Slide 1: Filed by FPL Group pursuant to Rule 425
Filed by FPL Group, Inc. pursuant to Rule 425 under the Securities Act of 1933, as amended and deemed as filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, as amended Subject Company: FPL Group, Inc. Commission File No.:1-8841 This communication is not a solicitation of a proxy
Slide 2: Earnings conference call first quarter 2006
Earnings conference call first quarter 2006 May 2 2006 Slide 2
Slide 3: Non-solicitation notice
This communication is not a solicitation of a proxy from any security holder of FPL Group or Constellation Energy. Constellation Energy intends to file with the Securities and Exchange Commission a registration statement that will include a joint proxy statement prospectus of Constellation Energy an
Slide 4: Forward-looking statements
Any statements made herein about future operating results or other future events are forwardlooking statements under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forwardlooking statements may include, for example, statements regarding anticipated future f
Slide 5: Overview of First Quarter 2006
Overview of First Quarter 2006 Outstanding performance at FPL Energy Favorable market conditions Excellent operational performance Slightly abovenormal wind resource Florida Power and Light Company below expectations Primarily mild weather Outlook 2006 focus on execution Expectations remain 2.80 to
Slide 6: FPL Group Results First Quarter
FPL Group Results First Quarter GAAP adjusted net income EPS (dollars millions) 137 248 0.36 0.63 168 228 0.44 0.58 05 06 See Appendix for reconciliation of GAAP to adjusted amounts Slide 6
Slide 7: FPL First Quarter Summary
FPL First Quarter Summary Continued good customer growth Weather adjusted usage per customer flat Below normal weather Depreciation down offset by increases in O&M and interest, plus reduction in AFUDC 2005 storm cost recovery proceedings New ten year site plan Slide 7
Slide 8: Florida Power and Light Earnings
Florida Power and Light Earnings First quarter net income EPS (dollar millions) 111 122 0.30 0.31 05 06 Slide 8
Slide 9: Growth in Customer Accounts
Growth in Customer Accounts First Quarter Comparisons 1 (thousands) 10 year average 60 61 69 88 90 76 93 106 95 92 97 98 99 00 01 02 03 04 05 06 1 Change in average customer accounts from prior years first quarter Slide 9
Slide 10: Retail Sales at FPL
Retail Sales at FPL First Quarter 2.2 percent customer growth (0.5 percent) usage growth due to weather 0.0 percent underlying usage growth, mix, and other 1.7 percent kWh sales growth Slide 10
Slide 11: FPL O and M and Depreciation
FPL O and M and Depreciation First Quarter ( millions) O and M 310 330 05 06 Depreciation 230 195 05 06 Figures include amounts that are recovered through cost recovery clauses which have no impact on net income Slide 11
Slide 12: FPL Earnings Contribution Drivers
FPL Earnings Contribution Drivers First Quarter (dollar per share) FPL 2005 EPS 0.30 drivers customer growth 0.03 usage due to weather (0.01) underlying usage growth mix and other 0.00 O and M (0.02) depreciation 0.06 AFUDC and interest expense (0.05) other 1 0.00 FPL 2006 EPS $0.31 1 including shar
Slide 13: 2005 Storm Cost Recovery Update
2005 Storm Cost Recovery Update January 13 filing proposed consolidating 213 million remaining 2004 costs 816 million 2005 costs 650 million reserve rebuild Hearings held April 19 21 Prudency Level of reserve Securitization vs. surcharge Multiple intervenors OPC proposed a 166 million of adjustments
Slide 14: Capacity additions and fuel diversity at FPL
Capacity additions and fuel diversity at FPL 10 year Power Plant Site Plan (2006 to 2015) filed earlier this month with the FPSC Clean coal alternatives being evaluated for 2012 and 2013 Notified NRC of intent to submit license application in 2009 to build new Florida nuclear plant Slide 14
Slide 15: FPL Energy First Quarter Summary
FPL Energy First Quarter Summary Outstanding results overall Strong operational performance Good wind and hydro resource availability Favorable market conditions Good progress on wind development Pipeline is full for 2006 Expect to add approximately 760 mw of new development Acquired an additional 3
Slide 16: FPL Energy results first quarter
FPL Energy results first quarter GAAP Net Income (millions) EPS 37 151 0.10 0.38 05 06 Adjusted Net Income ( millions) EPS 68 128 0.18 0.32 05 06 See Appendix for reconciliation of GAAP to adjusted amounts Slide 16
Slide 17: FPL Energy Contribution Drivers
FPL Energy Contribution Drivers (dollars per share) First Quarter FPL Energy 2005 Adjusted EPS 0.18 Drivers New investment 0.05 existing assets 0.16 asset optimization and trading 0.00 restructuring activities (0.03) other 1 (0.04) FPL Energy 2006 Adjusted EPS 0.32 1 including interest expense share
Slide 18: Significantly Improved Market Conditions
Significantly Improved Market Conditions Market Update Ca 07 forward 3 31 06 change in cal 07 forward 1 3 05 to 12 30 05 change in cal 07 forward 12 31 05 to 3 31 06 Natural Gas (dollars per MMBTU) 1 9.60 4.51 (0.065) NEPOOL 7 by 24 Power 2 86.28 36.91 (5.48) NEPOOL Spark Spreads 3 23.80 8.43 (3.20)
Slide 19: FPL Energy Contract Coverage
FPL Energy Contract Coverage Balance of 2006 2007 asset class wind contracted merchant nepool ercot all other total portfolio available mw percent mw under contract 3183 2436, 2215 2560 1411 11804 98 99 66 88 75 87 3254 2461 2454 2619 1372 12160 96 99 59 52 33 1 Weighted to reflect inservice dates p
Slide 20: Earnings Per Share Contributions First Quarter
Earnings Per Share Contributions First Quarter GAAP 05 06 Change FPL 0.30 0.31 0.01 FPL Energy 0.10 0.38 0.28 Corporate and other (0.04) (0.06) (0.02) Total 0.36 0.63 0.27 Adjusted 05 06 FPL 0.30 0.31 0.01 FPL Energy 0.18 0.32 0.14 corporate and other (0.04) (0.05) (0.01), total 0.44 0.58 0.14 See a
Slide 21: Adjusted Earnings Per Share Expectations
Adjusted Earnings Per Share Expectations 2006E 1 2007E 1 FPL 2.05 to 2.10 2.15 to 2.25 FPL Energy 0.90 to 1.00 1.15 to 1.35 Other (0.15) to (0.20) (0.15) to (0.20) Consolidated 2.80 to 2.90 3.15 to 3.35 Note the 2006 and 2007 adjusted earnings expectations are valid as of today (May 2 2006) and shou
Slide 22: Q and A Session
Q and A Session Slide 22
Slide 23: Appendix
Appendix Slide 23
Slide 24: FPL Group Key Assumptions
FPL Group Key Assumptions1 FPL 2 percent customer growth No usage per customer growth in 2006 1 percent in 2007 Continued cost control Turkey Point expansion remains on schedule (mid 2007) Normal weather FPL Energy Wind development 625 to 750 mw each year 2006 and 2007 Market forwards at year end 20
Slide 25: Drivers of FPL Energy Earnings Growth 2005 to 2006
Drivers of FPL Energy Earnings Growth 2005 to 2006 1 2005 EPS 0.78 New investments 0.24 0.28 Existing portfolio 0.08 0.12 Asset restructuring marketing and trading (0.02) 0.02 Interest (0.07) (0.05) All other including share dilution (0.04) (0.02) Expected 2006 EPS Range 0.90 1.00 1 Assumes normal w
Slide 26: Drivers of FPL Energy Earnings Growth 2006 to 2007
Drivers of FPL Energy Earnings Growth 2006 2007 1 expected 2006 EPS Range 0.90 1.00 New investments 0.12 0.24 Existing portfolio 0.10 0.20 Asset restructuring, marketing and trading (0.01) 0.01 Interest (0.05) (0.03) All other including share dilution (0.02) 0.02 Expected 2007 EPS Range 1.15 to 1.35
Slide 27: FPL Potential Drivers of 2006 Earnings Variability
FPL Potential Drivers of 2006 Earnings Variability Issue Variability Potential Impact Balance of 2006 Weather variability at 80 percent probability plus or minus 6 cents Revenue growth plus or minus 10 to 20 bps plus or minus 1 to 2 cents O and M expenses sensitivity plus or minus 2 percent plus or
Slide 28: FPL Energy Potential Drivers of 2006 Earnings Variability
FPL Energy Potential Drivers of 2006 Earnings Variability Issue Sensitivity Variability Potential Impact Balance of 2006 Weather Wind portfolio wind resource 1 wind index 1 1.5 to 2 cents Maine hydro rainfall snow pack plus or minus 20 percent plus or minus 2 cents Market risk commodity prices 2 dol
Slide 29: Non qualifying Hedges Summary of Activity
Non qualifying Hedges 1 summary of Activity (millions, after tax) Asset (Liability) Balance as of 12 31 05 (90.2) Amounts Realized During first Quarter 3.1 Change in Forward Prices (all positions) 19.6 Subtotal 22.7 Asset (Liability) Balance as of 3 31 06 (67.5) Primary Drivers revenue hedges 22.9 R
Slide 30: Non qualifying Hedges Summary of Activity (thousands)
Non qualifying Hedges 1 Summary of Activity dollar thousands, after tax) 1st Quarter Asset Deals Asset (Liability) Change in Executed Total (Liability) Balance Amounts Forward During Unrealized Balance Description 12 31 05 Realized Prices Period 2 MTM 3 31 06 Gas Supply Contract $25,672 (4,047) (4,3
Slide 31: Non qualifying Hedges Summary of Forward Maturity
Non qualifying Hedges 1 Summary of Forward Maturity thousands, after tax) Asset (Liability) Gain (Loss) 2 Balance 2010 Total Description 3 31 06 2006 2007 2008 2009 2015 2006 2015 Gas Supply Contract 17,268 (7,388) (9,880) (17,268) Other net (84,767) 48,242 9,413 8,197 1,971 16,944 84,767 Total (67,
Slide 32: FPL Energy Wind Index
FPL Energy Wind Index Rolling 5 quarters current portfolio 1 88 95 96 95 102 1Q05 2Q05 3Q05 4Q05 1Q06 Average wind speed for the period from those reference towers chosen to represent FPL Energys portfolio weighted index based on FPL Energys portfolio as of 3 31 06 100 long term historic annual weig
Slide 33: Bridging Reference Tower Wind Speed to Earnings Impact
Bridging Reference Tower Wind Speed to Earnings Impact Correlation factor effect (tower to site) Wind shear derivation (convert lower level measured wind to predicted) Air density assumption Turbine specific performance (power curve) Availability Reliability Curtailments Price paid by buyer Referenc
Slide 34: Regional Long Term Wind Reference Location
Regional Long Term Wind Reference Location Denotes new references included to better describe FPLE Wind Portfolio FPL Energy plant operations Walla Walla Concord Livermore Bakersfield Lancaster Palm Springs Pierre Evanston Garden City Clovis Jamestown Pipestone Mason City Lone Rock Gage Clinton Abil
Slide 35: FPL Energy MWs and Regional Reference Towers
FPL Energy MWs and Regional Reference Towers First Quarter long term 2005 2005 Long Term 1Q1Q2005 1Q2005 1Q20061Q2006 Associated Avg. Wind Avg. Wind Wind Speed Avg. Wind Avg. Wind Wind Speed Avg. Wind Wind Speed Reference Tower Net MWs Speed (m s) Speed (m s) Index Speed (m s) Speed (m s) IndexSpeed
Slide 36: Reconciliation of Net Income to Adjusted Earnings
Florida Power Corporate & (millions, except per share amounts) and Light FPL EnergyOtherFPL Group, Inc. Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss) Net Income (Loss)122 151 (25) 248 Adjustments, net of income taxes Merger Costs 3 3 Net unrealized marktomarket (gains) losses assoc
Slide 37: Reconciliation of Net Income to Adjusted Earnings
Florida Power Corporate and (millions, except per share amounts) and Light FPL Energy Other FPL Group, Inc. Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss) Net Income (Loss) 111 37 (11) 137 Adjustments, net of income taxes Net unrealized mark to market (gains) losses associated with
Slide 38: Cautionary Statements And Risk Factors
Cautionary Statements And Risk Factors That May Affect Future Results In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), FPL Group, Inc. (FPL Group) and Florida Power Light Company (FPL) are hereby filing cautionary statements identify
Slide 39: Risk factors: changing market environment
FPL Group and FPL operate in a changing market environment influenced by various legislative and regulatory initiatives regarding deregulation, regulation or restructuring of the energy industry, including deregulation of the production and sale of electricity. FPL Group and its subsidiaries will ne
Slide 40: Risk factors: access to capital markets
FPL Group and FPL rely on access to capital markets as a significant source of liquidity for capital requirements not satisfied by operating cash flows. The inability of FPL Group, FPL Group Capital Inc (FPL Group Capital) and FPL to maintain their current credit ratings could affect their ability t
Slide 41: Conference Call First Quarter 2006 Earnings Release
FPL Group Conference Call First Quarter 2006 Earnings Release May 2, 2006 1. First Quarter 2006 Earnings Conference Call Jim von Riesemann Good morning and welcome to our 2006 first quarter earnings conference call.
Slide 42: Non-Solicitation
Moray Dewhurst, Chief Financial Officer of FPL Group, will provide an overview of our performance for the first quarter. Lew Hay, FPL Group's Chairman, President, and Chief Executive Officer, Armando Olivera, President of Florida Power & Light Company, and Jim Robo, President of FPL Energy are also
Slide 43: FPL Group first quarter overview
The outstanding performance at FPL Energy reflects strength across the board. We entered the year highly hedged, but good market conditions and incremental generation from outstanding operational performance, coupled with a wind resource index a little above normal led to us exceeding our expectatio
Slide 44: Florida Power & Light first quarter
FPL's performance for the first quarter was somewhat disappointing. On the good side, customer growth continued at a strong pace, albeit slower than in recent years. Usage per customer was roughly flat, with the exception of the weather impact, which was negative even relative to a weak 2005. Increa
Slide 45: FPL costs and depreciation
fleet vehicle costs and additional restoration expenses, although there has been no decline in overall system reliability. Looking forward, we expect to see increases for the full year in generation, transmission & distribution, and customer service, as well as continued increases in employee benefi
Slide 46: Storm cost recovery
Since the petition was filed we have further refined our estimates of final costs based on new information and have reduced the total estimated unrecovered 2004 and 2005 storm costs by approximately $46 million. Two weeks ago the Commission held three days of hearings on the prudency of the 2005 cos
Slide 47: FPL Energy - First Quarter Overview
14. FPL Energy - First Quarter Overview Let me turn now to FPL Energy, which delivered outstanding results, driven by strong operational performance coupled with favorable market conditions and weather resources that were closer to long-term historical averages, especially in the wind category, than
Slide 48: FPL Energy earnings contribution drivers
Contributions from our existing assets increased 16 cents per share, with four cents coming from the existing wind portfolio, as wind resources returned to more normal conditions. The wind index for the first quarter of 2006 was 102 versus an index of 88 in last year's comparable period; please refe
Slide 49: FPL Energy Contract Coverage
18. FPL Energy Contract Coverage Let me now update you on our contract coverage at FPL Energy. I would encourage you to access the slides that are available on our website, www.fplgroup.com under the investors section, since I will not review every number on the slide. These slides were also e-maile
Slide 50: Outlook and comments on merger
range for this year. Our outlook for Florida Power & Light assumes normal weather for the balance of the year, normal operational conditions, and a satisfactory outcome to the storm cost recovery proceedings. We will have a much better feel for Florida Power & Light's position after the second quart