Spreadsheet: benjamin_rogers__1067__NewCo-1-19-00
Sheet: Sky River

Sky River |  | 77 | MW
INCOME STATEMENT
('000 $) |  |  | 1999 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Total | Net Total
Revenue
PPA Period:
Demand Payment |  |  | 1
Energy Payment |  |  | 1
Block Payment |  |  | 1
Market Period:
Demand Payment |  |  | 1
Variable Revenue |  |  | 1
Energy Margin |  |  | 1
Interest Income |  |  | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
Total Revenue
Expense
Fuel  (Includes Fixed Transportation) |  |  | 0
Fixed O&M |  |  | 0
Variable O&M |  |  | 0
Major Maintenance & Ongoing Capex (Cash) |  |  | 0
Insurance |  |  | 0
SG&A |  |  | 0
Utility Start Up Power (included in O&M) |  |  | 0
Property, Other Taxes |  |  | 0
Debt Service L/C Fee |  |  | 0
Marketing Fee |  |  | 0
Administrative Fee |  |  | 0
O&M Fees |  |  | 0
Total Expense
EBITDA
Depreciation & Amortization |  |  |  | 0
EBIT
Interest Expense | 0 |  | (25% of EBITDA)
EBT
Book State Tax Benefit / (Expense) |  | 0.05
Shareholder Fed. Tax Benefit / (Expense) |  | 0.35
Net Income
PTC |  |  |  | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
 |  |  | implied CF
CASH FLOW
FPLE Interest |  | 0.5
('000 $) |  |  | 1999
EBITDA
Capital Expenditures |  |  |  | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
Debt Service |  |  | (50% of EBITDA)
 |  |  |  | 0
Pre Tax Cash Flow
Cash Taxes Benefit (Expense)
After Tax Cash Flow
Net Income to FPLE
Distributable Cash to FPLE
Valuation
Pre Tax Cash Flow
Tax Benefit / (Expense)
PTC
Residual Value |  |  |  |  | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
After Tax Cash Flow |  |  |  | -78323.86580634618
 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Residual Value
NPV |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2020 EBITDA
Equity Discount Rate |  | 0.09 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Adjustment Factor |  |  |  | 1
 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Adjusted EBITDA
 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | EBITDA Multiple |  |  |  | 8
 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Residual Value
Depreciable Basis
Debt (12/31/00) |  |  |  |  | Total Principal Payment
Equity
Percent Depreciable |  |  | 0.9
Depreciable Basis
GAAP Depreciation
Life | 30 | SL
Additional Depreciation @ FPLE
Tax Depreciation
Basis
Depreciation Rate: 5 Year 200% MACRS HY |  |  |  |  | 0.2 | 0.32 | 0.192 | 0.1152 | 0.1152 | 0.0576 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
Tax Depreciation
Additional Depreciation @ FPLE
Taxable Income
Tax Depreciation
Interest Expense
Taxable Income
State Income Tax
Federal Income Tax
FPLE Net Income
Interest Income - Loan Receivable |  |  |  |  | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
Fee Income
Total Other Income
State Taxes
Federal Taxes
Net Income from Interest and Fee to FPLE
Total FPLE Net Income
FPLE Other Cash Flows
Principal on Note Receivable |  |  |  |  | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0
NPV
Equity Discount Rate
Valuation of FPLE's Project Interest
FPLE's Share of Project
Note Receivable |  |  |  | (goes to FPLE Debt)
PV of Fee Income
Value of FPLE's Interest
Notes:
No lease payments
O&M is not fixed. 50%-75% is labour
Ongoing Capex (parts replacement) is not included or is lumped into fixed O%M
Both O&M and [NAME] should rise as a % of fixed price revenue. Capex follows "bathtub effect".
Loan shown here would be 30 years (project started in 1990)
 | Turbine life of V-27 is 20 years
Book deprecitiation is 30 years (20 year turbine life)
Tax benefit in Net income based on book depreciation, just plain wrong
Tax benefit in Net income ignores deferred portion of tax
Calculations do not show Avoided Cost forecast and Capacity (Demand) payment
Cashflow Debt assumptions ignore actual debt outstanding and assume refinance with 30 year turbine life
Actual debt outstanding on 1/31/00 will be $66,885mm
Depreciable basis for MACRS
 | 92-97% of total value depreciable at 5 year MACRS is ok rule of thumb
 | FPL has fully depreciated any asset owned more than 6 years from start date or from repower start date
 | NewCo would indeed get new round of MACRS but realize that FPL would not get this under Lease Agreement
Corporate effective tax rate implied at 38%
 | ok estimate but there is indication they don't understand Apportionment as it applies to state tax
 | NewCo state tax shield may be non-existant, Apportionment rules would need tax review, conclusion would differ with Lease Agreement
Equity Cashflow
 | Discounted at unlevered rate but leverage included in cashflow
 | If WACC is 9% implied equity at this Valuation is 13%  : 9% is low for PPA with Price Risk
 | However this valuation is very high (RAC valued EWC's half at $22mm with 15% equity discount (EWC owns less than half due to cash allocations and flips)
 | Historically FPL has financed projects at 17%-19% equity range
 | Using balance sheet rather than project finance, FPL still earns about 15% - 17% for their equity
Cashflow from fees ignores expense associated with services
Would FPL keep their [NAME] note or sell it?