Summary
NextEra Energy, Inc. (NEE) announced on December 7, 2011, a significant capital allocation initiative through an accelerated share repurchase (ASR) agreement. The company purchased approximately 6.7 million shares of its common stock for $375 million at $55.76 per share. This buyback is part of its ongoing share repurchase program. These repurchases are strategically funded, in part, by the expected proceeds of approximately $825 million from the recent and upcoming sale of five natural gas-fired power plants. NextEra Energy views this use of capital as aligned with its core strategy to maintain a strong investment-grade credit rating by optimizing its capital structure.
Key Highlights
- 1NextEra Energy initiated an accelerated share repurchase (ASR) of approximately 6.7 million shares of common stock for $375 million.
- 2The ASR agreement was executed at a price of $55.76 per share.
- 3Proceeds from the sale of five natural gas-fired power plants are expected to generate approximately $825 million in cash.
- 4A portion of the proceeds from the power plant sales will fund the share repurchase.
- 5The company stated the repurchase strategy supports its goal of maintaining a strong investment-grade credit rating.
- 6The final number of shares repurchased will be determined at settlement, expected in Q1 2012.
- 7All repurchased shares will be retired.
Frequently Asked Questions
NextEra Energy is repurchasing shares as part of its ongoing share repurchase plan. This action is intended to optimize its capital structure and maintain a strong investment-grade credit rating, a stated strategic objective.
The share repurchase is being funded, in part, by proceeds from the sale of five natural gas-fired power plants. These sales are expected to generate approximately $825 million in cash.
The final settlement of the accelerated share repurchase agreement is expected to occur during the first quarter of 2012. At that time, the exact number of shares repurchased will be finalized, and there may be adjustments based on the stock's trading price during the settlement period.
All shares repurchased under this agreement will be retired.