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Lew Hay

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Actual results may differ substantially from such forward ... Asia (especially the '-stans') Trading for trading's sake. Over leveraging the balance sheet ... – PowerPoint PPT presentation

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Title: Lew Hay


1
Lew Hay
  • Chairman
    Chief Executive Officer

2
Safe Harbor Statement Any statements made
herein about future operating results or other
future events are forward-looking statements
under the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995. Actual
results may differ substantially from such
forward-looking statements. A discussion of
factors that could cause actual results or events
to vary is contained in FPL Group's 2000 SEC Form
10-K/A.
2
3
FPL Energy
FPL
FPL FiberNet
FPL GROUP
Financial Discipline
Operational Excellence
Financial Strength
4
FPL Energy
FPL
FPL FiberNet
105 m 27
695 m 8
15 m 80
Net Income EPS growth
FPL GROUP
Financial Discipline
Operational Excellence
Financial Strength
Net Income and EPS figures are based on
2001, excluding non-recurring items and the
effects of FAS 133
5
FPL Energy
FPL
FPL FiberNet
FPL GROUP
Financial Discipline
Operational Excellence
Financial Strength
6
  • A solid, integrated electric company
  • Attractive growth opportunities in all three
    businesses

7
Financial Strength
  • Strong Balance Sheet
  • Strong credit ratings
  • A2 / A- FPL Group Capital
  • Aa3 / A Florida Power Light Company
  • Strong cash flow
  • 1.4 billion 2001 operating cash flow



8
Financial Strength
Consistent, Strong Earnings Per Share Growth
7.1 average annual EPS growth rate
Excluding nonrecurring items and effects of FAS
133.
9
Financial Strength High Earnings Quality
  • Regular depreciation 20 higher than average
  • More than 1 billion of special depreciation
    since 1995
  • reduced asset net book values Fossil 140 /
    kw Nuclear 357 / kw
  • reduced potential stranded costs

Book values as of 11/30/01
10
Financial Discipline Prudent Dividend Policy
  • Healthy 4.4 yield
  • 48 payout ratio allows for growth

Earnings per share Dividends per share
11
Financial Discipline
Recent Popular Industry Trends
  • South America
  • Europe
  • Asia (especially the -stans)
  • Trading for tradings sake
  • Over leveraging the balance sheet
  • Paying large premiums for older, inefficient
    plants

12
Financial Discipline Well-Hedged Position
  • Capacity contracted
  • FPL 100
  • FPL Energy 50 - 83
  • Total FPL Group 94 - 98
  • (weighted average)

Florida Power Light
FPL Energy
13
Operational Excellence
  • Tradition of quality and continuous improvement
  • Proven ability to transfer best practices

14
(No Transcript)
15
Premier Electric Utility
  • Favorable customer mix
  • Strong customer growth
  • Operational excellence
  • Proven cost management
  • Constructive regulatory environment
  • Attractive financial returns

16
Attractive Customer Demographics
Customer Mix
  • Consistently strong customer and usage growth
  • 2.1 5-year average annual growth
  • 1.1 5-year growth in usage per customer
  • High percentage of residential small commercial
    customers
  • 3.9 million customer accounts

4 3
Other
3
32 32 33
37 56
Industrial
Commercial
Residential
Industry Average
Florida Power Light
17
Operational Excellence Fossil Plant Availability
Industry Average
18
2001 WANO Performance Indicator Index (Ranking
of Sites with 2 or More Units)
Turkey Point 34
St. Lucie 12
19
Operational Excellence Service
Reliability (year 2001 total outage time per
customer minutes)
FPL 36 better than average
107
69
Industry Average
20
Operational Excellence in Cost Management (O M
per customer)
Industry Average
FPL 48 better than average
FPL
21
Constructive Regulatory Environment
  • Industry restructuring unlikely near term
  • Governor confirms no capacity crisis in Florida
  • FPSC members appointed by Governor
  • History of constructive regulatory relationship
  • Track record of reaching incentive-based,
    win-win" agreements
  • FPSC encouraging settlement during current rate
    review prefers incentive-based approach

22
Rate Proceeding Timeline 2001-2002
Rate Case Decision
MFR Filings Completed
Hearings
Discovery
Oct
Nov
Jun
May
Apr
Feb
Mar
Jan
Dec
Jul
Sep
Aug
Service Hearings
Rates Finalized
Staff Recommendation
Settlement Alternative
23
23
24
Positioned for Success in Wholesale Generation
  • Strong and diversified U.S. portfolio
  • Building critical mass in key regions
  • Primarily low-cost, base-load generation
  • U.S. leader in wind energy
  • Leverages operational excellence of Florida Power
    Light
  • Tightly integrated Business Management and Asset
    Optimization functions
  • Disciplined growth plan
  • Strong financial position

Target 20 - 30 average annual earnings growth
25
Track Record of Consistent, Strong Earnings Growth
Net Income 69 average annual growth rate
Excluding nonrecurring items and effects of
FAS 133.
26
Disciplined Growth at FPL Energy (projected
operating net-MWs)
Marcus Hook IDC Bellingham
Calhoun Forney
RISE Bastrop Blythe Bayswater
Doswell Woodward Mountain Stateline Montfort King
Mountain Gray County
Existing Projects 2000
98
99
00
01
02
97
03
04
27
Diversification Stability
(5,063 net MW in operation -- 12/31/01)
MW by Region
MW by Fuel Type
Mid-Atlantic
Gas
20
46
Northeast
28
Wind
28
Central
36
Other
Hydro
4
West
Oil
7
16
15
28
Operational Excellence at FPL Energy
  • Core operational capabilities shared with Florida
    Power Light
  • Power Generation
  • Construction Services
  • Transmission Planning
  • Environmental Services
  • Proven ability to improve performance of acquired
    assets
  • Transfer of Best Practices
  • Strong quality orientation

29
Wind Energy Capitalizing on our Strength
  • Nearly 1,500 net megawatts in operation
  • Wind is profitable
  • We have a leading position
  • We can build projects faster and cheaper
  • We can operate with higher availability
  • Expect continued growth of 500 - 1,000 MW per
    year pending PTC approval

30
Focused on Asset Optimization
  • Consistently grown our capability over past five
    years
  • Asset-based strategy
  • Reduces risk
  • Enhances returns
  • Enhances EBIT by 10

Asset Optimization Employee Headcount
31
Well-hedged Position
32
ERCOT Expected Prices (North)
33
ERCOT Spark Spreads (/kwh)
  • Current Forward Contract under
  • Spark Spread Spark Spread Contract
  • 2002 4.91 13.89 74
  • 2003 4.81 13.58 30

34
Enhancing Profitability in ERCOT
11.65-15.00
1.00
0.50-1.50
0.25
7.00-8.00
2.90-4.20
35
FPL FiberNet Enhances Earnings Growth
Provides metro and backbone fiber-optic network
capacity throughout Florida
  • Profitable earnings enhancer
  • Experienced provider with first-to-market
    advantage
  • Majority of capital costs recovered through PV of
    existing contracts
  • Limited capex going forward
  • 90 capacity of existing network available

36
Disciplined Growth
FPL Group MW in Operation
  • Solid growth plans
  • FPL customer and usage growth strong
  • FPL Energy targets 20 - 30 average annual growth
    (subject to PTC renewal)
  • Additional earnings growth potential at FPL
    FiberNet
  • FPL Group targets 7 average annual growth off
    2002 base.

29,224
FPL Energy
21,682
FPL
2001
2004
37
  • A solid, integrated electric company
  • Attractive growth opportunities in all three
    businesses
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