPL Group's common stock is listed on the New York Stock Exchange and
trades under the symbol "FPL."
FPL Group and FPL Group Capital may offer these securities directly or
through underwriters, agents or dealers. The supplements to this prospectus will
describe the terms of any particular plan of distribution, including any
underwriting arrangements. The "Plan of Distribution" section on page 21 of this
prospectus also provides more information on this topic.
Both FPL Group's and FPL Group Capital's principal executive offices
are located at 700 Universe Boulevard, Juno Beach, Florida 33408, telephone
number (561) 694-4000, and their mailing address is P.O. Box 14000, Juno Beach,
Florida 33408-0420.
--------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
April 24, 2002
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that FPL Group and
FPL Group Capital have filed with the Securities and Exchange Commission ("SEC")
using a "shelf" registration process. Under this shelf registration process, FPL
Group and FPL Group Capital may sell the securities or combinations of the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $2,000,000,000. This prospectus provides you with a general
description of the securities that FPL Group and/or FPL Group Capital may offer.
Each time FPL Group and/or FPL Group Capital sells securities, FPL Group and/or
FPL Group Capital will provide a prospectus supplement that will contain
specific information about the terms of that offering. The prospectus supplement
may also add, update or change information contained in this prospectus. You
should read both this prospectus and any prospectus supplement together with
additional information described under the heading "Where You Can Find More
Information."
For more detailed information about the securities, you can read the
exhibits to the registration statement. Those exhibits have been either filed
with the registration statement or incorporated by reference to earlier SEC
filings listed in the registration statement.
WHERE YOU CAN FIND MORE INFORMATION
FPL Group files annual, quarterly and other reports and other
information with the SEC. You can read and copy any information filed by FPL
Group with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can obtain additional information about the Public
Reference Room by calling the SEC at 1-800-SEC-0330.
In addition, the SEC maintains an Internet site (http://www.sec.gov)
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC, including FPL Group.
FPL Group also maintains an Internet site (http://www.fplgroup.com).
FPL Group Capital does not file reports or other information with the
SEC. FPL Group includes summarized financial information relating to FPL Group
Capital in some of its reports filed with the SEC. FPL Group does not intend to
include any separate financial information with respect to FPL Group Capital in
its consolidated financial statements because FPL Group and FPL Group Capital
have determined that this information is not material to the holders of FPL
Group Capital's debt securities.
INCORPORATION BY REFERENCE
The SEC allows FPL Group Capital and FPL Group to "incorporate by
reference" the information that FPL Group files with the SEC, which means that
FPL Group Capital and FPL Group may, in this prospectus, disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus. Information
that FPL Group files in the future with the SEC will automatically update and
supersede this information. FPL Group Capital and FPL Group are incorporating by
reference the document listed below and any future filings FPL Group makes with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, until FPL Group and/or FPL Group Capital sell all of these securities:
(1) FPL Group's Annual Report on Form 10-K for the year ended
December 31, 2001.
(2) FPL Group's Current Report on Form 8-K filed with the SEC on
April 5, 2002 (excluding that portion furnished under Item 9).
You may request a copy of these documents, at no cost to you, by
writing or calling Robert J. Reger, Jr., Esq., Thelen Reid & Priest LLP, 40 West
57th Street, New York, New York, 10019, (212) 603-2000.
2
SAFE HARBOR STATEMENT UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, FPL Group and FPL Group Capital are hereby filing
cautionary statements identifying important factors that could cause FPL Group's
and FPL Group Capital's actual results to differ materially from those projected
in forward-looking statements (as that term is defined in the Private Securities
Litigation Reform Act of 1995) made by or on behalf of FPL Group or FPL Group
Capital that are made in this prospectus or any supplement to this prospectus,
in presentations, 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", "estimated", "projection" or "outlook") are not
statements of historical facts and may be forward-looking. Forward-looking
statements involve estimates, assumptions and uncertainties. Accordingly, any of
those statements are qualified in their entirety by reference to, and are
accompanied by, the following important factors that could cause FPL Group's or
FPL Group Capital's actual results to differ materially from those contained in
forward-looking statements made by or on behalf of FPL Group or FPL Group
Capital.
Any forward-looking statement speaks only as of the date on which that
statement is made, and neither FPL Group nor FPL Group Capital undertakes any
obligation to update any forward-looking statement to reflect events or
circumstances after the date on which that statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time, and it
is not possible for management to predict all of those factors, nor can it
assess the impact of each of those factors 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.
Some important factors that could cause actual results or outcomes to
differ materially from those discussed in the forward-looking statements include
changes in laws or regulations, including the Public Utility Regulatory Policies
Act of 1978 and the Public Utility Holding Company Act of 1935, and changing
governmental policies and regulatory actions, including those of the Federal
Energy Regulatory Commission, the Florida Public Service Commission and the U.S.
Nuclear Regulatory Commission, with respect to:
(1) allowed rates of return, including but not limited to, return
on common equity and equity ratio limits,
(2) industry and rate structure,
(3) operation of nuclear power facilities,
(4) acquisition, disposal, depreciation and amortization of assets
and facilities,
(5) operation and construction of plant facilities,
(6) recovery of fuel and purchased power costs,
(7) decommissioning costs, and
(8) present or prospective wholesale and retail competition,
including, but not limited to, retail wheeling and
transmission costs.
The business and profitability of FPL Group and FPL Group Capital are
also influenced by economic and geographic factors including:
(1) political and economic risks,
(2) changes in and compliance with environmental and safety laws
and policies,
(3) weather conditions, including natural disasters such as
hurricanes,
3
(4) population growth rates and demographic patterns,
(5) competition for retail and wholesale customers,
(6) availability, pricing and transportation of fuel and other
energy commodities,
(7) market demand for energy,
(8) changes in tax rates or policies or in rates of inflation or
in accounting standards,
(9) unanticipated delays or changes in costs for capital projects,
(10) unanticipated changes in operating expenses and capital
expenditures,
(11) capital market conditions,
(12) competition for new energy development opportunities, and
(13) legal and administrative proceedings, whether civil, such as
environmental, or criminal, and settlements.
All of these factors are difficult to predict, contain uncertainties
that may materially affect actual results, and are beyond the control of FPL
Group and FPL Group Capital.
FPL GROUP CAPITAL
FPL Group Capital was incorporated in 1985 as a Florida corporation and
is a wholly-owned subsidiary of FPL Group. FPL Group Capital holds the capital
stock of, and provides funding for, FPL Group's operating subsidiaries other
than Florida Power & Light Company. These operating subsidiaries' business
activities primarily consist of independent power projects.
FPL GROUP
FPL Group is a holding company incorporated in 1984 as a Florida
corporation. FPL Group's principal subsidiary, Florida Power & Light Company, is
engaged in the generation, transmission, distribution and sale of electric
energy. Other operations are conducted through FPL Group Capital.
USE OF PROCEEDS
Unless otherwise stated in a prospectus supplement, FPL Group Capital
and FPL Group will each add the net proceeds from the sale of these securities
to its respective general funds. FPL Group uses its general funds for corporate
purposes, including to provide funds for its subsidiaries. FPL Group Capital
uses its general funds for corporate purposes, including to repay short-term
borrowings and to redeem or repurchase outstanding long-term debt obligations.
FPL Group Capital and FPL Group will each temporarily invest any proceeds that
it does not need to use immediately in short-term instruments.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table shows FPL Group's consolidated ratio of earnings to
fixed charges for each of its last five fiscal years:
Years Ended December 31,
----------------------------------------------------
2001 2000 1999 1998 1997
---- ---- ---- ---- ----
3.77 4.30 5.26 3.88 4.09
4
DESCRIPTION OF OFFERED DEBT SECURITIES
GENERAL. FPL Group Capital will issue its debt securities, in one or
more series, under an Indenture, dated as of June 1, 1999, between FPL Group
Capital and The Bank of New York, as Trustee. This Indenture, as it may be
amended and supplemented from time to time, is referred to in this prospectus as
the "Indenture." The Bank of New York, as Trustee under the Indenture, is
referred to in this prospectus as the "Indenture Trustee." These debt securities
are referred to in this prospectus as the "Offered Debt Securities."
The Indenture provides for the issuance of debentures, notes or other
debt by FPL Group Capital in an unlimited amount from time to time. The Offered
Debt Securities and all other debentures, notes or other debt of FPL Group
Capital issued under the Indenture are collectively referred to in this
prospectus as the "Debt Securities."
This section briefly summarizes some of the terms of the Offered Debt
Securities and some of the provisions of the Indenture. This summary does not
contain a complete description of the Offered Debt Securities. You should read
this summary together with the Indenture and the officer's certificates or other
documents establishing the Offered Debt Securities for a complete understanding
of the provisions that may be important to you and for the definitions of some
terms used in this summary. The Indenture, the form of officer's certificate
that may be used to establish a series of Offered Debt Securities and a form of
Offered Debt Securities are on file with the SEC and are incorporated by
reference in this prospectus. In addition, the Indenture is subject to the
provisions of the Trust Indenture Act of 1939. You should read the Trust
Indenture Act of 1939 for a complete understanding of provisions that may be
important to you.
Each series of Offered Debt Securities will have different terms. FPL
Group Capital will include some or all of the following information about a
specific series of Offered Debt Securities in the prospectus supplement(s)
relating to those Offered Debt Securities:
(1) the title of those Offered Debt Securities,
(2) any limit upon the aggregate principal amount of those Offered
Debt Securities,
(3) the date(s) on which FPL Group Capital will pay the principal
of those Offered Debt Securities,
(4) the rate(s) of interest on those Offered Debt Securities, or
how the rate(s) of interest will be determined, the date(s)
from which interest will accrue, the dates on which FPL Group
Capital will pay interest and the record date for any interest
payable on any interest payment date,
(5) the person to whom FPL Group Capital will pay interest on
those Offered Debt Securities on any interest payment date, if
other than the person in whose name those Offered Debt
Securities are registered at the close of business on the
record date for that interest payment,
(6) the place(s) at which or methods by which FPL Group Capital
will make payments on those Offered Debt Securities and the
place(s) at which or methods by which the registered owners of
those Offered Debt Securities may transfer or exchange those
Offered Debt Securities and serve notices and demands to or
upon FPL Group Capital,
(7) the security registrar and any paying agent or agents for
those Offered Debt Securities,
(8) any date(s) on which, the price(s) at which and the terms and
conditions upon which FPL Group Capital may, at its option,
redeem those Offered Debt Securities, in whole or in part, and
any restrictions on those redemptions,
(9) any sinking fund or other provisions or options held by the
registered owners of those Offered Debt Securities that would
obligate FPL Group Capital to repurchase or redeem those
Offered Debt Securities,
5
(10) the denominations in which FPL Group Capital may issue those
Offered Debt Securities, if other than denominations of $1,000
and any integral multiple of $1,000,
(11) the currency or currencies in which FPL Group Capital may pay
the principal of or premium, if any, or interest on those
Offered Debt Securities (if other than in U.S. dollars),
(12) if FPL Group Capital or a registered owner may elect to pay,
or receive, principal of or premium, if any, or interest on
those Offered Debt Securities in a currency other than that in
which those Offered Debt Securities are stated to be payable,
the terms and conditions upon which that election may be made,
(13) if FPL Group Capital will, or may, pay the principal of or
premium, if any, or interest on those Offered Debt Securities
in securities or other property, the type and amount of those
securities or other property and the terms and conditions upon
which FPL Group Capital or a registered owner may elect to pay
or receive those payments,
(14) if the amount payable in respect of principal of or premium,
if any, or interest on those Offered Debt Securities may be
determined by reference to an index or other fact or event
ascertainable outside of the Indenture, the manner in which
those amounts will be determined,
(15) the portion of the principal amount of those Offered Debt
Securities that FPL Group Capital will pay upon declaration of
acceleration of the maturity of those Offered Debt Securities,
if other than the entire principal amount of those Offered
Debt Securities,
(16) any events of default with respect to those Offered Debt
Securities and any covenants of FPL Group Capital for the
benefit of the registered owners of those Offered Debt
Securities, other than those specified in the Indenture,
(17) the terms, if any, pursuant to which those Offered Debt
Securities may be converted into or exchanged for shares of
capital stock or other securities of FPL Group Capital or any
other entity,
(18) a definition of "Eligible Obligations" under the Indenture
with respect to those Offered Debt Securities denominated in a
currency other than U.S. dollars, and any other provisions for
the reinstatement of FPL Group Capital's indebtedness in
respect of those Offered Debt Securities after their
satisfaction and discharge,
(19) if FPL Group Capital will issue those Offered Debt Securities
in global form, necessary information relating to the issuance
of those Offered Debt Securities in global form,
(20) if FPL Group Capital will issue those Offered Debt Securities
as bearer securities, necessary information relating to the
issuance of those Offered Debt Securities as bearer
securities,
(21) any limits on the rights of the registered owners of those
Offered Debt Securities to transfer or exchange those Offered
Debt Securities or to register their transfer, and any related
service charges,
(22) any exceptions to the provisions governing payments due on
legal holidays or any variations in the definition of business
day with respect to those Offered Debt Securities,
(23) other than the Guarantee described under "Description of the
Guarantee" below, any collateral security, assurance, or
guarantee for those Offered Debt Securities, and
(24) any other terms of those Offered Debt Securities that are not
inconsistent with the provisions of the Indenture (Indenture,
Section 301).
6
FPL Group Capital may sell Offered Debt Securities at a discount below
their principal amount. Some of the important United States Federal income tax
considerations applicable to Offered Debt Securities sold at a discount below
their principal amount may be discussed in the related prospectus supplement. In
addition, some of the important United States Federal income tax or other
considerations applicable to any Offered Debt Securities that are denominated in
a currency other than U.S. dollars may be discussed in the related prospectus
supplement.
Except as otherwise stated in the related prospectus supplement, the
covenants in the Indenture would not give registered owners of Offered Debt
Securities protection in the event of a highly-leveraged transaction involving
FPL Group Capital.
SECURITY AND RANKING. The Offered Debt Securities will be unsecured
obligations of FPL Group Capital. The Indenture does not limit FPL Group
Capital's ability to provide security with respect to other Debt Securities. All
Debt Securities issued under the Indenture will rank equally and ratably with
all other Debt Securities issued under the Indenture, except to the extent that
FPL Group Capital elects to provide security with respect to any Debt Security
without providing that security to all outstanding Debt Securities as allowed
under the Indenture. The Indenture does not limit FPL Group Capital's ability to
issue other unsecured debt.
FPL Group Capital is a holding company that derives substantially all
of its income from its operating subsidiaries. The Debt Securities therefore
will be effectively subordinated to debt and preferred stock issued by those
subsidiaries. The Indenture does not limit the amount of debt which may be
incurred and preferred stock issuable by FPL Group Capital's subsidiaries.
PAYMENT AND PAYING AGENTS. Except as stated in the related prospectus
supplement, on each interest payment date FPL Group Capital will pay interest on
each Offered Debt Security to the person in whose name that Offered Debt
Security is registered as of the close of business on the record date relating
to that interest payment date. However, on the date that the Offered Debt
Securities mature, FPL Group Capital will pay the interest to the person to whom
it pays the principal. Also, if FPL Group Capital has defaulted in the payment
of interest on any Offered Debt Security, it may pay that defaulted interest to
the registered owner of that Offered Debt Security:
(1) as of the close of business on a date that the Indenture
Trustee selects, which may not be more than 15 days or less
than 10 days before the date that FPL Group Capital proposes
to pay the defaulted interest, or
(2) in any other lawful manner that does not violate the
requirements of any securities exchange on which that Offered
Debt Security is listed and that the Indenture Trustee
believes is acceptable (Indenture, Section 307).
Unless otherwise stated in the related prospectus supplement, the
principal, premium, if any, and interest on the Offered Debt Securities at
maturity will be payable when such Offered Debt Securities are presented at the
main corporate trust office of The Bank of New York, as paying agent, in The
City of New York. FPL Group Capital may change the place of payment on the
Offered Debt Securities, appoint one or more additional paying agents, including
itself, and remove any paying agent (Indenture, Section 602).
TRANSFER AND EXCHANGE. Unless otherwise stated in the related
prospectus supplement, Offered Debt Securities may be transferred or exchanged
at the main corporate trust office of The Bank of New York, as security
registrar, in The City of New York. FPL Group Capital may change the place for
transfer and exchange of the Offered Debt Securities and may designate one or
more additional places for that transfer and exchange.
Except as otherwise stated in the related prospectus supplement, there
will be no service charge for any transfer or exchange of the Offered Debt
Securities. However, FPL Group Capital may require payment of any tax or other
governmental charge in connection with any transfer or exchange of the Offered
Debt Securities.
FPL Group Capital will not be required to transfer or exchange any
Offered Debt Security selected for redemption. Also, FPL Group Capital will not
be required to transfer or exchange any Offered Debt Security during a period of
15 days before selection of Offered Debt Securities to be redeemed (Indenture,
Section 305).
7
DEFEASANCE. FPL Group Capital may, at any time, elect to have all of
its obligations discharged with respect to all or a portion of any Debt
Securities. To do so, FPL Group Capital must irrevocably deposit with the
Indenture Trustee or any paying agent, in trust:
(1) money in an amount that will be sufficient to pay all or that
portion of the principal, premium, if any, and interest due
and to become due on those Debt Securities, on or prior to
their maturity, or
(2) in the case of a deposit made prior to the maturity of that
series of Debt Securities,
(a) direct obligations of, or obligations unconditionally
guaranteed by, the United States and entitled to the
benefit of its full faith and credit that do not
contain provisions permitting their redemption or
other prepayment at the option of their issuer, and
(b) certificates, depositary receipts or other
instruments that evidence a direct ownership interest
in those obligations or in any specific interest or
principal payments due in respect of those
obligations that do not contain provisions permitting
their redemption or other prepayment at the option of
their issuer, the principal of and the interest on
which, when due, without any regard to reinvestment
of that principal or interest, will provide money
that, together with any money deposited with or held
by the Indenture Trustee, will be sufficient to pay
all or that portion of the principal, premium, if
any, and interest due and to become due on those Debt
Securities, on or prior to their maturity, or
(3) a combination of (1) and (2) that will be sufficient to pay
all or that portion of the principal, premium, if any, and
interest due and to become due on those Debt Securities, on or
prior to their maturity (Indenture, Section 701).
LIMITATION ON LIENS. So long as any Debt Securities remain outstanding,
FPL Group Capital will not secure any indebtedness with a lien on any shares of
the capital stock of any of its majority-owned subsidiaries, which shares of
capital stock FPL Group Capital now or hereafter directly owns, unless FPL Group
Capital equally secures all Debt Securities. However, this restriction does not
apply to or prevent:
(1) any lien on capital stock created at the time FPL Group
Capital acquires that capital stock, or within 270 days after
that time, to secure all or a portion of the purchase price
for that capital stock,
(2) any lien on capital stock existing at the time FPL Group
Capital acquires that capital stock (whether or not FPL Group
Capital assumes the obligations secured by the lien and
whether or not the lien was created in contemplation of the
acquisition),
(3) any extensions, renewals or replacements of the liens
described in (1) and (2) above, or of any indebtedness secured
by those liens; provided, that,
(a) the principal amount of indebtedness secured by those
liens immediately after the extension, renewal or
replacement may not exceed the principal amount of
indebtedness secured by those liens immediately
before the extension, renewal or replacement, and
(b) the extension, renewal or replacement lien is limited
to no more than the same proportion of all shares of
capital stock as were covered by the lien that was
extended, renewed or replaced, or
(4) any lien arising in connection with court proceedings;
provided, that, either
(a) the execution or enforcement of that lien is
effectively stayed within 30 days after entry of the
corresponding judgment (or the corresponding judgment
has been discharged within that 30 day period) and
the claims secured by that lien are being contested
in good faith by appropriate proceedings,
8
(b) the payment of that lien is covered in full by
insurance and the insurance company has not denied or
contested coverage, or
(c) so long as that lien is adequately bonded, any
appropriate legal proceedings that have been duly
initiated for the review of the corresponding
judgement, decree or order have not been fully
terminated or the periods within which those
proceedings may be initiated have not expired.
Liens on any shares of the capital stock of any of FPL Group Capital's
majority-owned subsidiaries, which shares of capital stock FPL Group Capital now
or hereafter directly owns, other than liens described in (1) through (4) above,
are referred to in this prospectus as "Restricted Liens." The foregoing
limitation does not apply to the extent that FPL Group Capital creates any
Restricted Liens to secure indebtedness that, together with all other
indebtedness of FPL Group Capital secured by Restricted Liens, does not at the
time exceed 5% of FPL Group Capital's Consolidated Capitalization (Indenture,
Section 608).
For this purpose, "Consolidated Capitalization" means the sum of:
(1) Consolidated Shareholders' Equity;
(2) Consolidated Indebtedness for borrowed money (exclusive of any
amounts which are due and payable within one year); and,
without duplication
(3) any preference or preferred stock of FPL Group Capital or any
Consolidated Subsidiary which is subject to mandatory
redemption or sinking fund provisions.
The term "Consolidated Shareholders' Equity" as used above means the
total assets of FPL Group Capital and its Consolidated Subsidiaries less all
liabilities of FPL Group Capital and its Consolidated Subsidiaries. As used in
this definition, the term "liabilities" means all obligations which would, in
accordance with generally accepted accounting principles, be classified on a
balance sheet as liabilities, including without limitation:
(1) indebtedness secured by property of FPL Group Capital or any
of its Consolidated Subsidiaries whether or not FPL Group
Capital or such Consolidated Subsidiary is liable for the
payment thereof unless, in the case that FPL Group Capital or
such Consolidated Subsidiary is not so liable, such property
has not been included among the assets of FPL Group Capital or
such Consolidated Subsidiary on such balance sheet,
(2) deferred liabilities, and
(3) indebtedness of FPL Group Capital or any of its Consolidated
Subsidiaries that is expressly subordinated in right and
priority of payment to other liabilities of FPL Group Capital
or such Consolidated Subsidiary.
As used in this definition, "liabilities" includes preference or preferred stock
of FPL Group Capital or any Consolidated Subsidiary only to the extent of any
such preference or preferred stock that is subject to mandatory redemption or
sinking fund provisions.
The term "Consolidated Indebtedness" means total indebtedness as shown
on the consolidated balance sheet of FPL Group Capital and its Consolidated
Subsidiaries.
The term "Consolidated Subsidiary," means at any date any direct or
indirect majority-owned subsidiary whose financial statements would be
consolidated with those of FPL Group Capital in FPL Group Capital's consolidated
financial statements as of such date in accordance with generally accepted
accounting principles (Indenture, Section 608).
The foregoing limitation does not limit in any manner the ability of:
9
(1) FPL Group Capital to place liens on any of its assets other
than the capital stock of directly held, majority-owned
subsidiaries,
(2) FPL Group Capital or FPL Group to cause the transfer of its
assets or those of its subsidiaries, including the capital
stock covered by the foregoing restrictions,
(3) FPL Group to place liens on any of its assets, or
(4) any of the direct or indirect subsidiaries of FPL Group
Capital or FPL Group (other than FPL Group Capital) to place
liens on any of their assets.
CONSOLIDATION, MERGER, AND SALE OF ASSETS. Under the Indenture, FPL
Group Capital may not consolidate with or merge into any other entity or convey,
transfer or lease its properties and assets substantially as an entirety to any
entity, unless:
(1) the entity formed by that consolidation, or the entity into
which FPL Group Capital is merged, or the entity that acquires
or leases FPL Group Capital's property and assets, is an
entity organized and existing under the laws of the United
States, any State or the District of Columbia and that entity
expressly assumes FPL Group Capital's obligations on all Debt
Securities and under the Indenture,
(2) immediately after giving effect to the transaction, no event
of default under the Indenture and no event that, after notice
or lapse of time or both, would become an event of default
under the Indenture exists, and
(3) FPL Group Capital delivers an officer's certificate and an
opinion of counsel to the Indenture Trustee, as provided in
the Indenture (Indenture, Section 1101).
The Indenture does not restrict FPL Group Capital in a merger in which
FPL Group Capital is the surviving entity.
EVENTS OF DEFAULT. Each of the following is an event of default under
the Indenture with respect to the Debt Securities of any series:
(1) failure to pay interest on the Debt Securities of that series
within 30 days after it is due,
(2) failure to pay principal or premium, if any, on the Debt
Securities of that series when it is due,
(3) failure to comply with any other covenant in the Indenture,
other than a covenant that does not relate to that series of
Debt Securities, that continues for 90 days after FPL Group
Capital receives written notice from the Indenture Trustee or
FPL Group Capital and the Indenture Trustee receive written
notice from the registered owners of at least 33% in principal
amount of the Debt Securities of that series,
(4) certain events of bankruptcy, insolvency or reorganization of
FPL Group Capital, and
(5) any other event of default specified with respect to the Debt
Securities of that series (Indenture, Section 801).
An event of default with respect to the Debt Securities of a particular
series will not necessarily constitute an event of default with respect to Debt
Securities of any other series issued under the Indenture.
REMEDIES. If an event of default applicable to the Debt Securities of
one or more series, but not applicable to all outstanding Debt Securities,
exists, then either the Indenture Trustee or the registered owners of at least
33% in aggregate principal amount of the Debt Securities of each of those series
may declare the principal of and interest on all the Debt Securities of that
series to be due and payable immediately. However, under the Indenture, some
Debt Securities may provide for a specified amount less than their entire
10
principal amount to be due and payable upon that declaration. These Debt
Securities are defined as "Discount Securities" in the Indenture.
If the event of default is applicable to all outstanding Debt
Securities, then only the Indenture Trustee or the registered owners of at least
33% in aggregate principal amount of all outstanding Debt Securities of all
series, voting as one class, and not the registered owners of any one series,
may make a declaration of acceleration. However, the event of default giving
rise to the declaration relating to any series of Debt Securities will be
automatically waived, and that declaration and its consequences will be
automatically rescinded and annulled, if, at any time after that declaration and
before a judgment or decree for payment of the money due has been obtained:
(1) FPL Group Capital deposits with the Indenture Trustee a sum
sufficient to pay:
(a) all overdue interest on all Debt Securities of that
series,
(b) the principal of and any premium on any Debt
Securities of that series that have become due for
reasons other than that declaration, and interest
that is then due,
(c) interest on overdue interest for that series, and
(d) all amounts due to the Indenture Trustee under the
Indenture, and
(2) any other event of default with respect to the Debt Securities
of that series has been cured or waived as provided in the
Indenture (Indenture, Section 802).
Other than its obligations and duties in case of an event of default
under the Indenture, the Indenture Trustee is not obligated to exercise any of
its rights or powers under the Indenture at the request or direction of any of
the registered owners, unless those registered owners offer reasonable indemnity
to the Indenture Trustee (Indenture, Section 903). If they provide this
reasonable indemnity, the registered owners of a majority in principal amount of
any series of Debt Securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred on the Indenture Trustee,
with respect to the Debt Securities of that series. However, if an event of
default under the Indenture relates to more than one series of Debt Securities,
only the registered owners of a majority in aggregate principal amount of all
affected series of Debt Securities, considered as one class, will have the right
to make that direction. Also, the direction must not violate any law or the
Indenture, and may not expose the Indenture Trustee to personal liability in
circumstances where its indemnity would not, in the Indenture Trustee's sole
discretion, be adequate (Indenture, Section 812).
No registered owner of Debt Securities of any series will have any
right to institute any proceeding under the Indenture, or any remedy under the
Indenture, unless:
(1) that registered owner has previously given to the Indenture
Trustee written notice of a continuing event of default with
respect to the Debt Securities of that series,
(2) the registered owners of a majority in aggregate principal
amount of the outstanding Debt Securities of all series in
respect of which an event of default under the Indenture
exists, considered as one class, have made written request to
the Indenture Trustee, and have offered reasonable indemnity
to the Indenture Trustee to institute that proceeding in its
own name as trustee, and
(3) the Indenture Trustee has failed to institute any proceeding,
and has not received from the registered owners of a majority
in aggregate principal amount of the outstanding Debt
Securities of all series in respect of which an event of
default under the Indenture exists, considered as one class, a
direction inconsistent with that request, within 60 days after
that notice, request and offer (Indenture, Section 807).
11
However, these limitations do not apply to a suit instituted by a registered
owner of a Debt Security for the enforcement of payment of the principal of or
any premium or interest on that Debt Security on or after the applicable due
date specified in that Debt Security (Indenture, Section 808).
FPL Group Capital is required to deliver to the Indenture Trustee an
annual statement as to its compliance with all conditions and covenants under
the Indenture (Indenture, Section 606).
MODIFICATION AND WAIVER. Without the consent of any registered owner of
Debt Securities, FPL Group Capital and the Indenture Trustee may amend or
supplement the Indenture for any of the following purposes:
(1) to provide for the assumption by any permitted successor to
FPL Group Capital of FPL Group Capital's obligations under the
Indenture and the Debt Securities in the case of a merger or
consolidation or a conveyance, transfer or lease of its
assets,
(2) to add covenants of FPL Group Capital or to surrender any
right or power conferred upon FPL Group Capital by the
Indenture,
(3) to add any additional events of default,
(4) to change, eliminate or add any provision of the Indenture,
provided that if that change, elimination or addition will
materially adversely affect the interests of the registered
owners of Debt Securities of any series or tranche, that
change, elimination or addition will become effective with
respect to that series or tranche only
(a) when the consent of the registered owners of Debt
Securities of that series or tranche has been
obtained, or
(b) when no Debt Securities of that series or tranche
remain outstanding under the Indenture,
(5) to provide security for all but not a part of the Debt
Securities,
(6) to establish the form or terms of Debt Securities of any other
series or tranche,
(7) to provide for the authentication and delivery of bearer
securities and the related coupons and for other matters
relating to those bearer securities,
(8) to accept the appointment of a successor Indenture Trustee
with respect to the Debt Securities of one or more series and
to change any of the provisions of the Indenture as necessary
to provide for the administration of the trusts under the
Indenture by more than one trustee,
(9) to add procedures to permit the use of a non-certificated
system of registration for the Debt Securities of all or any
series or tranche,
(10) to change any place where
(a) the principal of and premium, if any, and interest on
all or any series or tranche of Debt Securities are
payable,
(b) all or any series or tranche of Debt Securities may
be transferred or exchanged, and
(c) notices and demands to or upon FPL Group Capital in
respect of Debt Securities and the Indenture may be
served, or
(11) to cure any ambiguity or inconsistency or to add or change any
other provisions with respect to matters and questions arising
under the Indenture, provided those changes or additions may
not materially adversely affect the interests of the
12
registered owners of Debt Securities of any series or tranche
(Indenture, Section 1201).
The registered owners of a majority in aggregate principal amount of
the Debt Securities of all series then outstanding may waive compliance by FPL
Group Capital with certain restrictive provisions of the Indenture (Indenture,
Section 607). The registered owners of a majority in principal amount of the
outstanding Debt Securities of any series may waive any past default under the
Indenture with respect to that series, except a default in the payment of
principal, premium, if any, or interest and a default with respect to certain
restrictive covenants or provisions of the Indenture that cannot be modified or
amended without the consent of the registered owner of each outstanding Debt
Security of that series affected (Indenture, Section 813).
In addition to any amendments described above, if the Trust Indenture
Act of 1939 is amended after the date of the Indenture in a way that requires
changes to the Indenture or in a way that permits changes to, or the elimination
of, provisions that were previously required by the Trust Indenture Act of 1939,
the Indenture will be deemed to be amended to conform to that amendment of the
Trust Indenture Act of 1939 or to make those changes, additions or eliminations.
FPL Group Capital and the Indenture Trustee may, without the consent of any
registered owners, enter into supplemental indentures to make that amendment
(Indenture, Section 1201).
Except for any amendments described above, the consent of the
registered owners of a majority in aggregate principal amount of the Debt
Securities of all series then outstanding, considered as one class, is required
for all other modifications to the Indenture. However, if less than all of the
series of Debt Securities outstanding are directly affected by a proposed
supplemental indenture, then the consent only of the registered owners of a
majority in aggregate principal amount of outstanding Debt Securities of all
directly affected series, considered as one class, is required. But, if FPL
Group Capital issues any series of Debt Securities in more than one tranche and
if the proposed supplemental indenture directly affects the rights of the
registered owners of Debt Securities of less than all of those tranches, then
the consent only of the registered owners of a majority in aggregate principal
amount of the outstanding Debt Securities of all directly affected tranches,
considered as one class, will be required. However, none of those amendments or
modifications may:
(1) change the dates on which the principal of or interest on a
Debt Security is due without the consent of the registered
owner of that Debt Security,
(2) reduce any Debt Security's principal amount or rate of
interest (or the amount of any installment of that interest)
or change the method of calculating that rate without the
consent of the registered owner of that Debt Security,
(3) reduce any premium payable upon the redemption of a Debt
Security without the consent of the registered owner of that
Debt Security,
(4) change the currency (or other property) in which a Debt
Security is payable without the consent of the registered
owner of that Debt Security,
(5) impair the right to sue to enforce payments on any Debt
Security on or after the date that it states that the payment
is due (or, in the case of redemption, on or after the
redemption date) without the consent of the registered owner
of that Debt Security,
(6) reduce the percentage in principal amount of the outstanding
Debt Security of any series or tranche whose owners must
consent to an amendment, supplement or waiver without the
consent of the registered owner of each outstanding Debt
Security of that series or tranche,
(7) reduce the requirements for quorum or voting of any series or
tranche without the consent of the registered owner of each
outstanding Debt Security of that series or tranche, or
(8) modify certain of the provisions of the Indenture relating to
supplemental indentures, waivers of certain covenants and
waivers of past defaults with respect to the Debt Securities
of any series or tranche, without the consent of the
13
registered owner of each outstanding Debt Security affected by
the modification.
A supplemental indenture that changes or eliminates any provision of
the Indenture that has expressly been included only for the benefit of one or
more particular series or tranches of Debt Securities, or that modifies the
rights of the registered owners of Debt Securities of that series or tranche
with respect to that provision, will not affect the rights under the Indenture
of the registered owners of the Debt Securities of any other series or tranche
(Indenture, Section 1202).
The Indenture provides that, in order to determine whether the
registered owners of the required principal amount of the outstanding Debt
Securities have given any request, demand, authorization, direction, notice,
consent or waiver under the Indenture, or whether a quorum is present at the
meeting of the registered owners of Debt Securities, Debt Securities owned by
FPL Group Capital or any other obligor upon the Debt Securities or any affiliate
of FPL Group Capital or of that other obligor (unless FPL Group Capital, that
affiliate or that obligor owns all Debt Securities outstanding under the
Indenture, determined without regard to this provision) will be disregarded and
deemed not to be outstanding.
If FPL Group Capital solicits any action under the Indenture from
registered owners of Debt Securities, FPL Group Capital may, at its option, by
signing a written request to the Indenture Trustee, fix in advance a record date
for determining the registered owners of Debt Securities entitled to take that
action. However, FPL Group Capital will not be obligated to do this. If FPL
Group Capital does do this, that action may be taken before or after that record
date, but only the registered owners of record at the close of business on that
record date will be deemed to be registered owners of Debt Securities for the
purposes of determining whether registered owners of the required proportion of
the outstanding Debt Securities have authorized that action. For these purposes,
the outstanding Debt Securities will be computed as of the record date. Any
action of a registered owner of any Debt Security under the Indenture will bind
every future registered owner of that Debt Security, or any Debt Security
replacing that Debt Security, with respect to anything that the Indenture
Trustee or FPL Group Capital do, fail to do, or allow to be done in reliance on
that action, whether or not that action is noted upon that Debt Security
(Indenture, Section 104).
RESIGNATION OF INDENTURE TRUSTEE. The Indenture Trustee may resign at
any time with respect to any series of Debt Securities by giving written notice
of its resignation to FPL Group Capital. Also, the registered owners of a
majority in principal amount of the outstanding Debt Securities of one or more
series of Debt Securities may remove the Indenture Trustee any time with respect
to the Debt Securities of that series, by delivering an instrument evidencing
this action to the Indenture Trustee and FPL Group Capital. The resignation or
removal of the Indenture Trustee and the appointment of a successor trustee will
not become effective until a successor trustee accepts its appointment.
Except with respect to an Indenture Trustee appointed by the registered
owners of Debt Securities, the Indenture Trustee will be deemed to have resigned
and the successor will be deemed to have been appointed as trustee in accordance
with the Indenture if:
(1) no event of default under the Indenture or event that, after
notice or lapse of time, or both, would become an event of
default under the Indenture exists, and
(2) FPL Group Capital has delivered to the Indenture Trustee a
resolution of its Board of Directors appointing a successor
trustee and that successor trustee has accepted that
appointment in accordance with the terms of the Indenture
(Indenture, Section 910).
NOTICES. Notices to registered owners of Debt Securities will be sent
by mail to the addresses of those registered owners as they appear in the
security register for those Debt Securities (Indenture, Section 106).
TITLE. FPL Group Capital, the Indenture Trustee, and any agent of FPL
Group Capital or the Indenture Trustee, may treat the person in whose name a
Debt Security is registered as the absolute owner of that Debt Security, whether
or not that Debt Security is overdue, for the purpose of making payments and for
all other purposes, regardless of any notice to the contrary (Indenture, Section
308).
14
GOVERNING LAW. The Indenture and the Debt Securities will be governed
by, and interpreted in accordance with, the laws of the State of New York,
without regard to New York's conflict of law principles, except to the extent
that the law of any other jurisdiction is mandatorily applicable.
REGARDING THE INDENTURE TRUSTEE. In addition to acting as Indenture
Trustee, The Bank of New York acts as security registrar and paying agent under
the Indenture, as Guarantee Trustee under the Guarantee Agreement described
under "Description of the Guarantee" below and would act as purchase contract
agent under a purchase contract agreement described under "Description of Stock
Purchase Contracts and Stock Purchase Units" below. FPL Group Capital also
maintains various banking and trust relationships with The Bank of New York.
DESCRIPTION OF THE GUARANTEE
GENERAL. This section briefly summarizes some of the provisions of the
Guarantee Agreement, dated as of June 1, 1999, between FPL Group and The Bank of
New York, as Guarantee Trustee. The Guarantee Agreement was executed for the
benefit of the Indenture Trustee, which holds the Guarantee Agreement for the
benefit of registered owners of the Debt Securities covered by the Guarantee
Agreement. This summary does not contain a complete description of the Guarantee
Agreement. You should read this summary together with the Guarantee Agreement
for a complete understanding of the provisions that may be important to you. The
Guarantee Agreement is on file with the SEC and is incorporated by reference in
this prospectus. In addition, the Guarantee Agreement is qualified as an
indenture under the Trust Indenture Act of 1939 and is therefore subject to the
provisions of the Trust Indenture Act of 1939. You should read the Trust
Indenture Act of 1939 for a complete understanding of provisions that may be
important to you.
Under the Guarantee Agreement, FPL Group absolutely, irrevocably and
unconditionally guarantees the prompt and full payment, when due and payable
(including upon acceleration or redemption), of the principal, interest and
premium, if any, on the Debt Securities that are covered by the Guarantee
Agreement to the registered owners of those Debt Securities, according to the
terms of those Debt Securities and the Indenture. Pursuant to the Guarantee
Agreement, all of the Debt Securities are covered by the Guarantee Agreement
except Debt Securities that by their terms are expressly not entitled to the
benefit of the Guarantee Agreement. All of the Offered Debt Securities will be
covered by the Guarantee Agreement. This guarantee is referred to in this
prospectus as the "Guarantee." FPL Group is only required to make these payments
if FPL Group Capital fails to pay or provide for punctual payment of any of
those amounts on or before the expiration of any applicable grace periods
(Guarantee Agreement, Section 5.01). In the Guarantee Agreement, FPL Group has
waived its right to require the Guarantee Trustee, the Indenture Trustee or the
registered owners of Debt Securities covered by the Guarantee Agreement to
exhaust their remedies against FPL Group Capital prior to bringing suit against
FPL Group (Guarantee Agreement, Section 5.06).
The Guarantee is a guarantee of payment when due (i.e., the guaranteed
party may institute a legal proceeding directly against FPL Group to enforce its
rights under the Guarantee Agreement without first instituting a legal
proceeding against any other person or entity). The Guarantee is not a guarantee
of collection (Guarantee Agreement, Section 5.01).
SECURITY AND RANKING. The Guarantee is an unsecured obligation of FPL
Group, and will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of FPL Group. There is no limit on the amount of
other indebtedness, including guarantees, that FPL Group may incur or issue.
FPL Group is a holding company that derives substantially all of its
income from its operating subsidiaries. Therefore, the Guarantee is effectively
subordinated to debt and preferred stock incurred or issued by FPL Group's
subsidiaries. Neither the Indenture nor the Guarantee Agreement places any limit
on the amount of debt or preferred stock that FPL Group's subsidiaries may incur
or issue.
EVENTS OF DEFAULT. An event of default under the Guarantee Agreement
will occur upon the failure of FPL Group to perform any of its payment
obligations under the Guarantee Agreement (Guarantee Agreement, Section 1.01).
The registered owners of a majority of the aggregate principal amount of the
outstanding Debt Securities covered by the Guarantee Agreement have the right
to:
15
(1) direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee with respect
to the Guarantee Agreement, or
(2) direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee Agreement. (Guarantee
Agreement, Section 3.01).
The Guarantee Trustee must give notice of any event of default under
the Guarantee Agreement known to the Guarantee Trustee to the registered owners
of Debt Securities covered by the Guarantee Agreement within 90 days after the
occurrence of that event of default, in the manner and to the extent provided in
subsection (c) of Section 313 of the Trust Indenture Act of 1939, unless such
event of default has been cured or waived prior to the giving of such notice
(Guarantee Agreement, Section 2.07).
The Guarantee Trustee, the Indenture Trustee and the registered owners
of Debt Securities covered by the Guarantee Agreement have all of the rights and
remedies available under applicable law and may sue to enforce the terms of the
Guarantee Agreement and to recover damages for the breach of the Guarantee
Agreement. The remedies of each of the Guarantee Trustee, the Indenture Trustee
and the registered owners of Debt Securities covered by the Guarantee Agreement,
to the extent permitted by law, are cumulative and in addition to any other
remedy now or hereafter existing at law or in equity. At the option of any of
the Guarantee Trustee, the Indenture Trustee or the registered owners of Debt
Securities covered by the Guarantee Agreement, that person or entity may join
FPL Group in any lawsuit commenced by that person or entity against FPL Group
Capital with respect to any obligations under the Guarantee Agreement. Also,
that person or entity may recover against FPL Group in that lawsuit, or in any
independent lawsuit against FPL Group, without first asserting, prosecuting or
exhausting any remedy or claim against FPL Group Capital (Guarantee Agreement,
Section 5.06).
FPL Group is required to deliver to the Guarantee Trustee an annual
statement as to its compliance with all conditions under the Guarantee Agreement
(Guarantee Agreement, Section 2.04).
MODIFICATION. FPL Group and the Guarantee Trustee may, without the
consent of any registered owner of Debt Securities covered by the Guarantee
Agreement, agree to any changes to the Guarantee Agreement that do not
materially adversely affect the rights of registered owners. The Guarantee
Agreement also may be amended with the prior approval of the registered owners
of a majority in aggregate principal amount of all outstanding Debt Securities
covered by the Guarantee Agreement. However, the right of any registered owner
of Debt Securities covered by the Guarantee Agreement to receive payment under
the Guarantee Agreement on the due date of the Debt Securities held by that
registered owner, or to institute suit for the enforcement of that payment on or
after that due date, may not be impaired or affected without the consent of that
registered owner (Guarantee Agreement, Section 6.01).
REGARDING THE GUARANTEE TRUSTEE. In addition to acting as Guarantee
Trustee, The Bank of New York acts as Indenture Trustee under the Indenture and
would act as purchase contract agent under a purchase contract agreement. FPL
Group and its subsidiaries also maintain various banking and trust relationships
with The Bank of New York.
TERMINATION OF THE GUARANTEE AGREEMENT. The Guarantee Agreement will
terminate and be of no further force and effect upon full payment of all Debt
Securities covered by the Guarantee Agreement (Guarantee Agreement, Section
5.05).
GOVERNING LAW. The Guarantee Agreement will be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflict of laws principles thereunder, except to the extent that the law of
any other jurisdiction is mandatorily applicable (Guarantee Agreement, Section
5.07).
DESCRIPTION OF COMMON STOCK
GENERAL. The following statements describing FPL Group's common stock
are not intended to be a complete description. They are qualified in their
entirety by reference to FPL Group's Restated Articles of Incorporation
("Charter") and its bylaws, and where applicable, to the Restated Articles of
Incorporation of Florida Power & Light Company, and to the Mortgage and Deed of
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Trust, dated as of January 1, 1944, between Florida Power & Light Company and
Bankers Trust Company, as Trustee, as amended and supplemented (the "Mortgage").
Reference is also made to the laws of the State of Florida.
FPL Group's authorized capital stock consists of 300,000,000 shares of
common stock, $.01 par value, and 100,000,000 shares of serial preferred stock,
$.01 par value. As of the date of this prospectus, 175,959,537 shares of common
stock were issued and outstanding and no shares of serial preferred stock were
issued and outstanding. See "Description of Common Stock--Preferred Share
Purchase Rights." The common stock has no preemptive, subscription or conversion
rights, and there are no redemption or sinking fund provisions applicable
thereto. The outstanding shares of common stock are, and when issued the shares
offered hereby will be, fully paid and nonassessable.
All outstanding common stock is listed on the NYSE and trades under the
symbol "FPL". The registrar and transfer agent for the common stock is Equiserve
Trust Company, N.A.
DIVIDEND RIGHTS. Each share of common stock is entitled to participate
equally with respect to dividends declared on the common stock out of funds
legally available for the payment thereof.
The Charter of FPL Group does not limit the dividends that can be paid
on the common stock. However, as a practical matter, the ability of FPL Group to
pay dividends on its common stock is dependent upon dividends paid to it by its
subsidiaries, primarily Florida Power & Light Company. Florida Power & Light
Company's ability to pay dividends is limited by restrictions contained in
Florida Power & Light Company's Restated Articles of Incorporation and in the
Mortgage. However, these restrictions do not currently limit Florida Power &
Light Company's ability to pay dividends to FPL Group.
VOTING RIGHTS AND NON-CUMULATIVE VOTING. In general, the holders of
common stock are entitled to one vote per share for the election of directors
and for other corporate purposes. The Charter:
(1) permits the shareholders to remove a director only for cause
and only by the affirmative vote of 75% in voting power of the
outstanding shares of common stock and other outstanding
voting stock, voting as a class;
(2) provides that a vacancy on the Board of Directors may be
filled only by the remaining directors;
(3) permits shareholders to take action only at an annual meeting,
or a special meeting duly called by certain officers, the
Board of Directors or the holders of a majority in voting
power of the outstanding shares of voting stock entitled to
vote on the matter;
(4) requires the affirmative vote of 75% in voting power of the
outstanding shares of voting stock to approve certain Business
Combinations with an Interested Shareholder (as defined below)
or its affiliate, unless approved by a majority of the
Continuing Directors (as defined below) or, in certain cases,
unless certain minimum price and procedural requirements are
met; and
(5) requires the affirmative vote of 75% in voting power of the
outstanding shares of voting stock to amend the by-laws or to
amend certain provisions of the Charter including those
provisions discussed in (1) through (4) above.
Such provisions may have significant effects on the ability of the shareholders
to change the composition of an incumbent Board of Directors or to benefit from
certain transactions which are opposed by an incumbent Board of Directors.
The term "Interested Shareholder" is defined in the Charter to include
a security holder who owns 10% or more in voting power of the outstanding shares
of voting stock, and the term "Continuing Director" is defined in the Charter to
include any director who is not an affiliate of an Interested Shareholder. The
above provisions dealing with Business Combinations involving FPL Group and an
Interested Shareholder may discriminate against a security holder who becomes an
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Interested Shareholder by reason of the beneficial ownership of such amount of
common or other voting stock. The term "Business Combination" is defined in the
Charter to include:
(1) any merger or consolidation of FPL Group or any direct or
indirect majority-owned subsidiary with (a) an Interested
Shareholder or (b) any other corporation which is, or after
such merger or consolidation would be, an affiliate of an
Interested Shareholder;
(2) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition in one transaction or a series of transactions to
or with any Interested Shareholder or any affiliate of an
Interested Shareholder of assets of FPL Group or any direct or
indirect majority-owned subsidiary having an aggregate fair
market value of $10,000,000 or more;
(3) the issuance or transfer by FPL Group or any direct or
indirect majority-owned subsidiary in one transaction or a
series of transactions of any securities of FPL Group or any
subsidiary to any Interested Shareholder or any affiliate of
any Interested Shareholder in exchange for cash, securities or
other property, or a combination thereof, having an aggregate
fair market value of $10,000,000 or more;
(4) the adoption of any plan or proposal for the liquidation or
dissolution of FPL Group proposed by or on behalf of an
Interested Shareholder or an affiliate of an Interested
Shareholder; or
(5) any reclassification of securities, including any reverse
stock split, or recapitalization, of FPL Group, or any merger
or consolidation of FPL Group with any of its direct or
indirect majority-owned subsidiaries or any other transaction
which has the direct or indirect effect of increasing the
proportionate share of the outstanding shares of any class of
equity or convertible securities of FPL Group or any direct or
indirect wholly-owned subsidiary which is directly or
indirectly owned by any Interested Shareholder or any
affiliate of any Interested Shareholder.
The holders of common stock do not have cumulative voting rights, and
therefore the holders of more than 50% of a quorum (majority) of the outstanding
shares of common stock can elect all of FPL Group's directors. Unless otherwise
provided in the Charter or the by-laws or in accordance with applicable law, the
affirmative vote of a majority of the total number of shares represented at a
meeting and entitled to vote is required for shareholder action on a matter.
Voting rights for the election of directors or otherwise, if any, for any series
of the serial preferred stock, will be established by the Board of Directors
when such series is issued.
LIQUIDATION RIGHTS. After satisfaction of creditors and payments due
the holders of serial preferred stock, if any, the holders of common stock are
entitled to share ratably in the distribution of all remaining assets.
PREFERRED SHARE PURCHASE RIGHTS. The following statements describing
FPL Group's preferred share purchase rights (each, a "Right") are not intended
to be a complete description. They are qualified in their entirety by reference
to the form of Rights Agreement, dated as of July 1, 1996, between FPL Group and
Equiserve Trust Company, N.A., as successor Rights Agent, as amended by an
Amendment to Rights Agreement, dated as of July 30, 2000, each as filed with the
SEC.
On June 17, 1996, FPL Group's Board of Directors declared a dividend of
one Right for each outstanding share of common stock. Thereafter, until the
Distribution Date (as defined below), FPL Group will issue one Right with each
newly issued share of common stock. Each Right (prior to the expiration or
redemption of the Rights) will entitle the holder thereof to purchase from FPL
Group one-hundredth of a share of FPL Group's Series A Junior Participating
Preferred Stock, $.0l par value (Junior Preferred Shares), at an exercise price
of $120 per Right (Purchase Price), subject to adjustment. Until the
Distribution Date, the Rights are represented by the common stock certificates,
and are not exercisable or transferable apart from the common stock. The
Distribution Date is the earlier to occur of:
(1) the tenth day after the public announcement that a person or
group has acquired beneficial ownership of 10% or more of the
common stock, or
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(2) the tenth business day after a person commences, or announces
an intention to commence, a tender or exchange offer, the
consummation of which would result in the beneficial ownership
by a person or group of 10% or more of the common stock. At
any time before a person or group becomes a 10% holder, the
Board of Directors may extend the 10-day period.
Separate certificates evidencing the Rights will be mailed to holders of the
common stock as of the close of business on the Distribution Date. The Rights
are exercisable at any time after the Distribution Date, unless earlier
redeemed, or exchanged, and could then begin trading separately from the common
stock. The Rights do not have any voting rights and are not entitled to
dividends.
If a person or group becomes a 10% holder, each Right not owned by the
10% holder would become exercisable for the number of shares of common stock
which, at that time, would have a market value of two times the exercise price
of the Right. In the event that FPL Group is acquired in a merger or other
business combination transaction, or 50% or more of FPL Group's assets or
earning power are sold or otherwise transferred, after a person or group has
become a 10% holder, each Right will entitle its holder to purchase, at the
exercise price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction would have a market
value of two times the exercise price of the Right.
The Rights are redeemable by FPL Group's Board of Directors in whole,
but not in part, at $.01 per Right at any time prior to the time that a person
or group acquires beneficial ownership of 10% or more of the outstanding common
stock. The Rights will expire on June 30, 2006 (unless the expiration date is
extended or the Rights are earlier redeemed or exchanged as described below).
The Purchase Price, and the number of Junior Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution
(1) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Junior Preferred
Shares,
(2) as a result of the grant to holders of Junior Preferred Shares
of certain rights or warrants to subscribe for or purchase
Junior Preferred Shares at a price, or securities convertible
into Junior Preferred Shares with a conversion price, at less
than the current market price of Junior Preferred Shares, or
(3) as a result of the distribution to holders of Junior Preferred
Shares of evidences of indebtedness or assets (excluding
regular periodic cash dividends or dividends payable in Junior
Preferred Shares) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in the
Purchase Price. The number of Rights and the number of Junior Preferred Shares
purchasable upon exercise of each Right are also subject to adjustment in the
event of a stock split, subdivision, consolidation, combination or common stock
dividend on the common stock prior to the Distribution Date.
The Board of Directors of FPL Group may exchange the Rights at an
exchange ratio of one share of common stock per Right at any time that is
(1) after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 10% or more of
the outstanding common stock; and
(2) before the acquisition by a person or group of 50% or more of
the outstanding common stock.
The Rights have anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire FPL Group
without conditioning the offer on the redemption of the Rights or on the
acquisition of a certain number of Rights. The Rights beneficially owned by that
person or group may become null and void. The Rights should not interfere with
any merger or other business combination approved by the Board of Directors of
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FPL Group, since the Rights may be redeemed by FPL Group at $.01 per Right prior
to the time that a person or group has acquired beneficial ownership of 10% or
more of the common stock.
The Junior Preferred Shares purchasable upon exercise of the Rights
will be entitled to cumulative quarterly dividends in preference to the common
stock at a rate per share equal to the greater of $10 and 100 times the dividend
declared on the common stock for such quarter. In the event of any merger,
consolidation or other transaction in which the shares of common stock are
exchanged, each Junior Preferred Share will be entitled to receive 100 times the
amount and type of consideration received per share of common stock. In the
event of a liquidation of FPL Group, the holders of Junior Preferred Shares will
be entitled to receive in preference to the common stock the greater of $100 per
share and 100 times the payment made per share of common stock. FPL Group has
the right to issue other serial preferred stock ranking prior to the Junior
Preferred Shares with respect to dividend and liquidation preferences. The
Junior Preferred Shares will be redeemable after June 30, 2006, at FPL Group's
option, in whole or in part, at a redemption price per share equal to the
greater of
(1) the per share Purchase Price, and
(2) the then current market price of a Junior Preferred Share.
Each Junior Preferred Share will have 100 votes on all matters submitted to a
vote of the shareholders of FPL Group, voting together with the common stock.
The rights of the Junior Preferred Shares as to dividends, liquidation,
redemption and voting, and in the event of mergers and consolidations, are
protected by customary anti-dilution provisions. Because of the nature of the
dividend, liquidation, redemption and voting rights of the Junior Preferred
Shares, the value of the interest in a Junior Preferred Share purchasable upon
the exercise of each Right should approximate the value of one share of common
stock.
The Board of Directors of FPL Group may amend the Rights Agreement and
the Rights, without the consent of the holders of the Rights. However, any
amendment adopted after a person or group becomes a 10% holder may not adversely
affect the interests of holders of Rights.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
FPL Group may issue stock purchase contracts, including contracts that
obligate holders to purchase from FPL Group, and FPL Group to sell to these
holders, a specified number of shares of common stock at a future date or dates.
FPL Group Capital may also be a party to the stock purchase contracts. The
consideration per share of common stock may be fixed at the time the stock
purchase contracts are issued or may be determined by reference to a specific
formula set forth in the stock purchase contracts. The stock purchase contracts
may be issued separately or as a part of stock purchase units consisting of a
stock purchase contract and either Debt Securities or debt obligations of third
parties, including U.S. Treasury securities, that are pledged to secure the
holders' obligations to purchase the common stock under the stock purchase
contracts. The stock purchase contracts may require FPL Group and/or FPL Group
Capital to make periodic payments to the holders of some or all of the stock
purchase units or vice versa, and such payments may be unsecured or prefunded on
some basis. The stock purchase contracts may require holders to secure their
obligations under these stock purchase contracts in a specified manner.
A prospectus supplement will describe the terms of any stock purchase
contracts or stock purchase units being offered. The description in the
prospectus supplement will not necessarily be complete, and reference will be
made to the stock purchase contracts. Some of the important United States
Federal income tax considerations applicable to the stock purchase units and
stock purchase contracts will be discussed in the related prospectus supplement.
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PLAN OF DISTRIBUTION
FPL Group and FPL Group Capital may sell the securities offered
pursuant to this prospectus ("Offered Securities"):
(1) through underwriters or dealers,
(2) through agents, or
(3) directly to one or more purchasers.
THROUGH UNDERWRITERS OR DEALERS. If FPL Group or FPL Group Capital uses
underwriters in the sale of the Offered Securities, the underwriters will
acquire the Offered Securities for their own account. The underwriters may
resell the Offered Securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The underwriters may sell the Offered Securities directly
or through underwriting syndicates represented by managing underwriters. Unless
otherwise stated in the prospectus supplement relating to the Offered
Securities, the obligations of the underwriters to purchase those Offered
Securities will be subject to certain conditions, and the underwriters will be
obligated to purchase all of those Offered Securities if they purchase any of
them. If FPL Group or FPL Group Capital uses a dealer in the sale, FPL Group or
FPL Group Capital will sell the Offered Securities to the dealer as principal.
The dealer may then resell those Offered Securities at varying prices determined
at the time of resale.
Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
THROUGH AGENTS. FPL Group or FPL Group Capital may designate one or
more agents to sell the Offered Securities. Unless otherwise stated in a
prospectus supplement, the agents will agree to use their best efforts to
solicit purchases for the period of their appointment.
DIRECTLY. FPL Group or FPL Group Capital may sell the Offered
Securities directly to one or more purchasers. In this case, no underwriters,
dealers or agents would be involved.
GENERAL INFORMATION. A prospectus supplement will state the name of any
underwriter, dealer or agent and the amount of any compensation, underwriting
discounts or concessions paid, allowed or reallowed to them. A prospectus
supplement will also state the proceeds to FPL Group or FPL Group Capital from
the sale of the Offered Securities, any initial public offering price and other
terms of the offering of those Offered Securities.
FPL Group and FPL Group Capital may authorize underwriters, dealers or
agents to solicit offers by certain institutions to purchase the Offered
Securities from FPL Group and FPL Group Capital at the public offering price and
on the terms described in the related prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future.
FPL Group and FPL Group Capital may have agreements to indemnify
underwriters, dealers and agents against certain civil liabilities, including
liabilities under the Securities Act of 1933.
EXPERTS
The consolidated financial statements incorporated by reference in this
prospectus from FPL Group's Annual Report on Form 10-K have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated by reference herein, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
Legal conclusions and opinions specifically attributed to counsel, if
any, in the documents incorporated by reference in this prospectus have been
reviewed by Steel Hector & Davis LLP, West Palm Beach, Florida, counsel to FPL
Group and FPL Group Capital, and are set forth on the authority of that firm as
experts.
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LEGAL OPINIONS
Steel Hector & Davis LLP, West Palm Beach, Florida and Thelen Reid &
Priest LLP, New York, New York, co-counsel to FPL Group and FPL Group Capital,
will pass upon the legality of the Offered Securities for FPL Group Capital and
FPL Group. Pillsbury Winthrop LLP, New York, New York, will pass upon the
legality of the Offered Securities for any underwriter, dealer or agent. Thelen
Reid & Priest LLP and Pillsbury Winthrop LLP may rely as to all matters of
Florida law upon the opinion of Steel Hector & Davis LLP. Steel Hector & Davis
LLP may rely as to all matters of New York law upon the opinion of Thelen Reid &
Priest LLP.
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. NEITHER FPL GROUP
CAPITAL NOR FPL GROUP HAS AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT
INFORMATION. NEITHER FPL GROUP CAPITAL NOR FPL GROUP IS MAKING AN OFFER OF THESE
OFFERED SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE
DOCUMENTS.