Slide 1: Filed by FPL Group, Inc. 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: Non Solicitation
Non Solicitation 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 Conste
Slide 3: 2005 An Extraordinary Year
2005 An Extraordinary Year External Environment Another record setting hurricane season Strengthening fuel price fundamentals Hot summer weather in key markets High, volatile prices Florida Power & Light 2004 storm cost recovery proceedings Base rate case settlement 1,900 MW new generation in servic
Slide 4: FPL Group Results
FPL Group Results fourth Quarter GAAP adjusted net income EPS ($ millions) $173 $206 $0.47 $0.53 $175 $179 $0.47 $0.46 04 05 See Appendix for reconciliation of GAAP to adjusted amounts FPL Group Results full year GAAP adjusted net income EPS ($ millions) $887 $885 $2.45 $2.29 $890 $997 $2.46 $2.58 0
Slide 5: Florida Power & Light Earnings
Florida Power & Light Earnings fourth quarter full year net income EPS ($ millions) $164 $124 $0.45 $0.32 $749 $748 $2.07 $1.94 04 05
Slide 6: Growth in Customer Accounts and Retail Sales at FPL
Growth in Customer Accounts Fourth Quarter Comparisons1 (thousands) Full Year Comparisons1 (thousands) 10 year Average 84.0 10 year Average 83.3 103 94 101 03 04 05 97 107 97 1 Change in average customer accounts from prior period Retail Sales at FPL Fourth Quarter 2.4 percent customer growth (3.9 p
Slide 7: FPL O&M
FPL O&M ($ millions) Fourth Quarter Full Year $290 $347 $1,228 $1,307 04 05 Figures include amounts that are recovered through cost recovery clauses which have no impact on net income
Slide 8: FPL Depreciation and Earnings Contribution Drivers
FPL Depreciation ($ millions) Fourth Quarter Full Year $229 $243 $915 $951 04 05 Figures include amounts that are recovered through cost recovery clauses which have no impact on net income FPL Earnings contribution Drivers ($ share) Fourth Quarter Full Year FPL 2004 EPS $0.45 $2.07 Drivers Customer
Slide 9: Storm Costs Update
Storm Costs Update 2004 costs $213 million remaining to be recovered under base rate surcharge ($1.65 per month per 1,000 kWh) 2005 costs Four hurricanes total estimated cost $906 million January 13th filing with FPSC Propose consolidating 2004, 2005 costs, plus rebuild of reserve total cost $1,690
Slide 10: Fuel Cost Recovery and FPL Energy Overview
Fuel Cost Recovery Fuel clause recovery costs approved by Florida regulators in November 2005 As approved 10 04 $3.9b Incremental incurred $1.1b Total $5.0b Deferred to 2007 recovery $307m approved for recovery in 20061 $743m 2006 estimated and approved $5.8b Total fuel clause recovery 2006 $6.6b Ty
Slide 11: FPL Energy Results Fourth Quarter
FPL Energy Results fourth Quarter gaap adjusted net income ($millions) eps $(11) $86 $(0.03) $(9) $0.22 $59 ($0.03) $0.15 04 05 See Appendix for reconciliation of GAAP to adjusted amounts
Slide 12: FPL Energy Results Full Year and Earnings Drivers
FPL Energy Results full year gaap adjusted net income ($millions) eps $172 $187 $0.48 $0.49 $175 $299 $0.49 $0.78 04 05 See Appendix for reconciliation of GAAP to adjusted amounts FPL Energy Earnings Contribution Drivers ($ share) Fourth quarter Full Year FPL Energy 2004 Adjusted EPS $(0.03) $0.49 D
Slide 13: 2005 Wind Resource Performance
2005 Wind Resource Performance Fourth Quarter Wind Speed Index 1 Full Year Wind Speed Index 1 95 95 98 93 04 05 1 2005 annual wind resource sensitivity variability of 1 wind index annual EPS impact of 2 3 2 Average wind speed for the period from those reference towers chosen to represent FPL Energy'
Slide 14: FPL Energy Contract Coverage
FPL Energy Contract Coverage 2006 2007 asset class wind contracted merchant nepool ercot all other total portfolio available mw percent mw under contract 3,166 2,465, 2,281 2,598 1,417 11,925 97 99 74 87 58 86 3,287 2,465 2,454 2,627 1,327 12,204 93 99 49 37 18 65 1 Weighted to reflect in service da
Slide 15: Flattening Curve Natural Gas Forward Prices
Flattening Curve Natural Gas Forward Prices natural gas forwards nymex henry hub $ mmbtu delivery period 2006 2007 2008 2009 2010 2011 2012 2013 $12.00 $11.00 $10.00 $9.00 $8.00 $7.00 $6.00 1 20 2006 9 30 2005
Slide 16: Earnings Per Share Contributions
Earnings Per Share Contributions Fourth Quarter GAAP 04 05 Change FPL $0.45 $0.32 $(0.13) FPL Energy (0.03) 0.22 0.25 Corporate and Other 0.05 (0.01) (0.06) Total $0.47 $0.53 $0.06 Adjusted 04 05 Change FPL $0.45 $0.32 $(0.13) FPL Energy (0.03) 0.15 0.18 Corporate and Other 0.05 (0.01) (0.06) Total
Slide 17: Adjusted Earnings Per Share Expectations
Adjusted Earnings Per Share Expectations 2006E1 2007E1 FPL $2.05 2.10 $2.15 2.25 FPL Energy 0.90 1.00 1.15 1.35 Other (0.15) (0.20) (0.15) (0.20) Consolidated $2.80 2.90 $3.15 3.35 Note the 2006 and 2007 adjusted earnings expectations are valid as of today (January 27, 2006) and should be viewed in
Slide 18: The New Entity: A Unique And Compelling Combination
The New Entity A Unique And Compelling Combination The premier competitive energy provider offering attractive growth and a balanced, moderate risk posture a solid base of stable, growing earnings and cash flow built on the strongest balance sheet in the industry wholesale retail generation florida
Slide 19: Appendix
Q&A Session Appendix
Slide 20: 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 625 750 mw each year, 2006 and 2007 Market forwards at year end 2005
Slide 21: Drivers of FPL Energy Earnings Growth 2006-2007
Drivers of FPL Energy Earnings Growth 2006 20071 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 $1.3
Slide 22: Potential Drivers of 2006 Earnings Variability
FPL Potential Drivers of 2006 Earnings Variability Issue Variability Potential Impact 2006 Weather variability at 80 percent probability 7 cents Revenue growth 1 percent 2 3 cents O&M expenses sensitivity 2 percent 4 cents Interest rates 1 percent 2 cents See Company's Cautionary Statements containe
Slide 23: Non-qualifying Hedges Summary of Activity
Non qualifying Hedges 1 summary of Activity ($ millions, after tax) Asset (Liability) Balance as of 9 30 05 $ (117.6) Amounts Realized During 4th Quarter 0.4 Change in Forward Prices (all positions) 27.0 Subtotal 27.4 Asset (Liability) Balance as of 12 31 05 $(90.2) Primary Drivers NEPOOL Oil Spark
Slide 24: Non-Qualifying Hedges Quarterly Activity
Non Qualifying Hedges1 Summary of Activity ($ thousands, after tax) 1st Quarter 2005 Asset Deals Asset (Liability) Change in Executed Total (Liability) Balance Amounts Forward During Unrealized Balance Description 12 31 04 (2) Realized Prices Period (3) MTM 3 31 05 Gas Supply Contract $16,205 (1,611
Slide 25: Non-qualifying Hedges Summary of Forward Maturity
Non qualifying Hedges 1 summary of Forward Maturity $ thousands, after tax) Asset (Liability) Balance 2010 Total Description 12 31 05 2006 2007 2008 2009 2015 2005 2015 Gas Supply Contract $25,672 (14,839) (10,833) (25,672) Other net $(115,897) 60,427 20,978 10,270 2,254 21,968 115,897 Total $(90,22
Slide 26: 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 27: 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 28: Reconciliation of GAAP to Adjusted Earnings Three Months
Reconciliation of GAAP to adjusted Earnings Three Months Ended December 31, 2004 Florida Power Corporate (millions, except per share amounts) Light FPL Energy Other FPL Group, Inc. Net Income (Loss) $164 $ (11) $20 $173 Adjustments net of tax Net unrealized mark to market (gains) losses associated w
Slide 29: Reconciliation of GAAP to Adjusted Earnings Full Year 2004
Reconciliation of GAAP to Adjusted Earnings full Year Ended December 31, 2004 Florida Power Corporate (millions, except per share amounts) Light FPL Energy Other FPL Group, Inc. Net Income (Loss) $ 749 $172 $ (34) $887 Adjustments, net of tax Net unrealized mark to market (gains) losses associated w
Slide 30: Reconciliation Full Year 2005 and Cautionary Statements
Reconciliation of GAAP to adjusted Earnings full Year Ended December 31, 2005 Florida Power Corporate (millions, except per share amounts) Light FPL Energy Other FPL Group, Inc. Net Income (Loss) $748 $187 $(50) $885 Adjustments net of tax Net unrealized mark to market (gains) losses associated with
Slide 31: Cautionary Statements and Risk Factors (continued)
results, and could cause FPL Group's and FPL's actual results or outcomes to differ materially from those discussed in the forward- looking statements FPL Group and FPL are subject to changes in laws or regulations, including the Public Utility Regulatory Policies Act of 1978, as amended (PURPA), th
Slide 32: Cautionary Statements and Risk Factors (continued)
results. 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 vol
Slide 33: Conference Call Fourth Quarter 2005 Earnings Release
Conference Call Fourth Quarter 2005 Earnings Release January 27, 2006 (1) Fourth Quarter 2005 Earnings Conference Call Jim von Riesemann Good morning and welcome to our 2005 fourth quarter earnings conference call. Moray Dewhurst, Chief Financial Officer of FPL Group, will provide an overview of our
Slide 34: 2005: An Extraordinary Year (call transcript)
of factors that could cause actual results or events to vary is contained in the Appendix herein. These risks, as well as risks associated with the proposed merger between FPL Group and Constellation Energy, will be more fully discussed in the joint proxy statement and prospectus that will be includ
Slide 35: Fourth quarter financial results summary
Let me first summarize our financial results. In the fourth quarter of 2005, FPL Group's GAAP results were $206 million or 53 cents per share compared to $173 million or 47 cents per share during the 2004 fourth quarter. FPL Group's adjusted 2005 fourth quarter net income and EPS were $179 million a
Slide 36: Customer growth and retail sales at FPL
year, the hurricanes did not have a negative impact on customer growth and we are optimistic that the long- term effect will be moderate. For the full year, the average number of FPL customer accounts increased by 97,000, or 2.3% - consistent with the growth we have witnessed over the last three yea
Slide 37: FPL Depreciation
the continued upward trend in medical costs. A partial offset to the increased costs is the termination of the storm accrual as agreed to in the recent rate case settlement. (11) FPL Depreciation (Fourth Quarter and Full Year) Depreciation and amortization at FPL increased $14 million from $229 mill
Slide 38: Storm restoration costs
Let me now turn to the subject of storm restoration costs. As you know, we are presently recovering the bulk of the restoration costs associated with the 2004 season through a base rate surcharge, amounting to $1.65 per month for a 1,000 kWh usage customer. Unfortunately, the costs of the 2005 seaso
Slide 39: FPL Energy results and wind development
contributions, although these were diluted to some extent by a disappointing early performance from Gexa, our recently acquired retail electric provider in Texas. The rapidly increasing price levels in our major markets enabled us to add to our hedges for 2006 and 2007, thus significantly reducing t
Slide 40: FPL Energy portfolio restructuring activity
As I mentioned, comparisons of fourth quarter adjusted results for FPL Energy are significantly affected by portfolio restructuring activity both this year and last year. Late last year we restructured the steam contract associated with the Marcus Hook facility. This transaction, while positive from
Slide 41: 2005 Wind Resource Performance
hedging and asset optimization left us significant opportunity to capitalize on rapidly changing market conditions and generally rising prices, while effective risk management carried us successfully through an extremely challenging third quarter. (19) 2005 Wind Resource Performance One area of disa
Slide 42: Earnings Per Share Contributions
(23) Earnings Per Share Contributions (Fourth Quarter) To summarize the 2005 fourth quarter, on an adjusted basis, FPL contributed 32 cents, FPL Energy contributed 15 cents, and Corporate and Other was a negative 1 cent contribution. That is a total of 46 cents compared to 47 cents in the 2004 fourt
Slide 43: Outlook for 2006
(25) Outlook for 2006 Turning to 2006 and 2007, we discussed our initial views of EPS expectations for these years and the drivers behind them on our third quarter call. Since then, although commodity markets have remained volatile and, as I have described, the front end of the forward curve has ret